424B5 1 file1.htm

FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION FILE NO.: 333-129844

PROSPECTUS SUPPLEMENT
(to Prospectus dated November 13, 2006)


   

STRUCTURED ASSET SECURITIES CORPORATION II
Depositor

LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7
Issuing Entity

Commercial Mortgage Pass-Through Certificates, Series 2006-C7
Class A-1, Class A-2, Class A-AB, Class A-3, Class A-1A, Class A-M,
Class A-J, Class B, Class C, Class D, Class E, Class F and Class X-CP

Approximate Total Principal Balance at Initial Issuance: $2,846,028,000

We are Structured Asset Securities Corporation II, the depositor with respect to the securitization transaction that is the subject of this prospectus supplement. This prospectus supplement relates to, and is accompanied by, our base prospectus dated November 13, 2006. This prospectus supplement and the accompanying base prospectus are intended to offer and relate only to the classes of commercial mortgage pass-through certificates identified above, and not to the other classes of certificates that will be issued by the issuing entity, which is also identified above. The offered certificates are not listed on any national securities exchange or any automated quotation system of any registered securities associations, such as NASDAQ.

The sponsors of the subject securitization transaction are Lehman Brothers Holdings Inc., UBS Real Estate Investments Inc. and KeyBank National Association.

The offered certificates will represent interests only in the issuing entity and do not represent obligations of or interests in either sponsor, the depositor or any of their respective affiliates. The assets of the issuing entity will include a pool of multifamily and commercial mortgage loans having the characteristics described in this prospectus supplement. No governmental agency or instrumentality or private insurer has insured or guaranteed payment on the offered certificates or any of the mortgage loans that back them.

The holders of each class of offered certificates will be entitled to receive, to the extent of available funds, monthly distributions of interest, principal or both, commencing on the distribution date in December 2006. The table on page S-7 of this prospectus supplement contains a list of the respective classes of offered certificates and states the original principal balance or notional amount, initial interest rate, interest rate description, and other select characteristics of each of those classes. Credit enhancement is being provided through the subordination of various other classes, including multiple non-offered classes, of the series 2006-C7 certificates. That same table on page S-7 of this prospectus supplement also contains a list of the non-offered classes of the series 2006-C7 certificates.

You should fully consider the risk factors beginning on page S-45 in this prospectus supplement and on page 18 in the accompanying base prospectus prior to investing in the offered certificates.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying base prospectus. Any representation to the contrary is a criminal offense.

Lehman Brothers Inc., KeyBanc Capital Markets, a division of McDonald Investments Inc., and Citigroup Global Markets Inc. are underwriters with respect to the offered certificates. UBS Global Asset Management (US) Inc. is an underwriter with respect to the offered certificates other than the class A-3 certificates. They will purchase their respective allocations, in each case if any, of the offered certificates from us, subject to the satisfaction of specified conditions. Our proceeds from the sale of the offered certificates will equal approximately $2,890,297,000, plus accrued interest on all the offered certificates from November 11, 2006, before deducting expenses payable by us. The underwriters currently intend to sell the offered certificates at varying prices to be determined at the time of sale. Not every underwriter will have an obligation to purchase offered certificates from us. See ‘‘Method of Distribution’’ in this prospectus supplement.

With respect to this offering, Lehman Brothers Inc. is acting as co-lead manager and sole bookrunner, UBS Global Asset Management (US) Inc. is acting as co-lead manager, and KeyBanc Capital Markets, a division of McDonald Investments Inc., and Citigroup Global Markets Inc. are acting as co-managers.


LEHMAN BROTHERS UBS GLOBAL ASSET MANAGEMENT
Co-Lead Manager Co-Lead Manager
KEYBANC CAPITAL MARKETS CITIGROUP
Co-Manager         Co-Manager

The date of this prospectus supplement is November 21, 2006



TABLE OF CONTENTS

    


  Page
IMPORTANT NOTICE ABOUT THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING BASE PROSPECTUS S-5
NOTICE TO RESIDENTS OF KOREA S-5
NOTICE TO RESIDENTS OF GERMANY S-5
NOTICE TO NON-U.S. INVESTORS S-6
EUROPEAN ECONOMIC AREA S-6
SUMMARY OF PROSPECTUS SUPPLEMENT S-7
Introduction to the Transaction S-7
Series 2006-C7 Commercial Mortgage Pass-Through Certificates S-7
Relevant Parties S-12
Summary of Transaction Parties S-16
Relevant Dates and Periods S-17
Description of the Offered Certificates S-19
The Underlying Mortgage Loans and the Mortgaged Real Properties S-29
Legal and Investment Considerations S-42
RISK FACTORS S-45
The Class A-M, A-J, B, C, D, E and F Certificates Are Subordinate to, and Are Therefore Riskier than, the Class A-1, A-2, A-AB, A-3 and A-1A Certificates S-45
The Offered Certificates Have Uncertain Yields to Maturity S-45
The Investment Performance of Your Offered Certificates May Vary Materially and Adversely from Your Expectations Because the Rate of Prepayments and Other Unscheduled Collections of Principal on the Underlying Mortgage Loans Is Faster or Slower than You Anticipated S-46
The Interests of the Series 2006-C7 Controlling Class Certificateholders May Be in Conflict with the Interests of the Offered Certificateholders S-47
The Absence or Inadequacy of Insurance Coverage on the Mortgaged Properties May Adversely Affect Payments on Your Certificates S-47
Repayment of the Underlying Mortgage Loans Depends on the Operation of the Mortgaged Real Properties S-48
Risks Associated with Condominium Ownership S-49
The Mortgaged Real Property Will Be the Sole Asset Available to Satisfy the Amounts Owing Under an Underlying Mortgage Loan in the Event of Default S-49
In Some Cases, Payments on an Underlying Mortgage Loan Are Dependent on a Single Tenant or on One or a Few Major Tenants at the Related Mortgaged Real Property S-49
Five Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on the Respective Borrower’s Interests in Each of the Following Property Types — Office, Retail, Multifamily and Healthcare S-50
Conflicting Rights of Tenants May Adversely Affect a Mortgaged Real Property S-50
Ten Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on Real Properties Located in New York and Five Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on Real Properties Located in Each of Georgia, Texas, Virginia, Florida and California S-51
Of the 40 Mortgaged Real Properties Located in the State of New York, Two (2) of Those Properties, Representing 24.8% Percent of the Initial Mortgage Pool Balance, Will Be Secured by Mortgage Liens on Real Properties Located in the City of New York; The Performance of Those Properties Will be Materially Dependent on the Strength of the Manhattan Economy and Office Leasing Market S-51
The Mortgage Pool Will Include Material Concentrations of Balloon Loans and Loans with Anticipated Repayment Dates S-51
The Mortgage Pool Will Include Some Disproportionately Large Mortgage Loans S-52
The Mortgage Pool Will Include Leasehold Mortgage Loans and Lending on a Leasehold Interest in Real Property is Riskier Than Lending on the Fee Interest in That Property S-52
Many of the Mortgaged Real Properties Are Legal Nonconforming Uses or Legal Nonconforming Structures S-52
Some of the Mortgaged Real Properties May Not Comply with All Applicable Zoning Laws and/or Local Building Codes or with the Americans with Disabilities Act of 1990 S-53
Multiple Mortgaged Real Properties Are Owned by the Same Borrower, Affiliated Borrowers or Borrowers with Related Principals or Are Occupied, in Whole or in Part, by the Same Tenant or Affiliated Tenants, Which Presents a Greater Risk to the Trust Fund in the Event of the Bankruptcy or Insolvency of Any Such Borrower or Tenant S-53
Some of the Mortgaged Real Properties Are or May Be Encumbered by Additional Debt and the Ownership Interests in Some Borrowers Have Been or May Be Pledged to Secure Debt Which, in Either Case, May Reduce the Cash Flow Available to the Subject Mortgaged Real Property S-54
Certain Borrower Covenants May Affect That Borrower’s Available Cash Flow S-55
Some Borrowers Under the Underlying Mortgage Loans Will Not Be Special Purpose Entities S-55
Tenancies in Common May Hinder Recovery S-55
Operating or Master Leases May Hinder Recovery S-56
Changes in Mortgage Pool Composition Can Change the Nature of Your Investment S-56
Lending on Income-Producing Real Properties Entails Environmental Risks S-56
Lending on Income-Producing Properties Entails Risks Related to Property Condition S-60
There May be Restrictions on the Ability of a Borrower, a Lender or Any Transferee Thereof to Terminate or Renegotiate Property Management Agreements That are in Existence With Respect to Some of the Mortgaged Real Properties S-60
With Respect to Six (6) Mortgage Loans (Including Three (3) of the Four (4) Largest Mortgage Loans) That We Intend to Include in the Trust, the Mortgaged Real Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One (1) or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests; The Series 2006-C7 Certificateholders May Have a Limited Ability to Control the Servicing of the Subject Loan Combinations S-60
The Triangle Town Center Subordinate Tranche Underlying Mortgage Loan Is Part of a Loan Combination Comprised of Three (3) Mortgage Loans in Which the Subject Underlying Mortgage Loan Is Generally Subordinate to Both of the Corresponding Senior Non-Trust Loans For Purposes of Allocating Payments of Both Principal and Interest Between Them S-61
Conflicts of Interest May Exist in Connection with Certain Previous or Existing Relationships of a Mortgage Loan Seller or an Affiliate Thereof to Certain of the Underlying Mortgage Loans, Related Borrowers or Related Mortgaged Real Properties S-62
Limitations on Enforceability of Cross-Collateralization May Reduce Its Benefits S-62
Investors May Want to Consider Prior Bankruptcies S-63
Litigation May Adversely Affect Property Performance S-63
Risks Related to the Extendicare Portfolio Mortgage Loan S-63
CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT S-65
FORWARD-LOOKING STATEMENTS S-65

S-3




  Page
DESCRIPTION OF THE MORTGAGE POOL S-66
General S-66
Cross-Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans With Affiliated Borrowers S-67
Partial Releases S-68
Property Substitutions S-68
Terms and Conditions of the Underlying Mortgage Loans S-69
Mortgage Pool Characteristics S-75
Significant Underlying Mortgage Loans S-75
Loan Combinations S-129
Additional Loan and Property Information S-140
Assessments of Property Condition S-148
Assignment of the Underlying Mortgage Loans S-150
Representations and Warranties S-152
Cures and Repurchases S-156
Changes in Mortgage Pool Characteristics S-158
TRANSACTION PARTICIPANTS S-159
The Issuing Entity S-159
The Depositor S-159
The Sponsors S-159
Mortgage Loan Sellers S-165
The Servicers S-165
The Trustee S-172
AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS S-173
THE SERIES 2006-C7 POOLING AND SERVICING AGREEMENT S-175
General S-175
Overview of Servicing S-175
Sub-Servicers S-177
Servicing Compensation and Payment of Expenses S-178
Trustee Compensation S-182
Advances S-182
The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders S-186
Triangle Town Center Loan Combination Purchase Option and Cure Rights S-191
Replacement of the Special Servicer S-191
Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions S-192
Modifications, Waivers, Amendments and Consents S-193
Defense of Litigation S-196
Required Appraisals S-197
Maintenance of Insurance S-198
Fair Value Option S-199
Realization Upon Defaulted Mortgage Loans S-201
REO Properties S-202
Inspections; Collection of Operating Information S-204
Evidence as to Compliance S-205
Accounts S-205
Events of Default S-213
Rights Upon Event of Default S-214
Administration of the Outside Serviced Trust Mortgage Loans S-216
SERVICING OF THE 1211 AVENUE OF THE AMERICAS LOAN COMBINATION AND THE TRIANGLE TOWN CENTER LOAN COMBINATION S-216
DESCRIPTION OF THE OFFERED CERTIFICATES S-219
General S-219
Registration and Denominations S-221
Payments S-221
Treatment of REO Properties S-232
Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses S-232
Fees and Expenses S-235
Reports to Certificateholders; Available Information S-250
Voting Rights S-253
Termination S-253
YIELD AND MATURITY CONSIDERATIONS S-255
Yield Considerations S-255
Yield Sensitivity S-258
Weighted Average Lives S-259
USE OF PROCEEDS S-260
FEDERAL INCOME TAX CONSEQUENCES S-260
General S-260
Discount and Premium; Prepayment Consideration S-261
Characterization of Investments in Offered Certificates S-262
Constructive Sales of Class X-CP Certificates S-263
Prohibited Transactions Tax and Other Taxes S-263
ERISA CONSIDERATIONS S-263
LEGAL INVESTMENT S-266
METHOD OF DISTRIBUTION S-266
LEGAL MATTERS S-268
RATINGS S-269
GLOSSARY S-270
ANNEX A-1 — CERTAIN CHARACTERISTICS OF INDIVIDUAL UNDERLYING MORTGAGE LOANS A-1
ANNEX A-2 — CERTAIN CHARACTERISTICS OF THE MORTGAGE POOL A-2
ANNEX A-3 — CERTAIN CHARACTERISTICS OF LOAN GROUP 1 A-3
ANNEX A-4 — CERTAIN CHARACTERISTICS OF LOAN GROUP 2 A-4
ANNEX A-5 — CERTAIN MONETARY TERMS OF THE UNDERLYING MORTGAGE LOANS A-5
ANNEX A-6 — CERTAIN INFORMATION REGARDING RESERVES A-6
ANNEX B — CERTAIN INFORMATION REGARDING MULTIFAMILY PROPERTIES B
ANNEX C-1 — PRICE/YIELD TABLES C-1
ANNEX C-2 — DECREMENT TABLES C-2
ANNEX D — FORM OF DISTRIBUTION DATE STATEMENT D
ANNEX E — REFERENCE RATE SCHEDULE E
ANNEX F — CLASS A-AB PLANNED PRINCIPAL BALANCE SCHEDULE F
ANNEX G — GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES G

S-4



IMPORTANT NOTICE ABOUT THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING BASE PROSPECTUS

Information about the offered certificates is contained in two separate documents:

•  this prospectus supplement, which describes specific terms of the offered certificates; and
•  the accompanying base prospectus, which provides general information, some of which may not apply to the offered certificates.

You should read both this prospectus supplement and the accompanying base prospectus in full to obtain material information concerning the offered certificates.

The Annexes attached to this prospectus supplement are hereby incorporated into and made a part of this prospectus supplement.

This prospectus supplement and the accompanying base prospectus do not constitute an offer to sell or a solicitation of an offer to buy any security other than the offered certificates, nor do they constitute an offer to sell or a solicitation of an offer to buy any of the offered certificates to any person in any jurisdiction in which it is unlawful to make such an offer or solicitation to such person.

In this prospectus supplement, the terms ‘‘depositor,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to Structured Asset Securities Corporation II.

NOTICE TO RESIDENTS OF KOREA

The securities to which these materials relate (the ‘‘Subject Securities’’) have not been and will not be registered under the Securities and Exchange Act of Korea and none of the Subject Securities may be offered or sold, directly or indirectly, in Korea or to any resident of Korea or to any persons for the reoffering or resale, directly or indirectly, in Korea or to any resident of Korea, except pursuant to applicable laws and regulations of Korea. None of Lehman Brothers Inc., UBS Global Asset Management (US) Inc., KeyBanc Capital Markets, a division of McDonald Investments Inc., Citigroup Global Markets Inc. or any of their respective affiliates makes any representation with respect to the eligibility of any recipients of these materials or of the Subject Securities to acquire the Subject Securities under the laws of Korea, including, without limitation, the Foreign Exchange Transaction Regulations of Korea. In addition, any recipient or purchaser of the Subject Securities represents that it is purchasing or acquiring the Subject Securities as principal for its own account. For a period of one year from the issue date of the Subject Securities, neither the holder of the Subject Securities nor any resident of Korea may transfer the Subject Securities in Korea or to any resident of Korea unless such transfer involves all of the Subject Securities held by it. Also, for a period of one year from the issue date of the Subject Securities, the face amount of each certificate representing the Subject Securities held by a resident of Korea shall not be subdivided into more than one such certificate representing the Subject Securities. Furthermore, the purchaser of the Subject Securities shall comply with all applicable regulatory requirements (including but not limited to requirements under the Foreign Exchange Transaction laws) in connection with the purchase of the Subject Securities. For the avoidance of doubt, it is the sole responsibility of the recipient or purchaser of the Subject Securities to determine whether such recipient or purchaser is eligible for the acquisition of the Subject Securities under applicable laws and regulations of Korea, and whether such recipient or purchaser will have complied with all applicable Korean legal and regulatory requirements in connection with the purchase of the Subject Securities.

NOTICE TO RESIDENTS OF GERMANY

Each of the underwriters has confirmed that it is aware that no German sales prospectus (Verkaufsprospekt) has been or will be published in respect of the offering of the series 2006-C7 certificates and each of the underwriters has represented and agreed that it will comply with the German Securities Sales Prospectus Act (Wertpapier—Verkaufsprospektgesetz) or any other laws applicable in Germany governing the issue, offering and sale of the series 2006-C7 certificates. In particular, each underwriter has undertaken not to engage in a public offering (Öffentliches Angebot) in Germany with respect to any of the series 2006-C7 certificates otherwise than in accordance with the German Securities Sales Prospectus Act and any other act replacing or supplementing it and all other applicable laws and regulations.

Any series 2006-C7 certificates purchased by any person which it wishes to offer for sale or resale may not be offered in any jurisdiction in circumstances which would result in the depositor being obliged to register any further prospectus or corresponding document relating to the series 2006-C7 certificates in such jurisdiction.

S-5



NOTICE TO NON-U.S. INVESTORS

The distribution of this prospectus supplement and the accompanying base prospectus and the offer or sale of the offered certificates may be restricted by law in certain jurisdictions outside the United States. Persons into whose possession this prospectus supplement and the accompanying base prospectus or any of the offered certificates come must inform themselves about, and observe, any such restrictions. Each prospective purchaser of the offered certificates must comply with all applicable laws and regulations in force in any jurisdiction in which it purchases, offers or sells the offered certificates or possesses or distributes this prospectus supplement and the accompanying base prospectus and must obtain any consent, approval or permission required by it for the purchase, offer or sale by it of the offered certificates under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers or sales, and neither we nor any of the underwriters have any responsibility therefor.

EUROPEAN ECONOMIC AREA

Each underwriter has agreed with us that it will abide by certain selling restrictions with respect to offers of series 2006-C7 certificates to the public in the European Economic Area. See ‘‘Method of Distribution’’ in this prospectus supplement.

S-6



SUMMARY OF PROSPECTUS SUPPLEMENT

This summary contains selected information regarding the offering being made by this prospectus supplement. It does not contain all of the information you need to consider in making your investment decision. To understand all of the terms of the offering of the offered certificates, you should read carefully this prospectus supplement and the accompanying base prospectus in full.

Introduction to the Transaction

The offered certificates will be part of a series of commercial mortgage pass-through certificates designated as the Series 2006-C7 Commercial Mortgage Pass-Through Certificates and consisting of multiple classes. The table below identifies the respective classes of that series, specifies various characteristics of each of those classes and indicates which of those classes are offered by this prospectus supplement and which are not offered by this prospectus supplement.

Series 2006-C7 Commercial Mortgage Pass-Through Certificates


Class Approx. Total
Principal
Balance
or Notional
Amount at
Initial Issuance		 Approx. % of
Initial
Mortgage Pool
Balance(3)		 Approx. %
Total Credit
Support at
Initial
Issuance(4)		 Pass-Through
Rate
Description		 Initial
Pass-Through
Rate		 Weighted
Average
Life
(Years)		 Principal
Window		 Ratings
S&P/
Fitch
Offered Certificates
A-1 $ 40,000,000
1.3
%
 30.000
%(5)
 Fixed 5.27900
%
 3.19
12/06-08/11 AAA/AAA
A-2 $ 624,000,000
20.7
%
 30.000
%(5)
 Fixed 5.30000
%
 4.89
08/11-11/11 AAA/AAA
A-AB $ 54,000,000
1.8
%
 30.000
%(5)
 Fixed 5.31700
%
 7.12
11/11-12/15 AAA/AAA
A-3 $ 968,137,000
32.1
%
 30.000
%(5)
 Fixed 5.34700
%
 9.77
12/15-10/16 AAA/AAA
A-1A $ 427,623,000
14.2
%
 30.000
%(5)
 Fixed 5.33500
%
 8.39
12/06-10/16 AAA/AAA
A-M $ 301,966,000
10.0
%
 20.000
%
 Fixed 5.37800
%
 9.86
10/16-10/16 AAA/AAA
A-J $ 294,417,000
9.8
%
 10.250
%
 Fixed 5.40700
%
 9.89
10/16-11/16 AAA/AAA
B $ 22,647,000
0.7
%
 9.500
%
 Fixed 5.44700
%
 9.94
11/16-11/16 AA+/AA+
C $ 30,197,000
1.0
%
 8.500
%
 Fixed 5.47700
%
 9.94
11/16-11/16 AA/AA
D $ 30,197,000
1.0
%
 7.500
%
 Fixed(6) 5.49600
%
 9.94
11/16-11/16 AA−/AA−
E $ 26,422,000
0.9
%
 6.625
%
 Fixed(6) 5.51600
%
 9.94
11/16-11/16 A+/A+
F $ 26,422,000
0.9
%
 5.750
%
 Fixed(6) 5.54600
%
 9.94
11/16-11/16 A/A
X-CP $ 856,119,600
(2)
            N/A N/A
Variable IO(7) 0.69166
%(9)
 N/A N/A AAA/AAA
Non-Offered Certificates(1)
X-CL $ 905,897,562
(2)
            N/A N/A
Variable IO(7) 0.06496
%(9)
 N/A N/A N/A
X-W $ 2,113,760,977
(2)
            N/A N/A
Variable IO(7) 0.71862
%(9)
 N/A N/A N/A
G $ 26,422,000
0.9
%
 N/A
Fixed(6) 5.62400
%
 N/A N/A N/A
H $ 30,196,000
1.0
%
 N/A
WAC − 0.39%(8) 5.68886
%(9)
 N/A N/A N/A
J $ 26,422,000
0.9
%
 N/A
WAC − 0.26%(8) 5.81886
%(9)
 N/A N/A N/A
K $ 26,422,000
0.9
%
 N/A
WAC − 0.07%(8) 6.00886
%(9)
 N/A N/A N/A
L $ 7,549,000
0.2
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
M $ 3,775,000
0.1
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
N $ 11,324,000
0.4
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
P $ 3,774,000
0.1
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
Q $ 3,775,000
0.1
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
S $ 3,774,000
0.1
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
T $ 30,197,539
1.0
%
 N/A
Fixed 5.09400
%
 N/A N/A N/A
(1) Not offered by this prospectus supplement. The non-offered classes of the series 2006-C7 certificates also include the R-I, R-II, R-III and V classes, which do not have principal balances, notional amounts or pass-through rates.
(2) Notional amount.

S-7



(3) The initial mortgage pool balance will be approximately $3,019,658,540. References in this prospectus supplement to the initial mortgage pool balance are to the aggregate principal balance of the underlying mortgage loans as of November 13, 2006, after application of all scheduled payments of principal due with respect to the underlying mortgage loans on or before that date, whether or not received.
(4) Structural credit enhancement is provided for the more senior classes of offered certificates through the subordination of more junior classes of offered and non-offered certificates, as described under ‘‘—Introduction to the Transaction —Total Credit Support at Initial Issuance’’ below in this prospectus supplement.
(5) Presented on an aggregate basis for the class A-1, A-2, A-AB, A-3 and A-1A certificates.
(6) In general, the pass-through rates for the class D, E, F and G certificates will, in the case of each of those classes, be fixed at the rate per annum specified in the table above as the initial pass-through rate for the subject class. However, with respect to any interest accrual period, if the weighted average of certain net interest rates on the underlying mortgage loans is below the identified initial pass-through rate for the class D, E, F or G certificates, as the case may be, then the pass-through rate for the subject class of series 2006-C7 certificates during that interest accrual period will be that weighted average net interest rate. The net interest rates referred to in this bullet will be converted, in some months, to a 30/360 equivalent annual rate for those underlying mortgage loans that accrue interest on an actual/360 basis. See ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.
(7) The pass-through rates for the class X-CL, X-CP and X-W certificates will, in the case of each of those classes, for any interest accrual period, equal the weighted average of the respective strip rates (which may be different for each such class) at which interest then accrues on the respective components of the total notional amount of the subject class of series 2006-C7 certificates outstanding immediately prior to the related distribution date, except that the class X-CP certificates will cease to accrue interest following the interest accrual period that ends in November 2013. See ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.
(8) The pass-through rates for the class H, J and K certificates will, in the case of each of those classes, for any interest accrual period, be a rate per annum equal to: (a) the weighted average for that interest accrual period of certain net interest rates on the underlying mortgage loans, which net interest rates will be converted, in some months, to a 30/360 equivalent annual rate for those underlying mortgage loans that accrue interest on an actual/360 basis; minus (b) 0.39% in the case of the class H certificates, 0.26% in the case of the class J certificates and 0.07% in the case of the class K certificates. See ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.
(9) Approximate.

The governing document for purposes of forming the issuing entity and issuing the series 2006-C7 certificates will be a pooling and servicing agreement to be dated as of November 13, 2006. Except as described below in this paragraph, the pooling and servicing agreement will also govern the servicing and administration of the mortgage loans and other assets that back the series 2006-C7 certificates. The underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as the 1211 Avenue of the Americas, which represents 9.1% of the initial mortgage pool balance, and the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Triangle Town Center Subordinate Tranche, which represents 1.0% of the initial mortgage pool balance, are not being serviced under the series 2006-C7 pooling and servicing agreement. The 1211 Avenue of the Americas underlying mortgage loan is part of a loan combination that also includes one (1) other mortgage loan that will not be transferred to the issuing entity and will be serviced pursuant to the servicing arrangements for the securitization of that other 1211 Avenue of the Americas mortgage loan. The Triangle Town Center Subordinate Tranche underlying mortgage loan is part of a loan combination that also includes two (2) other mortgage loans that will not be transferred to the issuing entity and will be serviced pursuant to the servicing arrangements for the securitization of one of those two other Triangle Town Center mortgage loans. The 1211 Avenue of the Americas underlying mortgage loan and the Triangle Town Center Subordinate Tranche underlying mortgage loan are sometimes referred to in this prospectus supplement as the outside serviced underlying mortgage loans.

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The parties to the series 2006-C7 pooling and servicing agreement will include us, a trustee, a master servicer and a special servicer. A copy of the series 2006-C7 pooling and servicing agreement, including the exhibits thereto, will be filed with the SEC as an exhibit to a current report on Form 8-K under the Securities Exchange Act of 1934, as amended, following the initial issuance of the offered certificates. In addition, if and to the extent that any material terms of the series 2006-C7 pooling and servicing agreement or the exhibits thereto have not been disclosed in this prospectus supplement, then the series 2006-C7 pooling and servicing agreement, together with such exhibits, will be filed with the SEC as an exhibit to a current report on Form 8-K on the date of initial issuance of the offered certificates. The SEC will make those current reports on Form 8-K and its exhibits available to the public for inspection. See ‘‘Available Information’’ in the accompanying base prospectus.

A.    Total Principal Balance or Notional
        Amount at Initial Issuance		 The class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates will be the series 2006-C7 certificates with principal balances and are sometimes referred to as the series 2006-C7 principal balance certificates.
The table on page S-7 of this prospectus supplement identifies for each class of series 2006-C7 principal balance certificates the approximate total principal balance of that class at initial issuance. The actual total principal balance of any class of series 2006-C7 principal balance certificates at initial issuance may be larger or smaller than the amount shown in the table on page S-7 of this prospectus supplement, depending on, among other things, the actual size of the initial mortgage pool balance. The actual size of the initial mortgage pool balance may be as much as 5% larger or smaller than the amount presented in this prospectus supplement.
The class X-CL, X-CP and X-W certificates will not have principal balances and are sometimes referred to as the series 2006-C7 interest-only certificates. For purposes of calculating the amount of accrued interest, each of those classes of series 2006-C7 interest-only certificates will have a total notional amount.
The total notional amount of the class X-CL certificates will equal 30% of the total principal balance of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates outstanding from time to time. The approximate total notional amount of the class X-CL certificates at initial issuance is shown in the table on page S-7 of this prospectus supplement, although it may be as much as 5% larger or smaller.
The total notional amount of the class X-CP certificates will: (a) be calculated in accordance with the formula described under ‘‘Description of the Offered Certificates—General’’ in this prospectus supplement; (b) initially equal 30% of the sum of (i) the lesser of $418,709,000 and the total principal balance of the class A-1A certificates, and (ii) the total principal balance of the class A-2, A-AB, A-3, A-M, A-J, B, C, D, E, F, G and H certificates; (c) decline over time; and (d) equal $0 following the distribution date in November 2013. The approximate total notional amount of the class X-CP certificates at initial issuance is shown in the table on page S-7 of this prospectus supplement, although it may be as much as 10% larger or smaller.
The total notional amount of the class X-W certificates will equal 70% of the total principal balance of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates outstanding from time to time. The approximate total notional amount of the class X-W certificates at initial issuance is shown in the table on page S-7 of this prospectus supplement,

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although it may be as much as 5% larger or smaller.
The class R-I, R-II and R-III certificates will not have principal balances or notional amounts. The holders of the class R-I, R-II and R-III certificates are not expected to receive any material payments.
The class V certificates will not have principal balances or notional amounts. They will entitle holders to certain additional interest that may accrue with respect to each underlying mortgage loan that has an anticipated repayment date. See ‘‘—The Underlying Mortgage Loans and the Mortgaged Real Properties—Payment and Other Terms’’ below.
B.    Total Credit Support at Initial
        Issuance		 The respective classes of the series 2006-C7 certificates, other than the class R-I, R-II, R-III and V certificates, will entitle their holders to varying degrees of seniority for purposes of—
• receiving payments of interest and, if and when applicable, payments of principal, and
• bearing the effects of losses on the underlying mortgage loans or on particular underlying mortgage loans, as well as default-related and other unanticipated expenses of the trust.
In that regard:
• the class A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and X-W certificates will be the most senior of the series 2006-C7 certificates;
• after the classes referred to in the prior bullet, the class A-M certificates will be the next most senior class of the series 2006-C7 certificates;
• after the classes referred to in the prior two bullets, the class A-J certificates will be the next most senior class of the series 2006-C7 certificates; and
• the class B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates will, in the case of each such class, be senior to each other such class, if any, with a later alphabetic class designation.
The table on page S-7 of this prospectus supplement shows the approximate total credit support provided to each class of the offered certificates, other than the class X-CP certificates, through the subordination of other classes of the series 2006-C7 principal balance certificates. In the case of each class of the offered certificates, exclusive of the class X-CP certificates, the credit support shown in the table on page S-7 of this prospectus supplement represents the total initial principal balance, expressed as a percentage of the initial mortgage pool balance, of all classes of the series 2006-C7 principal balance certificates that are subordinate to the indicated class.
The class R-I, R-II and R-III certificates will be residual interest certificates and will not provide any credit support to the other series 2006-C7 certificates. The class V certificates will be neither senior nor subordinate to any other series 2006-C7 certificates, but rather entitle holders to collections of additional interest on each underlying mortgage loan that has an anticipated repayment date. See ‘‘—The Underlying Mortgage Loans and the Mortgaged Real Properties—Payment and Other Terms’’ below.

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C.    Pass-Through Rate Each class of the series 2006-C7 certificates, other than the class R-I, R-II, R-III and V certificates, will bear interest. The table on page S-7 of this prospectus supplement provides the initial pass-through rate and a pass-through rate description for each interest-bearing class of the series 2006-C7 certificates, although as and when indicated the initial pass-through rate shown is approximate. Additionally, a more detailed description of the pass-through rate and/or how it will be calculated with respect to each interest-bearing class of the series 2006-C7 certificates is set forth under ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.
D.    Weighted Average Life and
        Principal Window		 The weighted average life of any class of series 2006-C7 principal balance certificates refers to the average amount of time that will elapse from the date of their issuance until each dollar to be applied in reduction of the total principal balance of those certificates is paid to the investors. The principal window for any class of series 2006-C7 principal balance certificates is the period during which the holders of those certificates will receive payments of principal. The weighted average life and principal window shown in the table on page S-7 of this prospectus supplement for each class of offered certificates, exclusive of the class X-CP certificates, were calculated based on the following assumptions with respect to each underlying mortgage loan—
• the related borrower timely makes all payments on the mortgage loan,
• if the mortgage loan has an anticipated repayment date (see ‘‘—The Underlying Mortgage Loans and the Mortgaged Real Properties—Payment and Other Terms’’ below), the mortgage loan will be paid in full on that date, and
• the mortgage loan will not otherwise be prepaid prior to stated maturity.
The weighted average life and principal window shown in the table on page S-7 of this prospectus supplement for each class of offered certificates, exclusive of the class X-CP certificates, were further calculated based on the other modeling assumptions referred to under ‘‘Yield and Maturity Considerations’’ in, and set forth in the glossary to, this prospectus supplement.
E.    Ratings The ratings shown in the table on page S-7 of this prospectus supplement for the offered certificates are those of Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and Fitch, Inc., respectively. It is a condition to their issuance that the respective classes of the offered certificates receive credit ratings no lower than those shown in the table on page S-7 of this prospectus supplement.
The ratings assigned to the respective classes of offered certificates will represent the likelihood of—
• timely receipt by the holders of all interest to which they are entitled on each distribution date, and
• except in the case of the class X-CP certificates, the ultimate receipt by the holders of all principal to which they are entitled by the applicable rated final distribution date described under ‘‘—Relevant Dates and Periods—Rated Final Distribution Date’’ below.
A security rating is not a recommendation to buy, sell or hold securities and the assigning rating agency may revise or withdraw its rating at any time.

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Further, the ratings on the respective classes of offered certificates do not represent any assessment of: the tax attributes of the offered certificates; the likelihood, frequency or extent of receipt of principal prepayments; the extent to which interest payable on any class of offered certificates may be reduced in connection with prepayment interest shortfalls; the extent of receipt of prepayment premiums, yield maintenance charges, default interest or post-anticipated repayment date additional interest; or the investors’ anticipated yield to maturity.
See ‘‘Ratings’’ in this prospectus supplement.

Relevant Parties

Issuing Entity LB-UBS Commercial Mortgage Trust, Series 2006-C7 will be the issuing entity for the series 2006-C7 securitization transaction. The issuing entity is sometimes referred to in this prospectus supplement and in the accompanying base prospectus as the ‘‘trust’’ or the ‘‘trust fund.’’ See ‘‘Transaction Participants—The Issuing Entity’’ in this prospectus supplement.
Depositor We are Structured Asset Securities Corporation II, the depositor for the series 2006-C7 securitization transaction. We are a special purpose Delaware corporation. Our address is 745 Seventh Avenue, New York, New York 10019, and our telephone number is (212) 526-7000. See ‘‘Transaction Participants—The Depositor’’ in the accompanying base prospectus and ‘‘Transaction Participants —The Depositor’’ in this prospectus supplement.
Sponsors Lehman Brothers Holdings Inc., UBS Real Estate Investments Inc. and KeyBank National Association will be the sponsors of the series 2006-C7 securitization transaction. Lehman Brothers Holdings Inc. is our affiliate and an affiliate of Lehman Brothers Inc., one of the underwriters. UBS Real Estate Investments Inc. is an affiliate of UBS Global Asset Management (US) Inc., one of the underwriters, and KeyBank National Association is the parent of KeyCorp Real Estate Capital Markets, Inc., a primary servicer, and is an affiliate of McDonald Investments Inc., one of the underwriters. See ‘‘Transaction Participants—The Sponsor’’ in the accompanying base prospectus and ‘‘Transaction Participants—The Sponsors’’ in this prospectus supplement.
Mortgage Loan Sellers Each of the sponsors will be, and an affiliate of Lehman Brothers Holdings Inc. may be, a mortgage loan seller for the series 2006-C7 securitization transaction.
Initial Trustee LaSalle Bank National Association, a national banking association, will act as the initial trustee on behalf of the series 2006-C7 certificateholders. See ‘‘Transaction Participants—The Trustee’’ in this prospectus supplement. The trustee will also have, or be responsible for appointing an agent to perform, additional duties with respect to tax administration. Following the transfer of the underlying mortgage loans to the issuing entity, the trustee, on behalf of the series 2006-C7 certificateholders, will become the mortgagee of record under each underlying mortgage loan, subject to the discussion under ‘‘—1211 Avenue of the Americas Mortgagee of Record, Master Servicer and Special Servicer’’ and ‘‘—Triangle Town Center Mortgagee of Record, Master Servicer and Special Servicer’’ below. The trustee will further be responsible for calculating the amount of principal and interest to be paid to, and making distributions to, the Series 2006-C7 certificateholders as described under ‘‘Transaction Participants—

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The Trustee’’ and ‘‘Description of the Offered Certificates’’ in this prospectus supplement.
Initial Master Servicer Wachovia Bank, National Association, a national banking association, will act as the initial master servicer with respect to the underlying mortgage loans, subject to the discussion under ‘‘—1211 Avenue of the Americas Mortgagee of Record, Master Servicer and Special Servicer’’ and ‘‘—Triangle Town Center Mortgagee of Record, Master Servicer and Special Servicer’’ below. See ‘‘Transaction Participants—The Servicers—The Initial Master Servicer’’ in this prospectus supplement.
Primary Servicer KeyCorp Real Estate Capital Markets, Inc., an Ohio corporation, is expected to act as a sub-servicer with respect to certain underlying mortgage loans on behalf of the master servicer and, in such capacity, will primary service underlying mortgage loans representing 12.8% or more of the initial mortgage pool balance. KeyCorp Real Estate Capital Markets, Inc. is a wholly-owned subsidiary of KeyBank National Association, one of the mortgage loan sellers and a sponsor, and an affiliate of McDonald Investments Inc., one of the underwriters. See ‘‘Transaction Participants—The Servicers—KeyCorp Real Estate Capital Markets, Inc.’’ in this prospectus supplement.
Initial Special Servicer LNR Partners, Inc., a Florida corporation, will act as the initial special servicer for the mortgage pool, subject to the discussion under ‘‘—1211 Avenue of the Americas Mortgagee of Record, Master Servicer and Special Servicer’’ and ‘‘—Triangle Town Center Mortgagee of Record, Master Servicer and Special Servicer’’ below. See ‘‘Transaction Participants—the Servicers—The Initial Special Servicer’’ in this prospectus supplement.
Non-Trust Mortgage Loan Noteholders The underlying mortgage loans secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as 1211 Avenue of the Americas, Extendicare Portfolio, Reston Town Center, Triangle Town Center Subordinate Tranche, Park Place LaPalma and Gaffney Portfolio, respectively, are each part of a loan combination, as described under ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement. A loan combination consists of two (2) or more cross-defaulted mortgage loans that are obligations of the same borrower(s) and secured by the same mortgage instrument(s) encumbering the same mortgaged real property or group of mortgaged real properties. Only one of the mortgage loans in any particular loan combination will be transferred to the issuing entity. The remaining mortgage loan(s) in each of those loan combinations will not be included in the trust fund. Any mortgage loan that is part of a loan combination, but is not an asset of the issuing entity, is sometimes referred to in this prospectus supplement as a non-trust mortgage loan. Pursuant to one or more co-lender or similar agreements with respect to each of the foregoing loan combinations, the holder of a particular non-trust mortgage loan in the subject loan combination, or a group of holders of the mortgage loans in the subject loan combination (acting together), may be granted various rights and powers with respect to the subject loan combination. In some cases, those rights and powers may be assignable or may be exercised through a representative or designee. See ‘‘Description of the Mortgage Pool—Loan Combinations,’’ ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ and ‘‘Servicing of the 1211 Avenue of

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the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement for a more detailed description of certain of the foregoing rights of the respective non-trust mortgage loan noteholders and/or their representatives and designees.
1211 Avenue of the Americas
    Mortgagee of Record, Master
    Servicer and Special Servicer		 The entire 1211 Avenue of the Americas loan combination, including the 1211 Avenue of the Americas underlying mortgage loan, is currently being—and, upon issuance of the series 2006-C7 certificates, will continue to be—serviced and administered pursuant to the pooling and servicing agreement relating to the LB-UBS Commercial Mortgage Trust 2006-C6, Commercial Mortgage Pass-Through Certificates, Series 2006-C6 commercial mortgage securitization. The series 2006-C6 pooling and servicing agreement provides for servicing arrangements that are similar but not identical to those under the series 2006-C7 pooling and servicing agreement. In that regard—
• LaSalle Bank National Association is the trustee under the series 2006-C6 pooling and servicing agreement and will, in that capacity, be the mortgagee of record with respect to the entire 1211 Avenue of the Americas loan combination;
• Wachovia Bank, National Association is the master servicer under the series 2006-C6 pooling and servicing agreement and will, in that capacity, be the initial master servicer for the entire 1211 Avenue of the Americas loan combination, subject to resignation or, solely in connection with an event of default, replacement pursuant to the terms of the series 2006-C6 pooling and servicing agreement; and
• LNR Partners, Inc., a Florida corporation, is the special servicer under the series 2006-C6 pooling and servicing agreement and will, in that capacity, be the initial special servicer for the entire 1211 Avenue of the Americas loan combination, subject to resignation or replacement pursuant to the terms of the series 2006-C6 pooling and servicing agreement, including replacement, without cause, by the holders of a majority interest in a designated controlling class of series 2006-C6 certificates.
Notwithstanding the foregoing, references in this prospectus supplement to the trustee, master servicer and special servicer will mean the trustee, master servicer and special servicer, respectively, under the series 2006-C7 pooling and servicing agreement unless the context clearly indicates otherwise.
Triangle Town Center Mortgagee of
    Record, Master Servicer and Special
    Servicer		 The entire Triangle Town Center loan combination, including the Triangle Town Center Subordinate Tranche underlying mortgage loan, is currently being—and, upon issuance of the series 2006-C7 certificates, will continue to be—serviced and administered pursuant to the pooling and servicing agreement relating to the LB-UBS Commercial Mortgage Trust 2006-C1, Commercial Mortgage Pass-Through Certificates, Series 2006-C1 commercial mortgage securitization, which provides for servicing arrangements that are similar but not identical to those under the series 2006-C7 pooling and servicing agreement. In that regard—

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• LaSalle Bank National Association is the trustee under the series 2006-C1 pooling and servicing agreement and will, in that capacity, be the mortgagee of record with respect to the entire Triangle Town Center loan combination;
• Wachovia Bank, National Association is the master servicer under the series 2006-C1 pooling and servicing agreement and will, in that capacity, be the initial master servicer for the entire Triangle Town Center loan combination, subject to resignation or, solely in connection with an event of default, replacement pursuant to the terms of the series 2006-C1 pooling and servicing agreement; and
• LNR Partners, Inc., a Florida corporation, is the special servicer under the series 2006-C1 pooling and servicing agreement and will, in that capacity, be the initial special servicer for the entire Triangle Town Center loan combination, subject to resignation or replacement pursuant to the terms of the series 2006-C1 pooling and servicing agreement, including replacement, without cause, (a) by the holders of a majority interest in a designated controlling class of series 2006-C1 certificates, and (b) as special servicer with respect to the Triangle Town Center loan combination only, if and for so long as the total unpaid principal balance of the Triangle Town Center Subordinate Tranche underlying mortgage loan, net of any appraisal reduction amount with respect to the subject loan combination allocable under the series 2006-C1 pooling and servicing agreement to the Triangle Town Center Subordinate Tranche underlying mortgage loan, is greater than, or equal to, 25% of the original principal balance of that underlying mortgage loan, by the series 2006-C7 controlling class representative, as designee of the holder of the Triangle Town Center Subordinate Tranche underlying mortgage loan.
We further discuss appraisal reduction amounts and the allocation thereof under ‘‘—The Underlying Mortgage Loans and the Mortgaged Real Properties—Advances of Delinquent Monthly Debt Service Payments’’ below.
Notwithstanding the foregoing, references in this prospectus supplement to the trustee, master servicer and special servicer will mean the trustee, master servicer and special servicer, respectively, under the series 2006-C7 pooling and servicing agreement unless the context clearly indicates otherwise.
Controlling Class of Certificateholders The holders or beneficial owners of certificates representing a majority interest in a designated controlling class of the series 2006-C7 certificates will have, directly or acting through a designated representative, certain rights and powers under the series 2006-C7 pooling and servicing agreement, as described under ‘‘Risk Factors—The Interests of the Series 2006-C7 Controlling Class Certificateholders May Be in Conflict with the Interests of the Offered Certificateholders’’ and ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ and ‘‘—Replacement of the Special Servicer’’ in this prospectus supplement.
Unless there are significant losses on the underlying mortgage loans, the controlling class of series 2006-C7 certificateholders will be the holders of a non-offered class of series 2006-C7 certificates.

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Summary of Transaction Parties

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Relevant Dates and Periods

Cut-off Date The cut-off date for the mortgage loans that we intend to include in the trust is November 13, 2006. All payments and collections received on each underlying mortgage loan after its cut-off date, excluding any payments or collections that represent amounts due on or before that cut-off date, will belong to the trust.
Issue Date The date of initial issuance for the offered certificates will be on or about December 5, 2006.
Distribution Frequency / Distribution
    Date		 Payments on the offered certificates are scheduled to occur monthly, commencing in December 2006. During any given month, the distribution date will be the fourth business day following the 11th calendar day of that month or, if that 11th calendar day is not a business day, then the fifth business day following that 11th calendar day.
Record Date The record date for each monthly payment on an offered certificate will be the last business day of the prior calendar month. However, the initial record date shall be the date of initial issuance of the series 2006-C7 certificates. The registered holders of the series 2006-C7 certificates at the close of business on each record date will be entitled to receive, on the following distribution date, any payments on those certificates, except that the last payment on any offered certificate will be made only upon presentation and surrender of the certificate.
Collection Period Amounts available for payment on the offered certificates on any distribution date will depend on the payments and other collections received, and any advances of payments due, on the underlying mortgage loans during the related collection period. In general, each collection period—
• will relate to a particular distribution date,
• will be approximately one month long,
• will begin immediately after the prior collection period ends or, in the case of the first collection period, will begin on the day following the cut-off date, and
• will end on a specified day of the same calendar month in which the related distribution date occurs or, if that specified day is not a business day, then on the immediately following business day.
However, the collection period for any distribution date for any underlying mortgage loan that is part of a loan combination may differ from the collection period with respect to the rest of the mortgage pool for that distribution date. Accordingly, there may be multiple collection periods with respect to each distribution date, such as (a) a collection period with respect to each underlying mortgage loan that is part of a loan combination, and (b) a collection period with respect to the rest of the mortgage pool, which collection periods will not necessarily coincide with each other.
Unless the context clearly indicates otherwise, references in any other portion of this prospectus supplement to ‘‘collection period’’ will mean, individually and collectively, as applicable, all of the foregoing collection periods for the subject distribution date.

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Interest Accrual Period The amount of interest payable with respect to the offered certificates on any distribution date will be a function of the interest accrued during the related interest accrual period. The interest accrual period for the offered certificates for any distribution date will be the period commencing on the 11th day of the month preceding the month in which that distribution date occurs and ending on the 10th day of the month in which that distribution date occurs. Interest will be calculated with respect to each class of offered certificates assuming that each year consists of twelve 30-day months.
Rated Final Distribution Date The rated final distribution date for the respective classes of the offered certificates with principal balances is the distribution date in November 2038. See ‘‘Ratings’’ in this prospectus supplement.
Assumed Final Distribution Date With respect to any class of offered certificates, the assumed final distribution date is the distribution date on which the holders of those certificates would be expected to receive their last payment and the total principal balance or notional amount, as applicable, of those certificates would be expected to be reduced to zero, based upon—
• the assumption that each borrower timely makes all payments on its underlying mortgage loan;
• the assumption that each underlying mortgage loan with an anticipated repayment date is paid in full on that date;
• the assumption that no borrower otherwise prepays its underlying mortgage loan prior to stated maturity; and
• the other modeling assumptions referred to under ‘‘Yield and Maturity Considerations’’ in, and set forth in the glossary to, this prospectus supplement.
Accordingly, the assumed final distribution date for each class of offered certificates is the distribution date in the calendar month and year set forth below for that class:

Class Month and Year of Assumed Final Distribution Date
A-1 August 2011
A-2 November 2011
A-AB December 2015
A-3 October 2016
A-1A October 2016
A-M October 2016
A-J November 2016
B November 2016
C November 2016
D November 2016
E November 2016
F November 2016
X-CP November 2013

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Description of the Offered Certificates

Registration and Denominations We intend to deliver the offered certificates in book-entry form in original denominations of $10,000 initial principal balance—or, solely in the case of the class X-CP certificates, $250,000 initial notional amount—and in any greater whole dollar denominations.
You will initially hold your offered certificates, directly or indirectly, through The Depository Trust Company, and they will be registered in the name of Cede & Co. as nominee for The Depository Trust Company. 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 under ‘‘Description of the Certificates—Book-Entry Registration’’ in the accompanying base prospectus.
Payments
A. General The trustee will make payments of interest and, except in the case of the class X-CL, X-CP and X-W certificates, principal to the following classes of series 2006-C7 certificateholders, sequentially as follows:

1st A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and X-W
2nd A-M
3rd A-J
4th B
5th C
6th D
7th E
8th F
9th G
10th H
11th J
12th K
13th L
14th M
15th N
16th P
17th Q
18th S
19th T
Amounts allocable as interest and principal with respect to the non-trust mortgage loans will not be available to make payments of interest and/or principal with respect to the classes of series 2006-C7 certificates listed in the foregoing table.
The allocation of interest payments among the A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and X-W classes is described under ‘‘—Payments—Payments of Interest’’ below. The class R-I, R-II, R-III and V certificates do not bear interest and do not entitle their respective holders to payments of interest.

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The allocation of principal payments among the A1, A-2, A-AB, A-3 and A-1A classes is described under ‘‘—Payments—Payments of Principal’’ below. The class X-CL, X-CP, X-W, R-I, R-II, R-III and V certificates do not have principal balances and do not entitle their respective holders to payments of principal.
See ‘‘Description of the Offered Certificates—Payments—Priority of Payments’’ in this prospectus supplement.
B.    Loan Groups For purposes of allocating payments on certain classes of the offered certificates, the mortgage pool will be divided into:
• a loan group 1 consisting of all of the underlying mortgage loans that are generally secured by property types other than multifamily and mobile home park, together with one (1) underlying mortgage loan that is secured by a multifamily property or mobile home park property; and
• a loan group 2 consisting of all but one (1) of the underlying mortgage loans that are generally secured by multifamily and mobile home park properties.
Loan group 1 will contain a total of 141 underlying mortgage loans that represent 85.8% of the initial mortgage pool balance, and loan group 2 will contain a total of 43 underlying mortgage loans that represent 14.2% of the initial mortgage pool balance. The loan group in which each underlying mortgage loan is included is identified on Annex A-1 to this prospectus supplement.
As and to the extent described under ‘‘—Payments of Principal’’ and ‘‘Description of the Offered Certificates—Payments—Payments of Principal’’ and ‘‘—Payments—Priority of Payments’’ below in this prospectus supplement, amounts collected with respect to loan group 2 will have a direct effect on distributions to the holders of the class A-1A certificates and amounts collected with respect to loan group 1 will have a direct effect on distributions to the holders of the class A-1, A-2, A-AB and A-3 certificates.
C.    Payments of Interest Each class of series 2006-C7 certificates—other than the class R-I, R-II, R-III and V certificates—will bear interest. In each case, that interest will accrue during each interest accrual period based upon—
• the pass-through rate applicable for the particular class of series 2006-C7 certificates for that interest accrual period,
• the total principal balance or notional amount, as the case may be, of the particular class of series 2006-C7 certificates outstanding immediately prior to the related distribution date, and
• the assumption that each year consists of twelve 30-day months.
Interest payments with respect to the class A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and X-W certificates are to be made concurrently:
• in the case of the class A-1, A-2, A-AB and A-3 certificates, on a pro rata basis in accordance with the respective interest entitlements evidenced by those classes of series 2006-C7 certificates, from available funds attributable to loan group 1;
• in the case of the class A-1A certificates, from available funds attributable to loan group 2; and

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• in the case of the class X-CP, X-CL and X-W certificates, on a pro rata basis in accordance with the respective interest entitlements evidenced by those classes of series 2006-C7 certificates, from available funds attributable to loan group 1 and/or loan group 2;
provided, that if the foregoing would result in a shortfall in the interest payment on any of the A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and/or X-W classes, then payments of interest will be made on those classes of series 2006-C7 certificates, on a pro rata basis in accordance with the respective interest entitlements evidenced thereby, from available funds attributable to the entire mortgage pool; and provided, further, that the ‘‘available funds’’ referred to above in this sentence do not include amounts attributable to any non-trust mortgage loan.
The borrowers under the underlying mortgage loans are generally prohibited from making whole or partial voluntary prepayments that are not accompanied by a full month’s interest on the prepayment. If, however, a whole or partial voluntary prepayment—or, to the extent it results from the receipt of insurance proceeds or a condemnation award, a whole or partial involuntary prepayment —on an underlying mortgage loan is not accompanied by the amount of one full month’s interest on the prepayment, then, as and to the extent described under ‘‘Description of the Offered Certificates—Payments—Payments of Interest’’ in this prospectus supplement, the resulting shortfall, less—
• the amount of the master servicing fee that would have been payable from that uncollected interest, and
• in the case of a voluntary prepayment on a non-specially serviced mortgage loan, the applicable portion of the payment made by the master servicer to cover prepayment interest shortfalls resulting from the voluntary prepayments on non-specially serviced mortgage loans during the related collection period,
will generally be allocated to reduce the amount of accrued interest otherwise payable to the holders of all of the interest-bearing classes of the series 2006-C7 certificates, including the offered certificates, on a pro rata basis in accordance with the respective amounts of interest actually accrued on those classes during the corresponding interest accrual period.
On each distribution date, subject to available funds and the payment priority described under ‘‘—Payments—General’’ 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—Payments—Payments of Interest’’ and ‘‘—Payments—Priority of Payments’’ in this prospectus supplement.
D.    Payments of Principal Subject to available funds and the payment priority described under ‘‘— Payments—General’’ above, the holders of each class of offered certificates, other than the class X-CP certificates, will be entitled to receive a total amount of principal over time equal to the total principal balance of their particular class.
Subject to the discussion under ‘‘—Payments—Amortization, Liquidation and Payment Triggers’’ below, the trustee is required to make payments of principal to the holders of the various classes of the series 2006-C7 principal balance certificates, in a specified sequential order, such that:

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• no payments of principal will be made to the holders of any of the class G, H, J, K, L, M, N, P, Q, S and T certificates until the total principal balance of the offered certificates (exclusive of the class X-CP certificates) is reduced to zero;
• no payments of principal will be made to the holders of the class A-M, A-J, B, C, D, E or F certificates until, in the case of each class of those offered certificates, the total principal balance of all more senior classes of offered certificates (exclusive of the class X-CP certificates) is reduced to zero;
• no payments of principal with respect to loan group 1 will be made to the holders of the class A-1A certificates until the total principal balance of the class A-1, A-2, A-AB and A-3 certificates is reduced to zero;
• no payments of principal with respect to loan group 2 will be made to the holders of the class A-1, A-2, A-AB and/or A-3 certificates until the total principal balance of the class A-1A certificates is reduced to zero;
• no payments of principal will be made to the holders of the class A-1, A-2, A-AB and/or A-3 certificates on any given distribution date until the holders of the class A-1A certificates have received all payments of principal to which they are entitled on that distribution date with respect to loan group 2;
• on any given distribution date, beginning with the distribution date in November 2011, the total principal balance of the class A-AB certificates must be paid down to the applicable scheduled principal balance for that class set forth on Annex F to this prospectus supplement before any payments of principal are made with respect to the class A-1, A-2 and/or A-3 certificates; and
• no payments of principal will be made to the holders of the class A-3 certificates until the total principal balance of the class A-1, A-2 and A-AB certificates is reduced to zero, no payments of principal will be made to the holders of the class A-AB certificates (other than as described in the immediately preceding bullet) until the total principal balance of the class A-1 and A-2 certificates is reduced to zero, and no payments of principal will be made to the holders of the class A-2 certificates until the total principal balance of the class A-1 certificates is reduced to zero.
The total payments of principal to be made on the series 2006-C7 principal balance certificates on any distribution date will, in general, 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; and
• the amount of any prepayments and other unscheduled collections of previously unadvanced principal with respect to the underlying mortgage loans that are received during the related collection period.
However, if the master servicer, the special 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 underlying 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

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2006-C7 principal balance certificates, prior to being deemed reimbursed out of payments and other collections of interest otherwise distributable on the series 2006-C7 certificates. In addition, if payments and other collections of principal on the mortgage pool are applied to reimburse, or pay interest on, any advance that is determined to be nonrecoverable from collections on the related underlying mortgage loan, as described in the prior sentence, then that advance will be reimbursed, and/or interest thereon will be paid, first out of payments or other collections of principal on the loan group (i.e., loan group 1 or loan group 2, as applicable) that includes the subject underlying mortgage loan as to which the advance was made, and prior to using payments or other collections of principal on the other loan group.
The class X-CL, X-CP, X-W, R-I, R-II, R-III and V certificates do not have principal balances and do not entitle their holders to payments of principal.
See ‘‘Description of the Offered Certificates—Payments—Payments of Principal,’’ and ‘‘—Payments—Priority of Payments’’ in this prospectus supplement.
E.    Amortization, Liquidation and
    Payment Triggers		 Because of losses on the underlying mortgage loans and/or default-related or other unanticipated expenses of the issuing entity, the total principal balance of the class A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates may be reduced to zero at a time when the class A-1, A-2, A-AB, A-3 and A-1A certificates, or any two or more classes of those certificates, remain outstanding. If that occurs, then any payments of principal on the outstanding class A-1, A-2, A-AB, A-3 and A-1A certificates will be made among those classes of series 2006-C7 certificates on a pro rata basis in accordance with their respective total principal balances.
Also, specified parties may terminate the trust when the mortgage pool balance is reduced to less than approximately 1.0% of the initial mortgage pool balance, as described under ‘‘—Optional Termination’’ below.
F.    Payments of Prepayment Premiums
    and Yield Maintenance Charges		 If any prepayment premium or yield maintenance charge is collected on any of the underlying mortgage loans, then the trustee will pay that amount, net of any liquidation fee or workout fee payable in connection with the receipt thereof, in the proportions described under ‘‘Description of the Offered Certificates— Payments—Payments of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement, to—
• the holders of the class X-CL certificates;
• the holders of the class X-CP certificates;
• the holders of the class X-W certificates; and/or
• the holders of any of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J and/or K certificates that are then entitled to receive any principal payments with respect to the loan group that includes the prepaid mortgage loan.
Fees and Expenses The amounts available for distribution on the series 2006-C7 certificates on any distribution date will generally be net of the following amounts:

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Type / Recipient (1) Amount Frequency
Fees    
Master Servicing Fee /
Master Servicer		 With respect to each underlying mortgage loan, interest that accrues at the related master servicing fee rate on the same principal amount on which interest accrues or is deemed to accrue from time to time on that mortgage loan (2) Monthly
Additional Master Servicing Compensation / Master Servicer Prepayment interest excesses on underlying mortgage loans that are the subject of a principal prepayment in full or in part after their due date in any collection period. Time to time
All interest and investment income earned on amounts on deposit in the master servicer’s pool custodial account and in any serviced loan combination-specific custodial account. Monthly
All interest and investment income earned on amounts on deposit in the servicing accounts, reserve accounts and the defeasance account maintained by the master servicer, to the extent not otherwise payable to the borrowers. Monthly
Outside Master Servicing Fee/Master Servicer of an Outside Serviced Underlying Mortgage Loan With respect to each of the 1211 Avenue of the Americas underlying mortgage loan and the Triangle Town Center Subordinate Tranche underlying mortgage loan, interest that accrues at the related outside master servicing fee rate on the same principal amount on which interest accrues or is deemed to accrue from time to time on the subject outside serviced underlying mortgage loan. (3) Monthly
Special Servicing Fee / Special Servicer With respect to each underlying mortgage loan (other than the outside serviced underlying mortgage loans) and non-trust mortgage loan that is being specially serviced or as to which the related mortgaged real property has become an REO property, one-twelfth of the annual special servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time on such mortgage loan (4) Monthly

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Type / Recipient (1) Amount Frequency
Workout Fee / Special Servicer With respect to each underlying mortgage loan (other than the outside serviced underlying mortgage loans) and non-trust mortgage loan that has been and continues to be worked out, the workout fee rate of 1.0% multiplied by each collection of interest (other than default interest and post-anticipated repayment date additional interest), principal and prepayment consideration received on the subject mortgage loan for so long as it remains a worked-out mortgage loan. Time to time
Liquidation Fee / Special Servicer With respect to any specially serviced mortgage loan (other than an outside serviced underlying mortgage loan) for which the special servicer obtains a full, partial or discounted payoff and with respect to any specially serviced mortgage loan (other than an outside serviced underlying mortgage loan) or REO property as to which the special servicer obtains any liquidation proceeds, with limited exceptions, an amount calculated by application of a liquidation fee rate of 1.0% to the related payment or proceeds (exclusive of default interest and post-anticipated repayment date additional interest). Time to time
Additional Special Servicing Compensation / Special Servicer All interest and investment income earned on amounts on deposit in the special servicer’s REO account. Monthly
Outside Special Servicing Fee / Special Servicer of an Outside Serviced Underlying Mortgage Loan With respect to the 1211 Avenue of the Americas underlying mortgage loan and the Triangle Town Center Subordinate Tranche underlying mortgage loan, one-twelfth of the related annual outside special servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time on the subject outside serviced underlying mortgage loan. (3)(5) Monthly
Outside Serviced Trust Mortgage Loan Workout Fee and Liquidation Fee / Other Special Servicer of an Outside Serviced Underlying Mortgage Loan With respect to each outside serviced underlying mortgage loan, the related liquidation fee and workout fee due and owing under the applicable outside servicing agreement are substantially identical to the corresponding fees under the series 2006-C7 pooling and servicing agreement. (5) Time to time
Additional Servicing Compensation / Master Servicer and/or Special Servicer (6) All assumption fees, assumption application fees, modification fees, consent fees, extension fees and similar fees actually collected on the underlying mortgage loans (other than the outside serviced underlying mortgage loans) and the non-trust mortgage loans. Monthly

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Type / Recipient (1) Amount Frequency
  Late payment charges and default interest collected on any mortgage loan (and, in the case of an outside serviced underlying mortgage loan, passed through to the issuing entity), but only to the extent such late payment charges and default interest are not otherwise applied to cover (i) interest on advances or (ii) additional trust fund expenses (exclusive of special servicing fees, liquidation fees and workout fees) with respect to the subject mortgage loan or mortgaged real property, which items either are then currently payable or were previously paid from collections on the mortgage pool and not previously reimbursed. Time to time
Trustee Fee / Trustee With respect to each and every underlying mortgage loan, interest that accrues at the trustee fee rate on the stated principal balance of that mortgage loan from time to time. (7) Monthly
Additional Trustee Compensation / Trustee All interest and investment income earned on amounts on deposit in the trustee’s collection account and interest reserve account. Monthly
Expenses    
Servicing Advances / Trustee, Master Servicer or Special Servicer To the extent of funds available, the amount of any servicing advances. (8)(10) Time to time
Interest on Servicing Advances / Master Servicer, Special Servicer or Trustee At a rate per annum equal to a published prime rate, accrued on the amount of each outstanding servicing advance. (9)(10) Time to time
P&I Advances / Master Servicer and Trustee To the extent of funds available, the amount of any P&I advances. (8) Time to time
Interest on P&I Advances / Master Servicer and Trustee At a rate per annum equal to a published prime rate, accrued on the amount of each outstanding P&I advance. (9) Time to time
Indemnification Expenses / Trustee, Depositor, Master Servicer or Special Servicer and any director, officer, employee or agent of any of the foregoing parties Amount to which such party is entitled for indemnification under the series 2006-C7 pooling and servicing agreement. (11) Time to time
Servicing Advances, Interest on Servicing Advances, Indemnification Expenses / Master Servicer or Special Servicer of an Outside Serviced Underlying Mortgage Loan Substantially the same as corresponding items under the series 2006-C7 pooling and servicing agreement. (12)(13) Time to time
Interest on delinquency advances with respect to the Triangle Town Center non-trust mortgage loans / Applicable Advancing Party Substantially the same as corresponding item under the series 2006-C7 pooling and servicing agreement. (13) Time to time

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(1) If the trustee succeeds to the position of master servicer, it will be entitled to receive the same fees and be reimbursed for the same expenses of the master servicer described in this prospectus supplement. Any change to the fees and expenses described in this prospectus supplement would require an amendment to the series 2006-C7 pooling and servicing agreement. See ‘‘Description of the Governing Documents—Amendment’’ in the accompanying base prospectus.
(2) The master servicing fee rate payable under the series 2006-C7 pooling and servicing agreement for each outside serviced underlying mortgage loan will be 0.01% per annum.The master servicing fee rate payable under the series 2006-C7 pooling and servicing agreement for each other underlying mortgage loan will range, on a loan-by-loan basis, from 0.0200% per annum to 0.1100% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses—Principal Master Servicing Compensation.’’
(3) For each of the 1211 Avenue of the Americas underlying mortgage loan and the Triangle Town Center Subordinate Tranche underlying mortgage loan, the outside master servicing fee rate will equal 0.01% per annum and the outside special servicing fee rate will equal 0.35% per annum (subject to a monthly minimum of $4,000 per specially serviced loan combination).
(4) The special servicing fee rate for each underlying mortgage loan (other than an outside serviced underlying mortgage loan) will equal 0.25% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses—Principal Special Servicing Compensation—The Special Servicing Fee.’’
(5) Amounts otherwise payable to the issuing entity with respect to the Triangle Town Center Subordinate Tranche underlying mortgage loan will be applied to cover special servicing fees, workout fees and liquidation fees earned with respect to the non-trust mortgage loan in the related loan combination before amounts on those non-trust loans are so applied.
(6) Allocable between the master servicer and the special servicer as provided in the series 2006-C7 pooling and servicing agreement.
(7) The trustee fee rate will equal 0.00065% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Trustee Compensation.’’
(8) Reimbursable out of collections on the related underlying mortgage loan, except that advances that are determined not to be recoverable out of related collections will, in general, be reimbursable first out of general collections of principal on the mortgage pool and then out of other general collections on the mortgage pool.
(9) In general, payable out of late payment charges and/or default interest on the related mortgage loan or, in connection with or after reimbursement of the related advance, out of general collections on the mortgage pool.
(10) In the case of a loan combination serviced under the series 2006-C7 pooling and servicing agreement, payable out of collections thereon.
(11) Payable out of general collections on the mortgage pool. In general, none of the above specified persons is entitled to indemnification for (a) any liability specifically required to be borne thereby pursuant to the terms of the series 2006-C7 pooling and servicing agreement, or (b) any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of, or the negligent disregard of, such party’s obligations and duties under the series 2006-C7 pooling and servicing agreement, or as may arise from a breach of any representation or warranty of such party made in the series 2006-C7 pooling and servicing agreement, or (c) any loss, liability or expense that constitutes an advance, the reimbursement of which has otherwise been provided for under the series 2006-C7 pooling and servicing agreement, or allocable overhead.
(12) To the extent related to the 1211 Avenue of the Americas loan combination or the Triangle Town Center loan combination, payable out of collations on the subject loan combination.
(13) In the case of the Triangle Town Center loan combination, payable first out of amounts otherwise payable to issuing entity with respect to the Triangle Town Center Subordinate Tranche underlying mortgage loan and then out of other collections on the subject loan combination.
The foregoing fees and expenses will generally be payable prior to distribution on the series 2006-C7 certificates. Further information with respect to the foregoing fees and expenses, as well as additional expenses of the trust, including information regarding the general purpose of and the source of payment for those fees and expenses, is set forth under ‘‘Description of the Offered Certificates—Fees and Expenses’’ in this prospectus supplement.

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Reductions of Certificate Principal
    Balances in Connection with Losses
    on the Underlying Mortgage Loans
    and Default-Related and Other
    Unanticipated Expenses		 Because of losses on the underlying mortgage loans—including, for this purpose, advances that are reimbursed out of general collections on the mortgage pool because collections on the related underlying mortgage loan are determined to be insufficient to make such reimbursement—and/or default-related and other unanticipated expenses of the issuing entity, the total principal balance of the mortgage pool, net of outstanding advances of principal, may fall below the total principal balance of the series 2006-C7 principal balance certificates. If and to the extent that those losses on the underlying mortgage loans and/or expenses of the issuing entity cause such a deficit to exist following the payments made on the series 2006-C7 certificates on any distribution date, the total principal balances of the following classes of series 2006-C7 principal balance certificates will be sequentially reduced, in the following order, until that deficit is eliminated:

Reduction Order Class
1st T
2nd S
3rd Q
4th P
5th N
6th M
7th L
8th K
9th J
10th H
11th G
12th F
13th E
14th D
15th C
16th B
17th A-J
18th A-M
19th A-1, A-2, A-AB,
A-3 and A-1A, pro rata
by total principal balance
See ‘‘Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ in this prospectus supplement.
Reports to Certificateholders On each distribution date, the trustee will provide or make available to the registered holders of the series 2006-C7 certificates a monthly report substantially in the form of Annex D to this prospectus supplement. The trustee’s report will detail, among other things, the payments made to the series 2006-C7 certificateholders on that distribution date and the performance of the underlying mortgage loans and the mortgaged real properties.
Upon reasonable prior notice, you may also review 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.

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See ‘‘Description of the Offered Certificates—Reports to Certificateholders; Available Information’’ in this prospectus supplement.
Optional Termination Specified parties to the transaction may terminate the trust by purchasing all of the mortgage loans and any foreclosure properties held by the trust, but only when the total principal balance of the mortgage pool, net of outstanding advances of principal, is less than 1.0% of the initial mortgage pool balance.
In addition, following the date on which the total principal balances of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F and G certificates are reduced to zero, the trust fund may also be terminated, with the consent of 100% of the remaining 2006-C7 certificateholders and the master servicer and subject to such additional conditions as may be set forth in the series 2006-C7 pooling and servicing agreement, in connection with an exchange of all the remaining series 2006-C7 certificates for all the mortgage loans and foreclosure properties remaining in the trust fund at the time of exchange.
See ‘‘Description of the Offered Certificates—Termination’’ in this prospectus supplement.

The Underlying Mortgage Loans and the Mortgaged Real Properties

General In this section, ‘‘—The Underlying Mortgage Loans and the Mortgaged Real Properties,’’ we provide summary information with respect to the mortgage loans that we intend to include in the trust. For more detailed information regarding those mortgage loans, you should review the following sections in this prospectus supplement:
• ‘‘Risk Factors;’’
• ‘‘Description of the Mortgage Pool;’’
• Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans;
• Annex A-2—Certain Characteristics of the Mortgage Pool;
• Annex A-3—Certain Characteristics of Loan Group 1;
• Annex A-4—Certain Characteristics of Loan Group 2;
• Annex A-5—Certain Monetary Terms of the Underlying Mortgage Loans;
• Annex A-6—Certain Information Regarding Reserves; and
• Annex B—Certain Information Regarding Multifamily Properties.
For purposes of calculating distributions on certain classes of the offered certificates, the pool of mortgage loans backing the series 2006-C7 certificates will be divided into a loan group 1 and a loan group 2.
Loan group 1 will consist of all of the underlying mortgage loans that are secured by property types other than multifamily and mobile home park, together with one (1) underlying mortgage loan that is secured by a multifamily property or mobile home park property. Loan group 1 will consist of 141 mortgage loans, with an initial loan group 1 balance of $2,592,035,525, representing approximately 85.8% of the initial mortgage pool balance.

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Loan group 2 will consist of all but one (1) of the underlying mortgage loans that are secured by multifamily or mobile home park properties. Loan group 2 will consist of 43 mortgage loans, with an initial loan group 2 balance of $427,623,015, representing approximately 14.2% of the initial mortgage pool balance. See Annex B—Certain Information Regarding Multifamily Properties.
When reviewing the information that we have included in this prospectus supplement, including the Annexes hereto, with respect to the mortgage loans that are to back the offered certificates, please note that—
• All numerical information provided with respect to the underlying mortgage loans is provided on an approximate basis.
• References to initial mortgage pool balance mean the aggregate cut-off date principal balance of all the underlying mortgage loans, references to the initial loan group 1 balance mean the aggregate cut-off date principal balance of the underlying mortgage loans in loan group 1 and references to the initial loan group 2 balance mean the aggregate cut-off date principal balance of the underlying mortgage loans in loan group 2. We will transfer each of the underlying mortgage loans, at its respective cut-off date principal balance, to the trust. We show the cut-off date principal balance for each of the underlying mortgage loans on Annex A-1 to this prospectus supplement.
• All weighted average information provided with respect to the mortgage loans reflects a weighting based on their respective cut-off date principal balances.
• When information with respect to mortgaged real properties is expressed as a percentage of the initial mortgage pool balance, the initial loan group 1 balance or the initial loan group 2 balance, the percentages are based upon the cut-off date principal balances of the related underlying mortgage loans or allocated portions of those balances.
• With respect to each of the underlying mortgage loans that are part of a loan combination, unless the context clearly indicates otherwise, certain statistical information—in particular, information relating to debt service coverage ratios, loan-to-value ratios and loan amount per square foot or other unit of measurement—in this prospectus supplement is calculated in the following manner:
1. with respect to the 1211 Avenue of the Americas underlying mortgage loan, taking into account the corresponding pari passu non-trust mortgage loan in the 1211 Avenue of the Americas loan combination;
2. with respect to the Extendicare Portfolio underlying mortgage loan, taking into account the corresponding pari passu non-trust mortgage loan in the Extendicare Portfolio loan combination;
3. with respect to the Triangle Town Center Subordinate Tranche underlying mortgage loan, taking into account the Triangle Town Center senior non-trust mortgage loans in the Triangle Town Center loan combination; and
4. with respect to each other loan combination identified in the loan combination chart under ‘‘—Relevant Parties—Non-Trust Mortgage Loan Noteholders,’’ without regard to the corresponding non-trust

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mortgage loan(s) in the subject loan combination, each of which is generally subordinate.
See ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan,’’ ‘‘—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loans,’’ ‘‘—Significant Underlying Mortgage Loans—The Reston Town Center Mortgage Loan’’ and ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement.
• If any of the underlying mortgage loans is secured by multiple real properties located in more than one state or representing more than one property type, a portion of the subject mortgage loan has been allocated to each of those properties.
• The general characteristics of the entire mortgage pool backing the offered certificates are not necessarily representative of the general characteristics of either loan group 1 or loan group 2. The yield and risk of loss on any class of offered certificates may depend on, among other things, the composition of each of loan group 1 and loan group 2. The general characteristics of each such loan group should also be analyzed when making an investment decision. See ‘‘—Additional Statistical Information’’ below.
• Whenever we refer to a particular mortgaged real property, or mortgage loan, by name, unless the particular term is otherwise specifically defined, we mean the mortgaged real property, or the mortgage loan secured by the mortgaged real property, identified by that name on Annex 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 as a result of changes in the composition of the mortgage pool prior to that date.
• It has been confirmed to us by S&P and/or Fitch that four (4) of the mortgage loans that we intend to include in the trust, representing 37.1% of the initial mortgage pool balance, each has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with investment grade-rated obligations. Those four (4) mortgage loans are described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans’’ in this prospectus supplement.
Loan Combinations Six (6) underlying mortgage loans, collectively representing 22.8% of the initial mortgage pool balance, 26.4% of the initial loan group 1 balance and 1.2% of the initial loan group 2 balance, are, in each case, part of a loan combination comprised of two (2) or more cross-defaulted mortgage loans that are all: (a) obligations of the same borrower(s); and (b) secured by the same mortgage instrument(s) encumbering the same mortgaged real property or properties. Only one mortgage loan in each such loan combination will be included in the trust. Each of the remaining mortgage loan(s) in each such loan combination will not be included in the trust and is sometimes referred to in this prospectus supplement as a non-trust mortgage loan.

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The following underlying mortgage loans are each part of a loan combination:

Mortgaged Property Name
(as identified on Annex A-1
to this Prospectus Supplement)		 Cut-off Date
Principal
Balance		 % of
Initial
Mortgage
Pool
Balance		 Original
Principal
Balanceof
Related
Pari Passu
Non-Trust
Loans(1)		 Original
Principal
Balance of
Related
Senior
Non-Trust
Loans(2)		 Original
Principal
Balance of
Related
Subordinate
Non-Trust
Loans(3)
1. 1211 Avenue of the Americas $ 275,000,000
9.1% $ 400,000,000
NAP NAP
2. Extendicare Portfolio $ 250,000,000
8.3% $ 250,000,000
NAP NAP
3. Reston Town Center $ 121,500,000
4.0% NAP NAP $ 89,750,000
4. Triangle Town Center Subordinate Tranche $ 29,000,000
1.0% NAP $127,034,076
$43,965,924		 NAP
5. Park Place LaPalma $ 8,223,932
0.3% NAP NAP $ 535,000
6. Gaffney Portfolio $ 5,325,698
0.2% NAP NAP $ 350,000
(1) Reflects pari passu non-trust mortgage loans that are, in each case, entitled to payments of interest and principal on a pro rata and pari passu basis with the related underlying mortgage loan that is part of the subject loan combination.
(2) Reflects senior non-trust mortgage loans that are, in each case, (i) prior to the occurrence of certain material uncured events of default, entitled to monthly payments of principal and interest on a senior, but pro rata, basis with the related underlying mortgage loan in the subject loan combination; and (ii) following and during the continuance of certain material uncured events of default with respect to the subject loan combination, entitled to payment of all accrued interest (other than default interest) and the total outstanding principal balance of the senior non-trust mortgage loans in the subject loan combination prior to payments of principal and interest being made with respect to the subject underlying mortgage loan.
(3) Reflects subordinate non-trust mortgage loans that are, in each case: (i) prior to the occurrence of certain material uncured events of default, entitled to monthly payments of principal and interest on a subordinate, but pro rata, basis with the related underlying mortgage loan in the subject loan combination; and (ii) following and during the continuance of certain material uncured events of default with respect to the subject loan combination, entitled to payments of principal and interest, only following payment of all accrued interest (other than default interest) and the total outstanding principal balance of the related underlying mortgage loan in the subject loan combination.

    

For a more detailed description of the priority of payments among the mortgage loans comprising each loan combination, see ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement.
Except as discussed above under ‘‘—1211 Avenue of the Americas Mortgagee of Record, Master Servicer and Special Servicer’’ and ‘‘—Triangle Town Center Mortgagee of Record, Master Servicer and Special Servicer,’’ each of the loan combinations will be serviced under the series 2006-C7 pooling and servicing agreement by the master servicer and the special servicer thereunder.
See ‘‘Description of the Mortgage Pool—Loan Combinations’’, ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ and ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement for a more detailed description of certain rights of the respective non-trust mortgage loan noteholders and/or their representatives and designees. See also ‘‘Risk Factors— Some of the Mortgaged Real Properties Are or May Be Encumbered by Additional Debt and the Ownership Interests in Some Borrowers Have Been or May Be Pledged to Secure Debt Which, in Either Case, May Reduce the Cash Flow Available to the Subject Mortgaged Real Property’’ in this prospectus supplement.

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Acquisition of Mortgage Loans On or prior to the date of initial issuance of the offered certificates, we will acquire the mortgage loans from the sponsors and/or affiliates thereof and will transfer the mortgage loans to the trust. Following the date of initial issuance of the series 2006-C7 certificates, no party will have the ability to add mortgage loans to the trust.
Payment and Other Terms Each of the mortgage loans that we intend to include in the trust is the obligation of a borrower to repay a specified sum with interest. Repayment of each of the mortgage loans that we intend to include in the trust is secured by a mortgage lien on the fee and/or leasehold interest of the related borrower or another party in one or more commercial or multifamily real properties. Except for limited permitted encumbrances, which we identify in the glossary to this prospectus supplement, that mortgage lien will be a first priority lien. However, the Triangle Town Center Subordinate Tranche underlying mortgage loan is subordinate in right of payment to both of the Triangle Town Center senior non-trust mortgage loans.
All of the mortgage loans that we intend to include in the trust are or should be considered nonrecourse. None of those mortgage loans is insured or guaranteed by any governmental agency or instrumentality or by any private mortgage insurer.
Each of the mortgage loans that we intend to include in the trust currently accrues interest at the annual rate specified with respect to that loan on Annex A-1 to this prospectus supplement. Except with respect to any mortgage loan that has an anticipated repayment date, as described below, the mortgage interest rate for each underlying mortgage loan is, in the absence of default, fixed for the entire term of the loan.
Subject, in some cases, to a next business day convention—
• One hundred forty-three (143) of the mortgage loans that we intend to include in the trust, representing 89.3% of the initial mortgage pool balance, provides for scheduled payments of principal and/or interest to be due on the eleventh day of each month;
• Forty (40) of the mortgage loans that we intend to include in the trust, representing 9.7% of the initial mortgage pool balance, each provides for scheduled payments of principal and/or interest to be due on the first day of each month; and
• One (1) of the mortgage loans that we intend to include in the trust, representing 1.0% of the initial mortgage pool balance, each provides for scheduled payments of principal and/or interest to be due on the fifth day of each month.
One hundred seventy-five (175) of the mortgage loans that we intend to include in the trust, representing 98.1% of the initial mortgage pool balance, of which 132 mortgage loans are in loan group 1, representing 97.8% of the initial loan group 1 balance, and 43 mortgage loans are in loan group 2, representing 100.0% of the initial loan group 2 balance, respectively, each referred to below as a balloon mortgage loan, provide for:
• either (a) amortization schedules that (i) are significantly longer than their respective remaining terms to stated maturity and (ii) in some cases, begin

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following the end of an initial interest-only period or (b) have no amortization prior to stated maturity; and
• a substantial balloon payment of principal on each of their respective maturity dates.
Fifty (50) of the balloon mortgage loans identified in the prior paragraph, representing 55.9% of the initial mortgage pool balance, of which 38 mortgage loans are in loan group 1, representing 57.5% of the initial loan group 1 balance, and 12 mortgage loans are in loan group 2, representing 46.2% of the initial loan group 2 balance, respectively, require payments of interest only to be due on each due date until the stated maturity date. Another 71 of the balloon mortgage loans identified in the prior paragraph, representing 31.2% of the initial mortgage pool balance, of which 48 mortgage loans are in loan group 1, representing 29.9% of the initial loan group 1 balance, and 23 mortgage loans are in loan group 2, representing 39.4% of the initial loan group 2 balance, respectively, require payments of interest only to be due on each due date until the expiration of a designated interest-only period that ends prior to the related stated maturity date.
Nine (9) of the mortgage loans that we intend to include in the trust, representing 1.9% of the initial mortgage pool balance, all of which are in loan group 1, representing 2.2% of the initial loan group 1 balance, each provides material incentives to the related borrower to pay the subject mortgage loan in full by a specified date prior to the related maturity date. We consider that date to be the anticipated repayment date for each of those mortgage loans. 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, which in each case will become effective as of the related anticipated repayment date, include:
• The calculation of interest at a rate per annum in excess of the initial mortgage interest rate. The additional interest in excess of interest at the initial mortgage interest rate will be deferred and will be payable only after the outstanding principal balance of the mortgage loan is paid in full.
• The application of excess cash flow from the mortgaged real property, after debt service payments and any specified reserves or expenses have been funded or paid, to pay the principal amount of the mortgage loan. The payment of principal from excess cash flow will be in addition to the principal portion, if any, of the normal monthly debt service payment.
With respect to six (6) of the underlying mortgage loans with anticipated repayment dates, representing 1.4% of the initial mortgage pool balance and 1.6% of the initial loan group 1 balance, payments of interest only are scheduled to be due on each due date until the expiration of a designated interest-only period that ends prior to the related anticipated repayment date.
Delinquency/Loss Information Except as described in the next paragraph, none of the mortgage loans that we intend to include in the trust were as of the cut-off date, or have been at any time since origination, 30 days or more delinquent with respect to any monthly debt service payment, and there has been no forgiveness of interest or principal with respect to any of the mortgage loans that we intend to include in the trust.

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Prepayment Provisions All of the mortgage loans that we intend to include in the trust provide for one or more of the following:
• a prepayment lock-out period, during which the principal balance of the mortgage loan may not be voluntarily prepaid in whole or in part;
• a defeasance period, during which voluntary prepayments are prohibited, but the related borrower may obtain a full or partial release of the related mortgaged real property through defeasance; and/or
• a prepayment consideration period, during which voluntary prepayments are permitted, subject to the payment of a yield maintenance premium or other additional consideration.
See ‘‘Description of the Mortgage Pool—Terms and Conditions of the Underlying Mortgage Loans—Prepayment Provisions’’ in this prospectus supplement.
Advances of Delinquent Monthly Debt     Service Payments Except as described below in this ‘‘—Advances of Delinquent Monthly Debt Service Payments’’ subsection, the master servicer will be required to make advances with respect to any delinquent scheduled debt service payments, other than balloon payments, due or assumed due on the underlying mortgage loans, in each case net of related master servicing fees and workout fees (and, in the case of an outside serviced underlying mortgage loan, further net of any comparable fees payable for the subject mortgage loan pursuant to the governing servicing agreement). In addition, the trustee must make any of those advances that the master servicer is required, but fails, to make. As described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Advances— Advances of Delinquent Monthly Debt Service Payments’’ in this prospectus supplement, any party that makes an advance will be entitled to be reimbursed for that advance, together with interest at a published prime rate.
Notwithstanding the foregoing, neither the master servicer nor the trustee will be required to make any advance that it or the special servicer determines will not be recoverable from proceeds of the related underlying mortgage loan.
Neither the master servicer nor the trustee will be required to make any advance of delinquent debt service payments with respect to any non-trust mortgage loan included in any of the loan combinations described in this prospectus supplement.
Subject to the discussions below regarding the outside serviced underlying mortgage loans, if there occurs or exists any of various specified adverse events or circumstances with respect to any underlying mortgage loan or the mortgaged real property for that mortgage loan, then a new appraisal—or, in cases involving underlying mortgage loans or mortgaged real properties with principal balances or allocated loan amounts, as the case may be, of less than $2,000,000, a valuation estimate of that property—must be obtained or conducted. If, based on that appraisal or other valuation, subject to the discussion below regarding underlying mortgage loans that are part of loan combinations, it is determined that—
• the principal balance of, and other delinquent amounts due under, the subject underlying mortgage loan, exceed
• an amount equal to—
1. 90% of the new appraised or estimated value of that real property, which value may be subject to reduction by the special servicer based on its review of the related appraisal and other relevant information, minus

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2. the amount of any obligations secured by liens on the property, which liens are prior to the lien of the mortgage loan, plus
3. certain escrows and reserves and any letters of credit constituting additional security for the mortgage loan,
then the amount otherwise required to be advanced with respect to interest on that mortgage loan will be reduced. The reduction will be in generally the same proportion that the excess, sometimes referred to as an appraisal reduction amount, bears to the principal balance of the mortgage loan, net of related advances of principal. Appraisal reduction amounts will not affect the principal portion of P&I advances.
The calculation of any appraisal reduction amount, as described above under this ‘‘—Advances of Delinquent Monthly Debt Service Payments’’ section, in respect of any underlying mortgage loan that is part of a loan combination will, in each case, take into account all of the mortgage loans comprising the related loan combination. The applicable servicer will determine whether an appraisal reduction amount exists with respect to the entire subject loan combination based on a calculation that generally treats the subject loan combination as if it was a single underlying mortgage loan. Except in the case of the Triangle Town Center loan combination, any resulting appraisal reduction amount will be allocated among the mortgage loans in a loan combination, in general, first, to any related non-trust mortgage loan(s) that are subordinate and, then, to the related underlying mortgage loan or, if applicable, on a pro rata basis by balance, between the related pari passu non-trust mortgage loan(s) and the related underlying mortgage loan, as described in the definition of ‘‘Appraisal Reduction Amount’’ in the Glossary to this prospectus supplement. In the case of the Triangle Town Center loan combination, any resulting appraisal reduction amount will be allocated, first, to the Triangle Town Center Subordinate Tranche underlying mortgage loan (which is the most subordinate mortgage loan in that loan combination), then, to the Triangle Town Center note B-1 senior non-trust mortgage loan, and finally to the Triangle Town Center note A senior non-trust mortgage loan, as described in the definition of ‘‘Appraisal Reduction Amount’’ in the Glossary to this prospectus supplement. The amount of advances of interest on any of the underlying mortgage loans that are part of a loan combination will reflect any appraisal reduction amount allocable thereto.
See ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Advances—Advances of Delinquent Monthly Debt Service Payments,’’ ‘‘—Required Appraisals’’ and ‘‘—Servicing Compensation and Payment of Expenses’’ in this prospectus supplement. See also ‘‘Description of the Governing Documents— Advances’’ in the accompanying base prospectus.

Removal of Underlying Mortgage Loans

A.     Repurchase Due to Breach of
Representation or Warranty		 As of the date of initial issuance of the offered certificates, and subject to certain exceptions, we will make with respect to each underlying mortgage loan contributed by Lehman Brothers Holdings Inc. or any of our other affiliates and each of UBS Real Estate Investments Inc. and KeyBank National Association will make with respect to each underlying mortgage loan contributed by that mortgage loan seller, the representations and warranties generally described under ‘‘Description of the Mortgage Pool—Representations and Warranties’’ in

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this prospectus supplement. If there exists a material uncured breach of any of those representations and warranties, or if there exists a material uncured document omission with respect to any underlying mortgage loan, as discussed under ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans’’ below in this prospectus supplement, then we, in the case of a mortgage loan contributed by Lehman Brothers Holdings Inc. or any of our other affiliates, and each of UBS Real Estate Investments Inc. and KeyBank National Association, in the case of a mortgage loan contributed by it, may be required, under certain circumstances, to repurchase the affected mortgage loan at a price generally equal to the sum of (a) the unpaid principal balance of that mortgage loan at the time of purchase, (b) all unpaid interest, other than default interest, due with respect to that mortgage loan through the due date in the collection period of purchase, (c) all unreimbursed servicing advances with respect to that mortgage loan, (d) all unpaid interest accrued on advances made with respect to that mortgage loan, and (e) certain other amounts payable under the series 2006-C7 pooling and servicing agreement.
Notwithstanding the foregoing, the obligation to repurchase an underlying mortgage loan only arises if Lehman Brothers Holdings Inc (or an affiliate), UBS Real Estate Investments Inc. or KeyBank National Association, as applicable, are unable to cure the subject material breach or material document defect, as the case may be, and do not exercise their option to instead pay an amount equal to the loss of value directly attributed to such material breach or material document omission (which amount may not cover the amount of actual losses and expenses incurred by the trust). The foregoing obligation to cure, pay loss of value or repurchase is further contingent on (i) us, UBS Real Estate Investments Inc. or KeyBank National Association being notified of the subject missing document or breach and (ii) either (a) we, in the case of an underlying mortgage loan contributed by Lehman Brothers Holdings Inc. or any of our other affiliates, or UBS Real Estate Investments Inc. or KeyBank National Association, in the case of an underlying mortgage loan contributed by it, agreeing that, or (b) an arbitration panel making a binding determination that, a material breach or a material document omission, as the case may be, exists.
See ‘‘Description of the Mortgage Pool—Representations and Warranties,’’ ‘‘—Assignment of the Underlying Mortgage Loans’’ and ‘‘—Cures and Repurchases’’ in this prospectus supplement.
B.    Fair Value Option Any single certificateholder or group of certificateholders with a majority interest in the series 2006-C7 controlling class, the special servicer and any assignees thereof will have the option to purchase any specially serviced mortgage loan in the trust as to which a material default exists, at a price generally equal to the sum of (a) the outstanding principal balance of that mortgage loan, (b) all accrued and unpaid interest on that mortgage loan, other than default interest, (c) all unreimbursed servicing advances with respect to that mortgage loan, (d) all unpaid interest accrued on advances made by the master servicer, the special servicer and/or the trustee with respect to that mortgage loan, and (e) any other amounts payable under the series 2006-C7 pooling and servicing agreement.
The special servicer is required to accept the first offer by a holder of the purchase option above that is at least equal to that purchase price.

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If none of the purchase option holders exercises its option to purchase any specially serviced mortgage loan in the trust as to which a material default exists, as described above in this ‘‘—Fair Value Option’’ section, then each holder of the purchase option will also have the option to purchase that specially serviced mortgage loan at a price equal to the fair value of that loan. See ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Fair Value Option’’ in this prospectus supplement.
C.    Other Purchase Options The following third parties or their designees will have the option to purchase one or more underlying mortgage loans out of the trust, generally after such mortgage loan has become a specially serviced mortgage loan:
• with respect to each underlying mortgage loan that is part of a loan combination, pursuant to a related co-lender or similar agreement, the holder of a particular non-trust mortgage loan in the subject loan combination, or a group of holders of non-trust mortgage loans in the subject loan combination (acting together), may be granted the right to purchase the subject underlying mortgage loan, in each case under the circumstances described under ‘‘Description of the Mortgage Pool—Loan Combinations;’’ and
• a mezzanine lender with respect to the borrower under an underlying mortgage loan may be entitled to purchase that mortgage loan from the trust fund upon the occurrence of a default thereunder or upon the transfer thereof to special servicing, pursuant to a purchase right as set forth in the related intercreditor agreement (see, for example, the discussion regarding several underlying mortgage loans with related mezzanine loans under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans’’ and ‘‘Description of the Mortgage Pool—Additional Loan and Property Information—Other Financing’’ in this prospectus supplement).

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Additional Statistical Information
A.    General Characteristics The mortgage pool, loan group 1 and loan group 2 will have the following general characteristics as of the cut-off date:

  Mortgage Pool Loan Group 1 Loan Group 2
Total cut-off date principal balance $3,019,658,540 $2,592,035,525 $427,623,015
Number of mortgage loans 184 141 43
Number of mortgaged real properties 420 349 71
Maximum cut-off date principal balance $475,000,000 $475,000,000 $46,550,000
Minimum cut-off date principal balance $870,000 $870,000 $1,200,000
Average cut-off date principal balance $16,411,188 $18,383,231 $9,944,721
Maximum mortgage interest rate 6.6525% 6.6525% 6.5100%
Minimum mortgage interest rate 5.2000% 5.2000% 5.8300%
Weighted average mortgage interest rate 6.1045% 6.1052% 6.1003%
Maximum original term to maturity or anticipated repayment date 180 months 180 months 120 months
Minimum original term to maturity or anticipated repayment date 60 months 60 months 60 months
Weighted average original term to
Maturity or anticipated repayment date		 106 months 106 months 105 months
Maximum remaining term to maturity or anticipated repayment date 180 months 180 months 120 months
Minimum remaining term to maturity or anticipated repayment date 56 months 57 months 56 months
Weighted average remaining term to
Maturity or anticipated repayment date		 105 months 105 months 104 months
Weighted average underwritten debt
service coverage ratio		 1.57x 1.63x 1.23x
Weighted average cut-off date
underwritten debt service coverage
ratio		 1.68x 1.74x 1.31x
Weighted average cut-off date
loan-to-value ratio		 63.5% 61.5% 75.6%
In reviewing the foregoing table, please note that:
• The initial mortgage pool balance, the initial loan group 1 balance and the initial loan group 2 balance are each subject to a permitted variance of plus or minus 5%.
• Except as described below in the second succeeding bullet, the underwritten debt service coverage ratio for any mortgage loan that is to be included in the trust is equal to the underwritten annual net cash flow for the related mortgaged real property, divided by the product of 12 times the monthly debt service payment due in respect of that underlying mortgage loan on the first due date following the cut-off date or, if that mortgage loan is currently in an interest-only period, on the first due date after the commencement of the scheduled amortization.
• Except as described in the following bullet, the cut-off date loan-to-value ratio for any mortgage loan to be included in the trust is equal to its cut-off date principal balance, divided by the estimated value of the related mortgaged real property as set forth in a related third-party appraisal dated as specified on Annex A-1 to this prospectus supplement.
• The exceptions to the foregoing calculations of underwritten debt service coverage ratio and cut-off date loan-to-value ratio are as follows:
(1) in the case of an underlying mortgage loan that provides for payments of interest only until the related stated maturity date or anticipated

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repayment date, the calculation of underwritten debt service coverage ratio is based upon the actual interest-only payments (calculated in accordance with the related loan documents) that will be due in respect of the subject mortgage loan during the 12-month period following the cut-off date;
(2) in the case of an underlying mortgage loan that is part of a loan combination (as set forth under ‘‘Description of the Mortgage Pool— Loan Combinations’’ in this prospectus supplement), the underwritten debt service coverage ratio and the cut-off date loan-to-value ratio are, in general, each calculated based on the entire subject loan combination, excluding any non-trust mortgage loans in the subject loan combination that are subordinate to the related underlying mortgage loan in such loan combination; and
(3) in the case of each underlying mortgage loan that requires the related borrower to make additional monthly amortization payments solely to the extent available from excess cash flow after a certain date, the calculation of underwritten debt service coverage ratio is based upon interest only payments (calculated in accordance with the related loan documents) that will be due in respect of the subject mortgage loan during the 12-month period following the cut-off date.
• Cut-off date underwritten debt service coverage ratio for any mortgage loan that is to be included in the trust is equal to the underwritten debt service coverage ratio for that mortgage loan, calculated as described above, except that for any mortgage loan that provides for payments of interest only for a specified period prior to the maturity date, the cut-off date underwritten debt service coverage ratio is equal to the underwritten annual net cash flow for the related mortgaged real property, divided by the sum of the actual interest-only payments (calculated in accordance with the related loan documents) that will be due in respect of that underlying mortgage loan during the 12-month period following the cut-off date or, in the case of an underlying mortgage loan that is part of a loan combination, that will be due in respect of all of the mortgage loans in the subject loan combination.
• In the case of many of the mortgage loans that we intend to include in the trust, the calculation of underwritten annual net cash flow for the related mortgaged real property or properties—which is, in turn, used in the calculation of underwritten debt service coverage ratios—was based on certain assumptions regarding projected rental income and/or occupancy, as described under the definitions of Net Cash Flow, Occupancy Percentage and Underwritten Debt Service Coverage Ratio, respectively, in the Glossary to this prospectus supplement.

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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:

State Number of
Properties		 % of Initial
Mortgage Pool
Balance
New York 40
26.8%
Georgia 12
9.5%
Texas 64
8.9%
Virginia 8
8.6%
Florida 19
6.1%
California 18
5.6%
Pennsylvania 18
3.6%
Michigan 26
3.4%
Arizona 18
3.3%
The remaining mortgaged real properties with respect to the mortgage pool are located throughout 32 other states. No more than 2.8% of the initial mortgage pool balance is secured by mortgaged real properties located in any of these other states.
C.    Property Types The table below shows the number of, and percentage of the initial mortgage pool balance secured by, mortgaged real properties predominantly operated for each indicated purpose:

Property Type Number of
Properties		 % of Initial
Mortgage Pool
Balance
Office 72
49.7
%
Retail 161
21.6
%
Anchored Retail 131
13.9
%
Unanchored Retail 27
5.7
%
Regional Mall 3
2.0
%
Multifamily(1) 72
14.3
%
Healthcare 82
8.3
%
Hotel 11
2.4
%
Mixed Use 6
1.8
%
Self Storage 12
1.4
%
Industrial/Warehouse 4
0.6
%
(1) ‘‘Multifamily’’ includes mobile home park properties securing 2.9% of the initial mortgage pool balance.
D.    Encumbered Interests The table below shows the number of mortgage loans and the percentage of the initial mortgage pool balance represented thereby, that are secured by mortgaged real properties for which the whole or predominant encumbered interest is as indicated:

Encumbered Interest In the Mortgaged Real Property Number of
Mortgage Loans		 % of Initial
Mortgage Pool
Balance
Fee Simple 178
95.1%
Fee Simple/Leasehold 4
4.6%
Leasehold 2
0.2%

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It should be noted that each mortgage loan secured by overlapping fee and leasehold interests or by a predominant fee interest and a relatively minor leasehold interest, is presented as being secured by a fee simple interest in this prospectus supplement and is therefore included within the category referred to as ‘‘fee simple’’ in the chart above.
E.     Significant Underlying Mortgage
Loans		 The ten (10) largest mortgage loans and/or groups of cross-collateralized mortgage loans that we intend to include in the trust collectively represent 54.1% of the initial mortgage pool balance. For a discussion of those ten (10) largest underlying mortgage loans and/or groups of cross-collateralized underlying mortgage loans, see ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans’’ in this prospectus supplement.

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 as three real estate mortgage investment conduits, or REMICs, under sections 860A through 860G of the Internal Revenue Code of 1986, as amended, designated as REMIC I, REMIC II and REMIC III, respectively. The foregoing REMICs will exclude collections of post-anticipated repayment date interest with respect to any underlying mortgage loan that remains outstanding past its anticipated repayment date, if applicable. Any assets not included in a REMIC will constitute one or more grantor trusts for U.S. federal income tax purposes.
The offered certificates will be treated as regular interests in REMIC III. 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(s) referred to above.
The class X-CP certificates will, and the other classes of the offered certificates will not, be issued with more than a de minimis amount of original issue discount. Certain classes of the offered certificates may, in some cases, be treated as having been issued at a premium. If you own an offered certificate issued with original issue discount, you may have to report original issue discount income and be subject to a tax on this income before you receive a corresponding cash payment. When determining the rate of accrual of original issue discount, market discount and premium, if any, with respect to the series 2006-C7 certificates for federal income tax purposes, the prepayment assumption used will be that following any date of determination:
• each underlying mortgage loan with an anticipated repayment date will be paid in full on that date;
• no mortgage loan in the trust will otherwise be prepaid prior to maturity, and
• there will be no extension of maturity for any mortgage loan in the trust.
For a more detailed discussion of the federal income tax aspects of investing in the offered certificates, see ‘‘Federal Income Tax Consequences’’ in each of this prospectus supplement and the accompanying base prospectus.

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ERISA We anticipate 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 the Employee Retirement Income Security Act of 1974, as amended, or
• section 4975 of the Internal Revenue Code of 1986, as amended, will be able to invest in the offered certificates without giving rise to a prohibited transaction.
This is based upon an individual prohibited transaction exemption granted to a predecessor to Lehman Brothers 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 of 1986, as amended, you are encouraged to review carefully with your legal advisors 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 of 1986, as amended. See ‘‘ERISA Considerations’’ in this prospectus supplement and in the accompanying base prospectus.
Legal Investment The offered certificates will not be mortgage related securities within the meaning of the Secondary Mortgage Market Enhancement Act of 1984, as amended. All institutions whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities are encouraged to consult with their own legal advisors in determining whether and to what extent the offered certificates will be legal investments for them. See ‘‘Legal Investment’’ in this prospectus supplement and in the accompanying base prospectus.
Investment Considerations The rate and timing of payments and other collections of principal on or with respect to the underlying mortgage loans may affect the yield to maturity on your offered certificates. In the case of any offered certificate purchased at a discount from its principal balance, 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 any offered certificate purchased at a premium from its principal balance, 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.
In addition, if you are contemplating the purchase of class X-CP certificates, you should be aware that—
• the yield to maturity on the class X-CP certificates will be highly sensitive to the rate and timing of any principal prepayments and/or other early liquidations of the underlying mortgage loans;
• 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 with respect to the class X-CP certificates, and
• an extremely rapid rate of prepayments and/or other liquidations of the underlying mortgage loans could result in a complete or partial loss of your initial investment with respect to the class X-CP certificates.

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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 underlying mortgage loans with relatively lower net mortgage interest rates.
In addition, the pass-through rate for, and yield on, the class X-CP certificates will vary with changes in the relative sizes of the respective components that make up the related total notional amount of that class, with each of those components consisting of 30%, or a lesser designated portion, of the total principal balance of a class of series 2006-C7 principal balance certificates.
Holders of the class A-1, A-2, A-AB and A-3 certificates will be affected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 1 and, in the absence of significant losses on the mortgage pool, should be largely unaffected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 2. Conversely, holders of the class A-1A certificates will be affected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 2 and, only after the retirement of the class A-1, A-2, A-AB and A-3 certificates or in connection with significant losses on the mortgage pool, will be affected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 1.
See ‘‘Yield and Maturity Considerations’’ in this prospectus supplement and in the accompanying base prospectus.

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RISK FACTORS

The offered certificates are not suitable investments for all investors. You should not purchase any offered certificates unless you understand and are able to bear the risks associated with those certificates.

The offered certificates are complex securities and it is important that you possess, either alone or together with an investment advisor, the expertise necessary to evaluate the information contained in this prospectus supplement and the accompanying base prospectus in the context of your financial situation.

You should consider the following factors, as well as those set forth under ‘‘Risk Factors’’ in the accompanying base prospectus, in deciding whether to purchase any offered certificates. The ‘‘Risk Factors’’ section in the accompanying base prospectus includes a number of general risks associated with making an investment in the offered certificates.

The Class A-M, A-J, B, C, D, E and F Certificates Are Subordinate to, and Are Therefore Riskier than, the Class A-1, A-2, A-AB, A-3 and A-1A Certificates

If you purchase class A-M, A-J, B, C, D, E and F certificates, then your offered certificates will provide credit support to other classes of series 2006-C7 certificates, including the A-1, A-2, A-AB, A-3, A-1A, X-CP, X-CL and X-W classes. As a result, you will receive payments after, and must bear the effects of losses on the underlying mortgage loans before, the holders of those other classes of series 2006-C7 certificates.

When making an investment decision, you should consider, among other things—

•  the payment priorities of the respective classes of the series 2006-C7 certificates,
•  the order in which the principal balances of the respective classes of the series 2006-C7 certificates with balances will be reduced in connection with losses and default-related shortfalls, and
•  the characteristics and quality of the mortgage loans in the trust.

See ‘‘Description of the Mortgage Pool’’ and ‘‘Description of the Offered Certificates—Payments’’ and ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ in this prospectus supplement. See also ‘‘Risk Factors—The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable,’’ ‘‘—Payments on the Offered Certificates Will Be Made Solely from the Limited Assets of the Related Trust, and Those Assets May Be Insufficient to Make All Required Payments on Those Certificates’’ and ‘‘—Any Credit Support for Your Offered Certificates May Be Insufficient to Protect You Against All Potential Losses’’ in the accompanying base prospectus.

The Offered Certificates Have Uncertain Yields to Maturity

The yields on your offered certificates will depend on—

•  the price you paid for your offered certificates, and
•  the rate, timing and amount of payments on your offered certificates.

The rate, timing and amount of payments on your offered certificates will depend on:

(a)  the pass-through rate for, and other payment terms of, your offered certificates;
(b)  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;
(c)  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;
(d)  the rate, timing, severity and allocation of other shortfalls and expenses that reduce amounts available for payment on your offered certificates;
(e)  the collection and payment of prepayment premiums and yield maintenance charges with respect to the underlying mortgage loans or, in some cases, a particular group of underlying mortgage loans; and
(f)  servicing decisions with respect to the underlying mortgage loans or, in some cases, a particular group of underlying mortgage loans.

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In general, these factors cannot be predicted with any certainty. Accordingly, you may find it difficult to determine the effect that these factors might have on the yield to maturity of your offered certificates.

In the absence of significant losses on the mortgage pool, holders of the class A-1, A-2, A-AB and A-3 certificates should be concerned with the factors described in clauses (b) through (f) of the preceding paragraph primarily insofar as they relate to the underlying mortgage loans in loan group 1. Until the class A-1, A-2, A-AB and A-3 certificates are retired, holders of the class A-1A certificates should, in the absence of significant losses on the mortgage pool, be concerned with the factors described in clauses (b) through (f) of the preceding paragraph primarily insofar are they relate to the underlying mortgage loans in loan group 2.

See ‘‘Description of the Mortgage Pool,’’ ‘‘The Series 2006-C7 Pooling and Servicing Agreement,’’ ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination,’’ ‘‘Description of the Offered Certificate—Payments’’ and ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ and ‘‘Yield and Maturity Considerations’’ in this prospectus supplement. See also ‘‘Risk Factors—The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable’’ and ‘‘Yield and Maturity Considerations’’ in the accompanying base prospectus.

The Investment Performance of Your Offered Certificates May Vary Materially and Adversely from Your Expectations Because the Rate of Prepayments and Other Unscheduled Collections of Principal on the Underlying Mortgage Loans Is Faster or Slower than You Anticipated

If you purchase any offered certificate at a premium from its principal balance, and if payments and other collections of principal on the mortgage loans in the trust 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 any offered certificate at a discount from its principal balance, and if payments and other collections of principal on the mortgage loans in the trust 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-AB and A-3 certificates will be affected by the rate of payments and other collections of principal on the underlying mortgage loans in loan group 1 and, in the absence of significant losses on the mortgage pool, should be largely unaffected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 2. Conversely, holders of the class A-1A certificates will be affected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 2 and, only after the retirement of the class A-1, A-2, A-AB and A-3 certificates or in connection with significant losses on the mortgage pool, will be affected by the rate and timing of payments and other collections of principal on the underlying mortgage loans in loan group 1.

If you purchase a class X-CP certificate, your yield to maturity will be particularly sensitive to the rate and timing of principal payments on the underlying mortgage loans. Depending on the timing thereof, a payment of principal in reduction of the total principal balance of the class A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G and H certificates may result in a reduction in the total notional amount of the class X-CP certificates. Accordingly, if principal payments on the underlying mortgage loans occur at a rate faster than that assumed at the time of purchase, then your actual yield to maturity with respect to the class X-CP certificates may be lower than that assumed at the time of purchase. Your yield to maturity could also be adversely affected by—

•  the repurchase of any underlying mortgage loan in connection with a material breach of representation and warranty or a material document omission, all as described under ‘‘Description of the Mortgage Pool—Cures and Repurchases’’ in this prospectus supplement,
•  the sale of defaulted underlying mortgage loans out of the trust in accordance with a fair value or other purchase option, and
•  the termination of the trust, as described under ‘‘Description of the Offered Certificates—Termination’’ in this prospectus supplement.

Prior to investing in the class X-CP certificates, you should fully consider the associated risks, including the risk that an extremely rapid rate of amortization, prepayment or other early liquidation of the underlying mortgage loans could result in your failure to fully recover your initial investment. The ratings on the class X-CP certificates do not address whether a purchaser of those certificates would be able to recover its initial investment in them.

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You should consider that prepayment premiums and yield maintenance charges may not be collected in all circumstances. Furthermore, even if a prepayment premium or yield maintenance charge is collected and payable on your offered certificates, it may not be sufficient to offset fully any loss in yield on your offered certificates resulting from the corresponding prepayment.

The yield on offered certificates with a variable or capped pass-through rate 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. In addition, the pass-through rate for, and yield on, the class X-CP certificates will vary with changes in the relative sizes of the respective components that make up the related total notional amount of that class, with each of those components consisting of 30%, or a lesser designated portion, of the total principal balance of a class of series 2006-C7 principal balance certificates.

The Interests of the Series 2006-C7 Controlling Class Certificateholders May Be in Conflict with the Interests of the Offered Certificateholders

The holders or beneficial owners of series 2006-C7 certificates representing a majority interest in the controlling class of series 2006-C7 certificates will be entitled to: (a) appoint a representative having the rights and powers described and/or referred to under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ in this prospectus supplement; (b) replace the special servicer under the series 2006-C7 pooling and servicing agreement, subject to satisfaction of the conditions described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Replacement of the Special Servicer’’ in this prospectus supplement; and (c) replace the special servicer with respect to the Triangle Town Center loan combination, subject to satisfaction of conditions comparable to those applicable to the replacement, without cause, of the special servicer under the series 2006-C7 pooling and servicing agreement. Among other things, the series 2006-C7 controlling class representative may direct the special servicer under the series 2006-C7 pooling and servicing agreement or other applicable servicing agreement to take, or to refrain from taking, certain actions with respect to the servicing and/or administration of any specially serviced mortgage loans and foreclosure properties in the trust (other than the 1211 Avenue of the Americas underlying mortgage loan) that the series 2006-C7 controlling class representative may consider advisable, subject to any rights in that regard that the related non-trust mortgage loan noteholder(s) may have with respect to an underlying mortgage loan that is part of a loan combination.

In the absence of significant losses on the underlying mortgage loans, the series 2006-C7 controlling class will be a non-offered class of series 2006-C7 certificates. The series 2006-C7 controlling class certificateholders are therefore likely to have interests that conflict with those of the holders of the offered certificates. You should expect that the series 2006-C7 controlling class representative will exercise its rights and powers on behalf of the series 2006-C7 controlling class certificateholders, and it will not be liable to any other class of series 2006-C7 certificateholders for so doing.

The Absence or Inadequacy of Insurance Coverage on the Mortgaged Properties May Adversely Affect Payments on Your Certificates

After the terrorist attacks of September 11, 2001, the cost of insurance coverage for acts of terrorism increased and the availability of such insurance decreased. In response to this situation, Congress enacted the Terrorism Risk Insurance Act of 2002, which was amended and extended by the Terrorism Risk Insurance Extension Act of 2005, signed into law by President Bush on December 22, 2005. The Terrorism Risk Insurance Extension Act of 2005 requires that qualifying insurers offer terrorism insurance coverage in all property and casualty insurance policies on terms not materially different than terms applicable to other losses. The federal government covers 90% (85% for acts of terrorism occurring in 2007) of the losses from covered certified acts of terrorism on commercial risks in the United States only, in excess of a specified deductible amount calculated as a percentage of an affiliated insurance group’s prior year premiums on commercial lines policies covering risks in the United States. This specified deductible amount is 17.5% of such premiums for losses occurring in 2006, and 20% of such premiums for losses occurring in 2007. Further, to trigger coverage under the Terrorism Risk Insurance Extension Act of 2005, the aggregate industry property and casualty insurance losses resulting from an act of terrorism must exceed $5 million prior to April 2006, $50 million from April 2006 through December 2006, and $100 million for acts of terrorism occurring in 2007. The Terrorism Risk Insurance Extension Act of 2005 now excludes coverage for commercial auto, burglary and theft, surety, professional liability and farm owners’ multiperil. The Terrorism Risk Insurance Extension Act of 2005 will expire on December 31, 2007.

The Terrorism Risk Insurance Extension Act of 2005 applies only to losses resulting from attacks that have been committed by individuals on behalf of a foreign person or foreign interest, and does not cover acts of purely domestic

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terrorism. Further, any such attack must be certified as an ‘‘act of terrorism’’ by the federal government, which decision is not subject to judicial review. As a result, insurers may continue to try to exclude from coverage under their policies losses resulting from terrorist acts not covered by the Terrorism Risk Insurance Extension Act of 2005. Moreover, the Terrorism Risk Insurance Extension Act of 2005’s deductible and copayment provisions still leave insurers with high potential exposure for terrorism-related claims. Because nothing in the act prevents an insurer from raising premium rates on policyholders to cover potential losses, or from obtaining reinsurance coverage to offset its increased liability, the cost of premiums for such terrorism insurance coverage is still expected to be high.

With respect to most of the mortgage loans that we intend to include in the trust, the related loan documents generally provide that either (a) the borrowers are required to maintain full or partial insurance coverage for property damage to the related mortgaged real property against certain acts of terrorism (except that, in certain instances, including in the case of several of the mortgage loans described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans’’ in this prospectus supplement, the requirement to obtain such insurance coverage may be subject to the commercial availability of that coverage, certain limitations with respect to the cost thereof and/or whether such hazards are at the time commonly insured against for property similar to such mortgaged real properties and located in or around the region in which such mortgaged real property is located), (b) the borrowers are required to provide such additional insurance coverage as lender may reasonably require to protect its interests or to cover such hazards as are commonly insured against for similarly situated properties, (c) a credit-rated tenant is obligated to restore the mortgaged real property in the event of a casualty, or (d) a principal of the borrower has agreed to be responsible for losses resulting from terrorist acts which are not otherwise covered by insurance. If the related mortgage loan documents do not expressly require insurance against acts of terrorism, but permit the lender 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.

In the case of some of the mortgaged real properties securing mortgage loans that we intend to include in the trust, the insurance covering any of such mortgaged real properties for acts of terrorism may be provided through a blanket policy that also covers properties unrelated to the trust fund. Acts of terrorism at those other properties could exhaust coverage under the blanket policy. No representation is made as to the adequacy of any such insurance coverage provided under a blanket policy, in light of the fact that multiple properties are covered by that policy.

If a borrower is required to maintain insurance for terrorist or similar acts that was not previously maintained, 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 property. Further, if the federal insurance back-stop program referred to above is not extended or renewed, premiums for terrorism insurance coverage will likely increase and/or the terms of such insurance may be materially amended to enlarge stated exclusions or to otherwise effectively decrease the scope of coverage available. In addition, in the event that any mortgaged real property securing an underlying mortgage loan sustains damage as a result of an uninsured terrorist or similar act, such damaged mortgaged real property may not generate adequate cash flow to pay, and/or provide adequate collateral to satisfy, all amounts owing under such mortgage loan, which could result in a default on that mortgage loan and, potentially, losses on some classes of the series 2006-C7 certificates.

Repayment of the Underlying Mortgage Loans Depends on the Operation of the Mortgaged Real Properties

The underlying mortgage loans are secured by mortgage liens on fee and/or leasehold interests in the following types of real property:

•  office
•  retail
•  multifamily
•  healthcare
•  manufactured housing
•  hotel
•  mixed use
•  self-storage; and
•  industrial/warehouse

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The risks associated with lending on these types of real properties are inherently different from those associated with lending on the security of single-family residential properties. This is because, among other reasons, repayment of each of the underlying mortgage loans is dependent on—

•  the successful operation and value of the related mortgaged real property, and
•  the related borrower’s ability to refinance the mortgage loan or sell the related mortgaged real property.

See ‘‘Risk Factors—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance’’ and ‘‘—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks’’ in the accompanying base prospectus.

Risks Associated with Condominium Ownership

With respect to two (2) mortgage loans that we intend to include in the trust, secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Extendicare Portfolio—Cedar Springs Health & Rehab Center, Cedarburg, WI, Extendicare Portfolio—River’s Bend Health & Rehab, Manitowoc, WI, Government Property Advisors Portfolio—5210 Perry Robinson Circle and Government Property Advisors Portfolio—1101 15th Street North, which properties have allocated loan amounts of $7,845,934, $5,069,289, $3,360,000 and $2,140,000 respectively, those mortgaged real properties consist of the borrower’s fee or leasehold interest in one or more commercial condominium units. See ‘‘Risk Factors—Lending on Condominium Units Creates Risks for Lenders That Are Not Present When Lending on Non-Condominiums’’ in the accompanying base prospectus, for risks related to lending on a mortgage loan secured by an interest in one or more condominium unit(s).

The Mortgaged Real Property Will Be the Sole Asset Available to Satisfy the Amounts Owing Under an Underlying Mortgage Loan in the Event of Default

All of the mortgage loans that we intend to include in the trust are or should be considered nonrecourse loans. You should anticipate that, if the related borrower defaults on any of the underlying mortgage loans, only the mortgaged real property and any additional collateral for the relevant loan, such as escrows or letters of credit, but none of the other assets of the borrower, is available to satisfy the debt. Even if the related loan documents permit recourse to the borrower or a guarantor, the trust may not be able to ultimately collect the amount due under a defaulted mortgage loan or under a guaranty. None of the mortgage loans are insured or guaranteed by any governmental agency or instrumentality or by any private mortgage insurer. See ‘‘Risk Factors—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—Most of the Mortgage Loans Underlying Your Offered Certificates Will Be Nonrecourse’’ in the accompanying base prospectus.

In Some Cases, Payments on an Underlying Mortgage Loan Are Dependent on a Single Tenant or on One or a Few Major Tenants at the Related Mortgaged Real Property

In the case of 210 mortgaged real properties, securing 53.7% of the initial mortgage pool balance and 62.6% of the initial loan group 1 balance, respectively, the related borrower has leased the property to at least one tenant that occupies 25% or more of the particular property. In the case of 144 of those 210 properties, securing 10.5% of the initial mortgage pool balance and 12.2% of the initial loan group 1 balance, respectively, the related borrower has leased the particular property to a single tenant that occupies 90% or more of the property. Accordingly, the full and timely payment of each of the related underlying mortgage loans is highly dependent on the continued operation of one or more major tenants, which, in some cases, is the sole tenant at the mortgaged real property. See ‘‘Risk Factors—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—The Successful Operation of a Multifamily or Commercial Property Depends on Tenants,’’ ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—Dependence on a Single Tenant or a Small Number of Tenants Makes a Property Riskier Collateral’’ and ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—Tenant Bankruptcy Adversely Affects Property Performance’’ in the accompanying base prospectus.

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Five Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on the Respective Borrower’s Interests in Each of the Following Property Types—Office, Retail, Multifamily and Healthcare

Seventy-two (72) of the mortgaged real properties, securing 49.7% of the initial mortgage pool balance and 57.8% of the initial loan group 1 balance, respectively, are primarily used for office purposes. Some of those office properties are heavily dependent on one or a few major tenants that lease a substantial portion of the related mortgaged real property. A number of factors may adversely affect the value and successful operation of an office property as discussed under ‘‘Risk Factors— The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks—Office Properties’’ in the accompanying base prospectus.

One hundred-sixty-one (161) of the mortgaged real properties, securing 21.6% of the initial mortgage pool balance and 25.2% of the initial loan group 1 balance, respectively, are primarily used for retail purposes. We consider 134 of the subject retail properties, securing 15.9% of the initial mortgage pool balance and 18.5% of the initial loan group 1 balance, respectively, to be anchored, including shadow anchored; and 27 of the subject retail properties, securing 5.7% of the initial mortgage pool balance and 6.6% of the initial loan group 1 balance, respectively, to be unanchored. A number of factors may adversely affect the value and successful operation of a retail property as discussed under ‘‘Risk Factors—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks—Retail Properties’’ in the accompanying base prospectus.

Seventy-two (72) of the mortgaged real properties, securing 14.3% of the initial mortgage pool balance, 0.2% of the initial loan group 1 balance and 100.0% of the initial loan group 2 balance respectively, are primarily used for multifamily rental purposes (including mobile home park properties securing 2.9% of the initial mortgage pool balance). Some of those multifamily properties are subject to rent control laws. A number of factors may adversely affect the value and successful operation of a multifamily property as discussed under ‘‘Risk Factors—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks— Multifamily Rental Properties’’ in the accompanying base prospectus.

Eighty-two (82) of the mortgaged real properties, collectively securing 8.3% of the initial mortgage pool balance and 9.6% of the initial loan group 1 balance, respectively, are primarily used for healthcare purposes. A number of factors may adversely affect the value and successful operation of a healthcare property as discussed under ‘‘Risk Factors—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks—Health Care-Related Properties’’ in the accompanying base prospectus.

In general, the inclusion in the trust of a significant concentration of mortgage loans that are secured by mortgage liens on a particular type of income-producing property makes the overall performance of the mortgage pool materially more dependent on the factors that affect the operations at and value of that property type. See ‘‘Risk Factors—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks’’ in the accompanying base prospectus.

Conflicting Rights of Tenants May Adversely Affect a Mortgaged Real Property

With respect to some of the mortgaged real properties operated for office, retail or other commercial use, different tenants may have rights of first offer, rights of first refusal or expansion rights with respect to the same space in the related improvements. There is a risk that a tenant who loses any such right in the event of a simultaneous exercise of another tenant’s right for the same space may have remedies under its lease due to such tenant’s inability to exercise such right. Several other leases of space at the related mortgaged real property contain exclusive use provisions which may become operative upon the granting of a currently operative exclusive use right to another tenant, and such exclusive use provisions may allow tenants benefiting therefrom to terminate their lease or take other remedial action in the event that another tenant’s operation violates such tenant’s exclusive use provision. In addition, certain leases of space at the related mortgaged real property contain co-tenancy provisions (which may permit a tenant to terminate its lease and/or to pay reduced rent) which could be triggered if certain tenants exercised their right to terminate their lease for breach of the exclusive use provisions. There are likely other underlying mortgage loans as to which tenants at the subject mortgaged real property have the foregoing rights. Finally, all of the tenants with respect to the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Government Property Advisors Portfolio, which properties secure an underlying mortgage loan representing 3.2% of the initial mortgage pool balance and 3.7% of the initial loan group 1 balance, are government entities and have the right to cancel their leases for lack of appropriations or after a specified date set forth in the related lease.

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Ten Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on Real Properties Located in New York and Five Percent or More of the Initial Mortgage Pool Balance Will Be Secured by Mortgage Liens on Real Properties Located in Each of Georgia, Texas, Virginia, Florida and California

The mortgaged real properties located in each of the following jurisdictions secure mortgage loans or allocated portions of mortgage loans that represent 5% or more of the initial mortgage pool balance:


Jurisdiction Number of
Properties		 % of Initial
Mortgage Pool
Balance
New York 40
26.8
%
Georgia 12
9.5
%
Texas 64
8.9
%
Virginia 8
8.6
%
Florida 19
6.1
%
California 18
5.6
%

The inclusion in the trust of a significant concentration of mortgage loans that are secured by mortgage liens on real properties located in a particular state or jurisdiction makes the overall performance of the mortgage pool materially more dependent on economic and other conditions or events in that jurisdiction. See ‘‘Risk Factors—Geographic Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss’’ in the accompanying base prospectus. The mortgaged real properties located in any given state or jurisdiction may be concentrated in one or more areas within that state. Annex A-1 to this prospectus supplement contains the address for each mortgaged real property.

Of the 40 Mortgaged Real Properties Located in the State of New York, two (2) of Those Properties, Representing 24.8% Percent of the Initial Mortgage Pool Balance, Will Be Secured by Mortgage Liens on Real Properties Located in the City of New York; The Performance of Those Properties Will be Materially Dependent on the Strength of the Manhattan Economy and Office Leasing Market

Two (2) of the mortgage loans that we intend to include in the trust, representing 24.8% of the initial mortgage pool balance, both of which are in loan group 1 and represent 28.9% of the initial loan group 1 balance are secured by mortgaged real properties located in the City of New York. The performance of those mortgaged real properties located in New York City will be dependent, perhaps to a material degree, on the strength of the Manhattan economy and office leasing market. This is true not only for office properties, but also for multifamily and retail properties, as those multifamily properties may provide housing to individuals that are employed in Manhattan and those retail properties may provide retail services to individuals and families employed in Manhattan. The Manhattan economy is dependent upon foreign and domestic businesses selecting New York City as the location in which to engage in trade, finance and business services. The level of economic growth in general and job growth in the foregoing sectors in particular will affect net absorption of office space and increases in office rental rates. The suburban New Jersey, New York and Connecticut markets could continue to compete for certain tenants with New York City. A weakening of the New York City office leasing market generally and the midtown New York City office leasing market in particular, may adversely affect the operation of some of the mortgaged real properties and lessen their market value. Conversely, a strong market could lead to increased building and increased competition for tenants. In either case, the resulting effect on the operations of any of the mortgaged real properties could adversely affect the amount and timing of payments on the related mortgage loans and consequently the amount and timing of distributions on the offered certificates.

The Mortgage Pool Will Include Material Concentrations of Balloon Loans and Loans with Anticipated Repayment Dates

One hundred seventy-five (175) of the mortgage loans that we intend to include in the trust, representing 98.1% of the initial mortgage pool balance, of which 132 mortgage loans are in loan group 1, representing 97.8% of the initial loan group 1 balance, and 43 mortgage loans are in loan group 2, representing 100.0% of the initial loan group 2 balance, respectively, are balloon loans. Fifty (50) of those balloon loans, representing 55.9% of the initial mortgage pool balance, of which 38 mortgage loans are in loan group 1, representing 57.5% of the initial loan group 1 balance, and 12 mortgage loans are in loan group 2, representing 46.2% of the initial loan group 2 balance, respectively, are interest-only balloon loans. In addition, nine (9) mortgage loans, representing 1.9% of the initial mortgage pool balance, all of which mortgage loans are in loan group 1 and represent 2.2% of the initial loan group 1 balance, provides material incentives for the related borrower to repay the loan

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by an anticipated repayment date prior to maturity. The ability of a borrower to make the required balloon payment on a balloon loan, or payment of the entire principal balance of an interest-only balloon loan, at maturity, and the ability of a borrower to repay a mortgage loan, on or before any related anticipated repayment date, in each case depends upon the borrower’s ability either to refinance the loan or to sell the mortgaged real property. 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 ability of a borrower to make the required balloon payment on a balloon loan, or payment of the entire principal balance of an interest-only balloon loan, at maturity depends upon the borrower’s ability either to refinance the loan or to sell the mortgaged real property. See ‘‘Description of the Mortgage Pool—Terms and Conditions of the Underlying Mortgage Loans’’ in this prospectus supplement and ‘‘Risk Factors—The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable—There Is an Increased Risk of Default Associated with Balloon Payments’’ in the accompanying base prospectus.

The Mortgage Pool Will Include Some Disproportionately Large Mortgage Loans

The inclusion in the mortgage pool of one or more loans that have outstanding principal balances that are substantially larger than the other mortgage loans in that pool can result in losses that are more severe, relative to the size of the mortgage pool, than would be the case if the total balance of the mortgage pool were distributed more evenly. The five (5) largest mortgage loans and/or groups of cross-collateralized mortgage loans to be included in the trust represent 41.0% of the initial mortgage pool balance, and the ten (10) largest mortgage loans and/or groups of cross-collateralized mortgage loans to be included in the trust represent 54.1% of the initial mortgage pool balance. It has been confirmed to us by S&P and/or Fitch, however, that four (4) of the ten (10) largest mortgage loans and/or groups of cross-collateralized mortgage loans to be included in the trust, representing 37.1% of the initial mortgage pool balance, each has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with investment grade-rated obligations. See ‘‘Description of the Mortgage Pool—General,’’ ‘‘—Cross-Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans with Affiliated Borrowers’’ and ‘‘—Significant Underlying Mortgage Loans’’ in this prospectus supplement and ‘‘Risk Factors—Loan Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss’’ in the accompanying base prospectus.

The Mortgage Pool Will Include Leasehold Mortgage Loans and Lending on a Leasehold Interest in Real Property is Riskier Than Lending on the Fee Interest in That Property

Six (6) underlying mortgage loans, representing 4.9% of the initial mortgage pool balance, of which five (5) mortgage loans are in loan group 1, representing 5.6% of the initial loan group 1 balance, and one (1) mortgage loan is in loan group 2, representing 0.6% of the initial loan group 2 balance, as identified on Annex A-1 under the heading ‘‘Ownership Interest’’ as leaseholds, are secured by a mortgage lien on the related borrower’s leasehold interest (but not by the underlying fee interest) in all or a material portion of the related mortgaged real property. Because of possible termination of the related lease, lending on a leasehold interest in a real property is riskier than lending on an actual ownership interest in that property notwithstanding the fact that a lender, such as the trustee on behalf of the trust, generally will have the right to cure defaults under the related lease. Furthermore, the terms of certain leases may require that insurance proceeds or condemnation awards be applied to restore the property or be paid, in whole or in part, to the lessor rather than be applied against the outstanding principal balance of the related mortgage loan. Finally, there can be no assurance that any of the leases securing an underlying mortgage loan contain all of the provisions that a lender may consider necessary or desirable to protect its interest as a lender with respect to a leasehold mortgage loan. See ‘‘Risk Factors— Lending on Ground Leases Creates Risks For Lenders That Are Not Present When Lending on an Actual Ownership Interest in a Real Property’’ and ‘‘Legal Aspects of Mortgage Loans—Foreclosure—Leasehold Considerations’’ in the accompanying base prospectus.

Many of the Mortgaged Real Properties Are Legal Nonconforming Uses or Legal Nonconforming Structures

Many of the mortgage loans are secured by a mortgage lien on a real property that is a legal nonconforming use or a legal nonconforming structure. This may impair the ability of the related borrower to restore the improvements on a mortgaged real property to its current form or use following a major casualty. In addition, in the case of one (1) mortgage loan that we intend to include in the trust, secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Winston Plaza, representing 0.1% of the initial mortgage pool balance and 0.1% of the initial loan group 1 balance, at the time the building was constructed, the then owner received a variance to satisfy the on-site parking requirements by obtaining 15 off-site parking spaces for use with the building. There is no evidence that the borrower satisfied

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the variance and the variance has now expired. Although the mortgage loan is full recourse to the borrower and sponsor with respect to any losses incurred by the lender as a result of this matter until the borrower has delivered evidence satisfactory to the lender that the property is in compliance with the zoning ordinance relating to parking, there can be no assurance that the borrower will remedy the deficiency or that the borrower or sponsor will have sufficient funds to reimburse the lender for any losses incurred with respect thereto. See ‘‘Description of the Mortgage Pool— Additional Loan and Property Information—Zoning and Building Code Compliance’’ in this prospectus supplement and ‘‘Risk Factors—Changes in Zoning Laws May Adversely Affect the Use or Value of a Real Property’’ in the accompanying base prospectus.

Some of the Mortgaged Real Properties May Not Comply with All Applicable Zoning Laws and/or Local Building Codes or with the Americans with Disabilities Act of 1990

Some of the mortgaged real properties securing mortgage loans that we intend to include in the trust may not comply with all applicable zoning or land-use laws and ordinances, with all applicable local building codes or with the Americans with Disabilities Act of 1990. Compliance, if required, can be expensive. Failure to comply could result in penalties and/or restrictions on the use of the subject mortgaged real property, in whole or in part. There can be no assurance that any of the mortgage loans that we intend to include in the trust do not have outstanding building code violations. See ‘‘Description of the Mortgage Pool—Additional Loan and Property Information—Zoning and Building Code Compliance’’ in this prospectus supplement and ‘‘Risk Factors—Compliance with the Americans with Disabilities Act of 1990 May Be Expensive’’ and ‘‘Legal Aspects of Mortgage Loans—Americans with Disabilities Act’’ in the accompanying base prospectus.

In the case of the 1211 Avenue of the Americas underlying mortgage loan, there are certain building code violations with respect to the elevators at the 1211 Avenue of the Americas mortgaged real property and a reserve was funded at origination, which included the amount of $3,282,283 to cover costs related to eliminating those violations and the costs of certain elevator renovations.

Further, some of the mortgaged real properties securing mortgage loans that we intend to include in the trust may comply currently with applicable zoning or land-use ordinances by virtue of certain contractual arrangements or agreements. However, if those contractual arrangements or agreements are breached or otherwise terminated, then the related mortgaged real property or properties may no longer be in compliance.

Multiple Mortgaged Real Properties Are Owned by the Same Borrower, Affiliated Borrowers or Borrowers with Related Principals or Are Occupied, in Whole or in Part, by the Same Tenant or Affiliated Tenants, Which Presents a Greater Risk to the Trust Fund in the Event of the Bankruptcy or Insolvency of Any Such Borrower or Tenant

Nineteen (19) separate groups of mortgage loans that we intend to include in the trust have borrowers that, in the case of each of those groups, are the same or under common control. The eight (8) largest of these separate groups represent 6.0%, 2.8%, 2.5%, 1.5%, 1.4%, 1.2%, 1.2%, and 1.0%, respectively, of the initial mortgage pool balance, See ‘‘Description of the Mortgage Pool—Cross-Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans with Affiliated Borrowers’’ in this prospectus supplement.

In addition, there are tenants who lease space at more than one mortgaged real property securing mortgage loans that we intend to include in the trust. Furthermore, there may be tenants that are related to or affiliated with a borrower and, like other contracts with affiliates, leases with tenants who are affiliates of the landlord may not have been negotiated on an arm’s-length basis and may contain terms more favorable to the affiliate tenant than might be available to tenants unrelated to the borrower.

The bankruptcy or insolvency of, or other financial problems with respect to, any borrower or tenant that is, directly or through affiliation, associated with two or more of the mortgaged real properties securing the underlying mortgage loans could have an adverse effect on all of those properties and on the ability of those properties to produce sufficient cash flow to make required payments on the related mortgage loans in the trust. See ‘‘Risk Factors—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance— Tenant Bankruptcy Adversely Affects Property Performance,’’ ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—Borrower Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss’’ and ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance—Borrower Bankruptcy Proceedings Can Delay and Impair Recovery on a Mortgage Loan Underlying Your Offered Certificates’’ in the accompanying base prospectus.

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Some of the Mortgaged Real Properties Are or May Be Encumbered by Additional Debt and the Ownership Interests in Some Borrowers Have Been or May Be Pledged to Secure Debt Which, in Either Case, May Reduce the Cash Flow Available to the Subject Mortgaged Real Property

Six (6) mortgage loans that we intend to include in the trust, which mortgage loans collectively represent 22.8% of the initial mortgage pool balance, 26.4% of the initial loan group 1 balance and 1.2% of the initial loan group 2 balance, are each part of a loan combination that includes one or more additional mortgage loans—not included in the trust—that are secured by the same mortgage instrument(s) encumbering the same mortgaged real property or properties, as applicable, as is the subject underlying mortgage loan. With respect to the Triangle Town Center Subordinate Tranche Mortgage Loan, such additional mortgage loans are senior to the Triangle Town Center Subordinate Tranche Mortgage Loan. We provide a more detailed discussion of these loan combinations under ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement, and we have included a table under ‘‘Description of the Mortgage Pool—Loan Combinations—General’’ that identifies each underlying mortgage loan that is part of a loan combination. See ‘‘With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One (1) or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests’’ in the accompanying base prospectus.

One or more co-lender or similar agreements have been executed and delivered with respect to each of the loan combinations referred to in the prior paragraph. However, some provisions contained in a related co-lender, intercreditor or similar agreement restricting another lender’s actions may not be enforceable. If, in the event of the related borrower’s bankruptcy, a court refuses to enforce certain restrictions against another lender, such as provisions whereby such other lender has agreed not to take direct actions with respect to the related debt, including any actions relating to the bankruptcy of the related borrower, or not to vote a mortgagee’s claim with respect to a bankruptcy proceeding, there could be resulting delays in the trustee’s ability to recover with respect to the related borrower. See ‘‘Risk Factors—Certain Aspects of Co-Lender, Intercreditor and Similar Agreements Executed in Connection with Mortgage Loans Underlying Your Offered Certificates May be Unenforceable’’ in the accompanying base prospectus.

In addition, with respect to the First & Main North underlying mortgage loan, which represents 0.6% of the initial mortgage pool balance and 0.7% of the initial loan group no. 1 balance, the borrower is permitted to incur additional secured debt subject to certain loan-to-value and debt service coverage ratios, as well as the execution and delivery of a subordination and standstill agreement acceptable to the lender.

The existence of additional secured indebtedness may adversely affect the borrower’s financial viability and/or the trust’s security interest in the mortgaged real property, especially if such additional secured indebtedness is senior in right of payment to a mortgage loan, as with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan. See ‘‘Risk Factors—Additional Secured Debt Increases the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates; Co-Lender, Intercreditor and Similar Agreements May Limit a Mortgage Lender’s Rights’’ in the accompanying base prospectus.

In addition, with respect to each of six (6) mortgage loans that we intend to include in the trust, which mortgage loans collectively represent 34.7% of the initial mortgage pool balance and 40.4% of the initial loan group 1 balance, the direct or indirect equity interests in the related borrowers have been pledged to secure related mezzanine and affiliate loans, in each case as described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans —The 520 Madison Avenue Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The Government Property Advisors Portfolio Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The Colony Square Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The Midtown Plaza Mortgage Loan—Mezzanine Financing’’ and ‘‘Description of the Mortgage Pool— Additional Loan and Property Information—Other Financing’’ in this prospectus supplement.

Further, with respect to each of 39 mortgage loans that we intend to include in the trust, which mortgage loans collectively represent 25.3% of the initial mortgage pool balance, 28.3% of the initial loan group 1 balance and 6.8% of the initial loan group 2 balance, respectively, the equity holders of the borrower have a right to obtain mezzanine or affiliate financing, secured by a pledge of the direct or indirect ownership interests in the borrower, provided that the requirements set forth in the related loan documents are satisfied, as described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The Reston Town Center Mortgage Loan—Permitted Mezzanine Financing,’’ ‘‘—Significant Underlying Mortgage Loans—The Colony Square Mortgage Loan—Mezzanine Financing,’’ ‘‘—Significant

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Underlying Mortgage Loans—The Midtown Plaza Mortgage Loan—Mezzanine Financing’’ and ‘‘Description of the Mortgage Pool —Additional Loan and Property Information—Other Financing’’ in this prospectus supplement.

In addition, with respect to the underlying mortgage loan secured by the mortgaged real properly identified on Annex A-1 to this prospectus supplement as Extendicare Portfolio, representing 8.3% of the initial mortgage pool balance and 9.6% of the initial loan group 1 balance, the ultimate owner of the related borrower has a revolving loan in place in the maximum principal amount of $120,000,000, secured by a pledge of the direct and indirect equity in the operators of the related mortgaged real properties and the indirect equity in the borrower and the master tenant, as further described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan—Revolving Loan’’ in this prospectus supplement.

It is also possible that, in the case of some of the other mortgage loans that we intend to include in the trust, one or more of the principals of the related borrower may have incurred without our knowledge or may in the future also incur mezzanine or affiliate debt.

Mezzanine debt is secured by the principal’s direct ownership interest in the related borrower. Affiliate debt is secured by an entity’s indirect ownership interest in the related borrower. While a mezzanine or affiliate debt lender has no security interest in or rights to the related mortgaged real properties, a default under the subject mezzanine or affiliate loan could cause a change in control of the related borrower. Mezzanine and/or affiliate financing reduces the subject principal’s indirect equity in the subject mortgaged real property, and therefore may reduce its incentive to support such mortgaged real property.

See ‘‘Description of the Mortgage Pool—Loan Combinations’’ and ‘‘—Additional Loan and Property Information— Other Financing’’ in this prospectus supplement.

Certain Borrower Covenants May Affect That Borrower’s Available Cash Flow

Borrower covenants with respect to payments for landlord improvements, tenant improvements and leasing commissions, required repairs, taxes and other matters may adversely affect a borrower’s available cash flow and the failure to satisfy those obligations may result in a default under the subject lease.

Some Borrowers Under the Underlying Mortgage Loans Will Not Be Special Purpose Entities

The business activities of the borrowers under the underlying mortgage loans with cut-off date principal balances below $5,000,000 are in many cases not, or previously may not have been, limited to owning their respective mortgaged real properties. In addition, the business activities of borrowers under underlying mortgage loans with cut-off date principal balances above $5,000,000 may, in some cases, not be, or previously may not have been, limited to owning their respective mortgaged real properties. In the case of the Iron Point Office and Rampart Campus mortgage loans, representing 0.5% of the initial mortgage pool balance and 0.6% of the initial loan group 1 balance, the related borrowers are not required to be special purpose entities.

See ‘‘Risk Factors—The Borrower’s Form of Entity May Cause Special Risks and/or Hinder Recovery’’ in the accompanying base prospectus.

Tenancies in Common May Hinder Recovery

Certain of the mortgage loans that we intend to include in the trust have borrowers that own the related mortgaged real properties as tenants-in-common or permit the transfer of more than 49% of the direct or indirect equity interests in the related borrower into a tenant-in-common form of ownership. In general, with respect to a tenant-in-common ownership structure, each tenant-in-common owns an undivided share in the property and if such tenant-in-common desires to sell its interest in the property (and is unable to find a buyer or otherwise needs to force a partition) such tenant-in-common has the ability to seek a partition of the property (requesting that a court order a sale of the property and a distribution of the proceeds proportionally). In order to reduce the likelihood of a partition action, certain tenant-in-common borrowers have waived their partition rights, however, there can be no assurance that, if challenged, this waiver would be enforceable or that it would be enforced in a bankruptcy proceeding. Under certain circumstances, a tenant-in-common can be forced to sell its property, including by a bankruptcy trustee, by one or more other tenants-in-common seeking to partition the property and/or by a governmental lienholder in the event of unpaid taxes. Such a forced sale or action for partition of a mortgaged real property may occur during a market downturn and could result in an early repayment of the related mortgage loan, a

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significant delay in recovery against the tenant-in-common borrowers and/or a substantial decrease in the amount recoverable upon the related mortgage loan. Additionally, mortgaged real properties owned by tenant-in-common borrowers may be characterized by inefficient property management, inability to raise capital, possible serial bankruptcy filings and the need to deal with multiple borrowers in the event of a default on the loan.

In addition, enforcement of remedies against tenant-in-common borrowers may be prolonged because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay is reinstated. This risk can be mitigated if, after the commencement of the first such bankruptcy, a lender commences an involuntary proceeding against the other tenant-in-common borrowers and moves to consolidate all such cases. There can be no assurance that a court will consolidate all such cases.

The mortgaged real properties identified on Annex A-1 to this prospectus supplement as Thornblade Park Apartments, Weatherford Marketplace, Lexington on the Green, Windsor Landing Apartments, Ramsgate Apartments, CVS Commerce Bank – New Carrolton, Edgewater & Westcourt Apartments, General McMullen Self Storage, American Mini Storage, Storage Plus, Hampton Bays Medical and GetGo Station Monroeville, respectively, which mortgaged real properties secure mortgage loans that collectively represent 3.3% of the initial mortgage pool balance (seven (7) mortgage loans in loan group 1, representing 1.5% of the initial loan group 1 balance, and five (5) in loan group 2, representing 14.3% of the initial loan group 2 balance), are owned by tenant-in-common borrowers. Not all tenant-in-common borrowers for these mortgage loans are special purpose entities and some of those tenants-in-common are individuals.

See ‘‘Risk Factors—The Borrower’s Form of Entity May Cause Special Risks and/or Hinder Recovery’’ in the accompanying base prospectus.

Operating or Master Leases May Hinder Recovery

The underlying mortgaged real properties securing certain of the mortgage loans that we intend to include in the trust may be subject to an operating lease or master lease with an entity that is not a party to the mortgage loan documents. Upon a foreclosure of the related mortgage loan, the lessee under the related operating lease or master lease, as applicable, may have certain rights that could hinder or delay a lender's ability to foreclose on or dispose of the related mortgaged real property.

Changes in Mortgage Pool Composition Can Change the Nature of Your Investment

In general, if you purchase any offered certificates that have a relatively longer weighted average life, or if you purchase class X-CP certificates, then you will be more exposed to risks associated with changes in concentrations of borrower, loan or property characteristics than are persons that own offered certificates with relatively shorter weighted average lives. See ‘‘Risk Factors—Changes in Pool Composition Will Change the Nature of Your Investment’’ in the accompanying base prospectus.

Lending on Income-Producing Real Properties Entails Environmental Risks

The trust could become liable for a material adverse environmental condition at any of the mortgaged real properties securing the mortgage loans in the trust. Any potential environmental liability could reduce or delay payments on the offered certificates.

With respect to each of the mortgaged real properties securing mortgage loans that we intend to include in the trust, a third-party consultant conducted a Phase I environmental site assessment, updated a previously conducted Phase I environmental site assessment or, in the case of 18 mortgaged real properties, securing 0.6% of the initial mortgage pool balance, 0.3% of the initial loan group no. 1 balance and 2.4% of the initial loan group no. 2 balance, conducted a transaction screen. All of the environmental assessments, updates and transaction screens referred to in the first sentence of this paragraph—or, in the case of 16 mortgaged real properties, securing mortgage loans representing 4.0% of the initial mortgage pool balance and 4.6% of the initial loan group 1 balance, respectively, a related Phase II environmental site assessment—were completed during the 12-month period ending on the cut-off date. Other Phase II environmental site assessments may have been completed with respect to the mortgaged real properties prior to the origination of the related mortgage loans.

The environmental assessment conducted at any particular mortgaged real property did not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water was conducted in most instances only at multifamily rental properties and only when the originator of the related mortgage loan or the environmental consultant involved believed that such an analysis was warranted under the circumstances.

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In many cases, the environmental assessments described above identified the presence of asbestos-containing materials, lead-based paint, mold and/or radon. Where a material amount of asbestos-containing materials, lead-based paint, or mold was present above actionable levels, the environmental consultant generally recommended, and the related loan documents generally required—

•  the continuation or the establishment of an operation and maintenance plan to address the issue, or
•  the implementation of a remediation or mitigation program to address the issue;

provided that, in lieu of the actions contemplated by the preceding two bullets, an indemnity or a guaranty from an individual or an entity for, or an environmental insurance policy against, losses, costs and damages resulting from the required remediation or abatement of asbestos-containing materials and/or lead-based paint, may have been required to be delivered.

In certain cases where the environmental consultant recommended that action be taken in respect of a materially adverse or potentially material adverse environmental condition at the related mortgaged real property, then:

•  an environmental consultant investigated those conditions and recommended no further investigations or remediation; or
•  a responsible third party was identified as being responsible for the remediation; or
•  the related originator of the subject underlying mortgage loan generally required the related borrower:
(a)  to take investigative and/or remedial action; or
(b)  to carry out an operation and maintenance plan or other specific remedial measures post-closing and/or to establish an escrow reserve in an amount generally equal to 125% of the estimated cost of obtaining that plan and/or the remediation; or
(c)  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; or
(d)  to obtain or seek a letter from the applicable regulatory authority stating that no further action was required; or
(e)  to obtain environmental insurance (in the form of a secured creditor impaired property policy or other form of environmental insurance) or provide an indemnity from an individual or an entity.

Some borrowers under the subject underlying mortgage loans may not have satisfied or may not satisfy 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 implemented or will continue to be complied with.

In some cases, the environmental consultant did not recommend that any action be taken by the related borrower with respect to a potential adverse environmental condition at a mortgaged real property because a responsible party, other than the related borrower, had been identified with respect to that condition. There can be no assurance, however, that such a responsible party will be willing or financially able to address the subject condition.

In certain cases, the environmental assessments described above identified potential and, in some cases, serious environmental problems, at properties adjacent or otherwise near to the related mortgaged real properties. Such assessment generally indicated, however, that:

•  the mortgaged real property had not been affected or had been minimally affected,
•  the potential for the problem to affect the mortgaged real property was limited, or
•  a person responsible for remediation had been identified.

Where such problems posed a material adverse impact to a related mortgaged real property, the related borrower was generally required to monitor or further mitigate the environmental condition and/or to carry out additional testing, a responsible third party was identified, an indemnity was obtained, environmental insurance was obtained and/or some confirmation was sought that a responsible party was undertaking appropriate measures at the problem site.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as Thornblade Park Apartments, which mortgaged real property secures a mortgage loan representing 0.7% of the initial mortgage pool balance and 5.2% of the initial loan group 2 balance, the Phase I consultant recommended phased removal of lead-containing mini-blinds.

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With respect to the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Park Place Plaza and Northpark Plaza, which mortgaged real properties secure mortgage loans representing 0.2% and 0.2% of the initial mortgage pool balance and 0.3 and 0.2% of the initial loan group 1 balance, respectively, the Phase I consultant reported that the subject properties have been enrolled in state-funded dry cleaner remediation programs to address soil and groundwater contamination caused by on-site dry cleaning operations. Remedial activities will be conducted through these state-funded programs.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as Lexington on the Green, which mortgaged real property secures a mortgage loan representing 0.5% of the initial mortgage pool balance and 3.5% of the initial loan group 2 balance, the Phase I consultant reported that two of six radon samples taken at the subject property exceeded applicable EPA Guidelines. The consultant recommended additional radon sampling, and the related borrower has escrowed funds sufficient to cover two quarters of sampling.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as 1211 Avenue of the Americas, which mortgaged real property secures a mortgage loan representing 9.1% of the initial mortgage pool balance and 10.6% of the initial loan group 1 balance, the Phase I consultant reported that one first-draw drinking water sample at the subject property exceeded the federal maximum contaminant level for lead, however, the post-flush sample was below the regulatory standard. The consultant recommended replacement or periodic flushing.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as Extendicare Portfolio —Ironwood Health & Rehab Center, which mortgaged real property secures a mortgage loan representing 0.2% of the initial mortgage pool balance and 0.2% of the initial loan group no. 1 balance, the Phase I consultant recommended removal of a 100-gallon diesel fuel underground storage tank due to its estimated age and replacement with an aboveground storage tank. No estimated removal costs were provided.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as Extendicare Portfolio —Rocksprings Rehab Center, which mortgaged real property secures a mortgage loan representing 0.1% of the initial mortgage pool balance and 0.1% of the initial loan group no. 1 balance, the Phase I consultant reported that a 1,000-gallon underground storage tank previously was removed from the subject property without closure documentation. A Phase II environmental site assessment did not identify target compounds in excess of laboratory detection limits, however, the consultant recommends submittal of a closure report to the applicable regulatory authority.

With respect to the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Citizens 15 Portfolio, Citizens 12 Portfolio, Citizens 4 Portfolio, Citizens 6 Portfolio, Citizens 27 Portfolio, Citizens 22 Portfolio, Citizens 21 Portfolio, Citizens 5 Portfolio, Citizens 20 Portfolio, Citizens 16 Portfolio, Citizens 29 Portfolio, Citizens 13 Portfolio, Citizens 14 Portfolio, Citizens 17 Portfolio, Citizens 28 Portfolio, Citizens 8 Portfolio and Citizens 32 Portfolio, collectively representing 2.8% of the initial mortgage pool balance and 3.2% of the initial loan group 1 balance, due to the historical uses at the properties, an aggregate of $6,000,000 was reserved by the seller with the title company at the time the properties were acquired by the related borrower. The lender has no control over these reserve amounts which may be used to cover certain potential environmental remediation costs associated with these and other properties. In addition, a blanket insurance policy with an aggregate limit of $20,000,000 and a per occurance limit of $1,000,000, covering such mortgaged properties, along with certain other properties not included in this securitization, was obtained for the benefit of the related borrower to contribute to certain potential remediation costs. There can be no assurance that the reserve and/or the environmental insurance coverage will be adequate to cover all costs of remediation with respect to environmental conditions at these mortgaged properties.

With respect to the mortgaged real property identified on Annex A-1 to this prospectus supplement as Route 6 and Stoneleigh, which mortgaged real property secures a mortgage loan representing 0.3% of the initial mortgage pool balance and 0.3% of the initial loan group 1 balance, the Phase I consultant reported that there is a risk of soil and groundwater contamination at the property due to a tenant's use of a heating oil storage tank to supply oil-fired heating units located at the subject mortgaged real property. The responsible tenant has executed an agreement to remove the storage tank and remediate any environmental contamination associated with the presence of the storage tank. Although the amount of $5,859 was escrowed at closing with respect to the above environmental matter, there can be no assurance that the sum in escrow will cover any necessary remedial action or that the tenant will have the financial strength to complete the remediation. In addition, there can be no assurance that the responsible party will fully remediate, take responsibility for or otherwise address the identified environmental contamination at the subject property.

With respect to the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Martin Resorts, representing 1.7% of the initial mortgage pool balance and 1.9% of the initial loan group 1 balance, with respect the Phase

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I consultant reported a risk of soil and groundwater contamination at the Paso Robles Inn property, the Pismo Lighthouse Suites property and the Avila Lighthouse Suites property, due to their historical uses. With respect to the Paso Robles Inn property, two fuel oil underground storage tanks were associated with the property, both of which were removed in 2000. Although the closure letter from the County of San Luis Obispo Public Heath Department dated May 11, 2000, indicated total petroleum hydrocarbons concentrations exceeded the state action levels, the letter stated that both areas of contamination were small, not subject to migration, being paved over and, therefore, required no further action. With respect to the Pismo Lighthouse Suites property, the northwestern corner of the property was occupied by an Exxon service station from approximately 1960 to 1985. The service station reportedly utilized four underground storage tanks and one waste oil aboveground storage tank, which were removed in 1985. According to the Phase II environmental site assessment prepared in 2001, nine soil borings were advanced and 26 soil samples were collected in the area, which indicated that concentrations of total petroleum hydrocarbons were below analytical detection limits and, therefore, no further investigation was recommended by the environmental consultants. Finally, with respect to the Avila Lighthouse Suites, petroleum-impacted soil and groundwater was discovered along the petroleum pipeline corridor of an adjacent street. Investigations established that petroleum-impacted soil extended onto the southeast corner of the property for a distance of 30 to 40 feet. Groundwater monitoring revealed that even wells within the zone of petroleum-impacted soil did not produce water samples with hydrocarbon concentrations in excess of generally applied regional water quality control board action levels. In 1998, the regional water quality control board issued a cleanup and abatement order directing the responsible party to remediate, by excavation, petroleum-impacted soil along the adjacent street. The excavation was officially completed in 2000 and a no further action or closure letter was issued in 2001. There can be no assurance that additional environmental conditions will not be discovered at the related properties due to their historical uses, that any remedial measures taken with respect to the identified environmental conditions were sufficient or that the responsible parties will take full responsibility for or have sufficient funds to carry out any additional remedial measures necessary at the subject properties.

A particular environmental assessment may not have conducted a review for all potentially adverse conditions. For example, an analysis for lead-based paint, lead in drinking water, mold, and/or radon was done only if the originating lender determined or the environmental consultant recommended that the use, age, location and condition of the subject property warranted that analysis. There can be no assurance that—

•  the environmental assessments referred to above identified all material adverse environmental conditions and circumstances at the subject properties;
•  the results of the environmental testing were accurately evaluated in all cases;
•  the recommendation of the environmental consultant was, in the case of all identified problems, the appropriate action to take;
•  the related borrowers have implemented or will implement all operations and maintenance plans and other remedial actions recommended by the related environmental consultant;
•  the recommended action will fully remediate or otherwise address all the identified adverse environmental conditions and risks;
•  any environmental insurance or indemnities will be sufficient or will cover the recommended remediation or other action; and/or
•  any environmental escrows that may have been established will be sufficient to cover the recommended remediation or other action.

The information provided by us in this prospectus supplement regarding environmental conditions at the respective mortgaged real properties is based on the results of the environmental assessments referred to in this ‘‘—Lending on Income-Producing Real Properties Entails Environmental Risks’’ subsection and has not been independently verified by us, the underwriters or any of our or their respective affiliates.

There can be no assurance that the environmental assessments referred to above 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 securing the underlying mortgage loans.

See ‘‘Description of the Mortgage Pool—Assessments of Property Condition—Environmental Assessments’’ in this prospectus supplement and ‘‘Risk Factors—Environmental Liabilities Will Adversely Affect the Value and Operation of the Contaminated Property and May Deter a Lender from Foreclosing’’ and ‘‘Legal Aspects of Mortgage Loans—Environmental Considerations’’ in the accompanying base prospectus.

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Lending on Income-Producing Properties Entails Risks Related to Property Condition

Engineering firms inspected substantially all of the mortgaged real properties during the 12-month period preceding the cut-off date, in order to assess—

•  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.

In some cases, the inspections identified, at origination of the related mortgage loan, conditions requiring escrows to be established for repairs or replacements or other work to be performed at the related mortgaged real property, in each case estimated to cost in excess of $100,000. In those cases, the originator generally required the related borrower or a sponsor of the borrower to fund reserves, or deliver letters of credit, guaranties or other instruments, to cover or partially cover these costs. In the case of the 1211 Avenue of the Americas underlying mortgage loan, a reserve was funded at origination which included the amount of $3,282,283 to cover costs of certain elevator renovations, including the elimination of certain building code violations with respect to the elevators at the 1211 Avenue of the Americas mortgaged real property. There can be no assurance that, in any such case, the reserves established by the related borrower to cover the costs of required repairs, replacements or installations will be sufficient for their intended purpose or that the related borrowers will complete such repairs, replacements or installations which, in some cases, are necessary to maintain compliance with state or municipal regulations.

In the case of the Roswell, New Mexico property included in the Government Property Advisors Portfolio, observations of the exterior and interior walls revealed apparent signs of cracking and movement that could indicate excessive settlement or an improperly installed foundation system. The engineering firm noted additional evidence of foundation movement, including cracking of drywall, and binding of doorways and recommended further investigation to determine the extent and causes of the observed foundation movement indicators. A reserve was funded at origination which included 125% of the currently estimated costs of renovations to address these matters. To the extent it is determined that additional funds will be necessary to complete such renovations, excess cash flow from the entire Government Property Advisors Portfolio will be reserved until 125% of the newly estimated cost of renovations is escrowed.

There May be Restrictions on the Ability of a Borrower, a Lender or Any Transferee Thereof to Terminate or Renegotiate Property Management Agreements That are in Existence With Respect to Some of the Mortgaged Real Properties

In the case of some of the mortgage loans that we intend to include in the trust, the property manager and/or the property management agreement in existence with respect to the related mortgaged real property cannot be terminated by the borrower or the lender, other than under the very limited circumstances set forth in that management agreement, and the terms of the property management agreement are not subject to negotiation. The terms of those property management agreements may provide for the granting of broad powers and discretion to the property manager with respect to the management and operation of the subject property including the right to set pricing or rates, hire and fire employees and manage revenues, operating accounts and reserves. In addition, the fees payable to a property manager pursuant to any property management agreement related to an underlying mortgage loan may be in excess of property management fees paid with respect to similar real properties for similar management responsibilities and may consist of a base fee plus an incentive fee (after expenses and a specified return to the property owner). Further, those property management agreements (including with respect to the identity of the property manager) may be binding on transferees of the mortgaged real property, including a lender as transferee that succeeds to the rights of the borrower through foreclosure or acceptance of a deed in lieu of foreclosure, and any transferee of such lender. In addition, certain property management agreements contain provisions restricting the owner of the related mortgaged real property from mortgaging, or refinancing mortgage debt on, its interest in such property and/or from selling the subject mortgaged real property to specified entities that might provide business competition to or taint the reputation of the subject business enterprise or the property manager and/or its affiliates, and may require any transferees of the subject mortgaged real property to execute a recognition or nondisturbance agreement binding such entity to the foregoing terms. These restrictions may restrict the liquidity of the related mortgaged real property.

With Respect to Six (6) Mortgage Loans (Including Three (3) of the Four (4) Largest Mortgage Loans) That We Intend to Include in the Trust, the Mortgaged Real Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One (1) or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests; The Series 2006-C7 Certificateholders May Have a Limited Ability to Control the Servicing of the Subject Loan Combinations

Six (6) mortgage loans that we intend to include in the trust, which mortgage loans (a) are described under ‘‘Description of the Mortgage Pool—Loan Combinations’’ and/or ‘‘—Significant Underlying Mortgage Loans’’ in this prospectus

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supplement and (b) collectively represent 22.8% of the initial mortgage pool balance, 26.4% of the initial loan group 1 balance and 1.2% of the initial loan group 2 balance, are each part of a loan combination that includes one or more additional mortgage loans (not included in the trust) that are secured by the same mortgage instrument(s) encumbering the same mortgaged real property or properties, as applicable, as is the subject underlying mortgage loan. Pursuant to one or more co-lender or similar agreements, a holder of a particular non-trust mortgage loan in a subject loan combination, or a group of holders of non-trust mortgage loans in a subject loan combination (acting together), may be granted various rights and powers that affect the underlying mortgage loan in that loan combination, including (a) cure rights with respect to the underlying mortgage loan in that loan combination, (b) a purchase option with respect to the underlying mortgage loan in that loan combination, (c) the right to advise, direct and/or consult with the applicable servicer regarding various servicing matters, including certain modifications, affecting that loan combination, and/or (d) the right to replace the applicable special servicer (without cause). In some cases, those rights and powers may be assignable or may be exercised through a representative or designee. In connection with exercising any of the foregoing rights afforded to it, the holder of any of the non-trust mortgage loans in any of the above-described loan combinations (or, if applicable, any representative, designee or assignee thereof with respect to the particular right) will likely not be an interested party with respect to the series 2006-C7 securitization, will have no obligation to consider the interests of, or the impact of exercising such rights on, the series 2006-C7 certificateholders and may have interests that conflict with your interests. If any such non-trust mortgage loan is included in a securitization, then the representative, designee or assignee exercising any of the rights of the holder of that non-trust mortgage loan may be a securityholder, an operating advisor, a controlling class representative or other comparable party or a servicer from that securitization. You should expect that the holder or beneficial owner of a non-trust mortgage loan will exercise its rights and powers to protect its own economic interests, and will not be liable to the series 2006-C7 certificateholders for so doing. See ‘‘Description of the Mortgage Pool —Loan Combinations’’ in this prospectus supplement for a more detailed description, with respect to each loan combination, of the related co-lender arrangement and the priority of payments among the mortgage loans comprising that loan combination. Also, see ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ and ‘‘—Replacement of the Special Servicer’’ and ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement for a more detailed description of certain of the foregoing rights of the respective non-trust mortgage loan noteholders.

In the case of the Triangle Town Center Subordinate Tranche underlying mortgage loan, the rights and powers described in the preceding paragraph will belong to the trust as the holder of the subordinate mortgage loan in the Triangle Town Center loan combination, at least until the occurrence of certain control trigger events. However, the series 2006-C7 pooling and servicing agreement will delegate or effectively assign those rights and powers to the series 2006-C7 controlling class certificateholders or their representative. See ‘‘—The Interests of the Series 2006-C7 Controlling Class Certificateholders May Be in Conflict with the Interests of the Offered Certificateholders’’ above.

In addition, the following two (2) underlying mortgage loans are each being or expected to be serviced and administered pursuant to a servicing agreement other than series 2006-C7 pooling and servicing agreement: (a) the 1211 Avenue of the Americas underlying mortgage loan, which represents 9.1% of the initial mortgage pool balance, is being serviced pursuant to the pooling and servicing agreement relating to the LB-UBS Commercial Mortgage Trust 2006-C6, Commercial Mortgage Pass-Through Certificates, Series 2006-C6 commercial mortgage securitization, which is the governing document for the securitization of the 1211 Avenue of the Americas pari passu non-trust mortgage loan; and (b) the Triangle Town Center Subordinate Tranche underlying mortgage loan, which represents 1.0% of the initial mortgage pool balance, is being serviced pursuant to the pooling and servicing agreement relating to the LB-UBS Commercial Mortgage Trust 2006-C1, Commercial Mortgage Pass-Through Certificates, Series 2006-C1 commercial mortgage securitization, which is the governing document for the securitization of the Triangle Town Center note A senior non-trust mortgage loan. See ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Combination’’ in this prospectus supplement. As a result, the holders of the offered certificates will have limited ability to control the servicing of those underlying mortgage loans and the parties with control over the servicing of those underlying mortgage loans may have interests that conflict with your interests.

The Triangle Town Center Subordinate Tranche Underlying Mortgage Loan Is Part of a Loan Combination Comprised of Three (3) Mortgage Loans in Which the Subject Underlying Mortgage Loan Is Generally Subordinate to Both of the Corresponding Senior Non-Trust Loans For Purposes of Allocating Payments of Both Principal and Interest Between Them

The Triangle Town Center Subordinate Tranche underlying mortgage loan, which has an unpaid principal balance of $29,000,000 and represents 1.0% of the initial mortgage pool balance, is subordinate to the two corresponding senior non-trust mortgage loans for purposes of allocating payments of principal between them. The Triangle Town Center senior non-trust

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mortgage loans have an aggregate unpaid principal balance of $171,000,000. During the continuance of certain events of default, no payments of principal or interest are allocated to the Triangle Town Center Subordinate Tranche underlying mortgage loan until the corresponding senior non-trust mortgage loans have been paid in full. Further, any expenses, losses and shortfalls relating to any mortgage loan in the Triangle Town Center loan combination or the underlying mortgaged real property, including special servicing compensation in the form of special servicing fees, liquidation fees and workout fees and, if and to the extent not offset by related default interest and late payment charges, interest on advances, will be allocated, first, to the holder of the Triangle Town Center Subordinate Tranche underlying mortgage loan, then, to the holder of the Triangle Town Center note B-1 senior non-trust loan and finally, to the holder of the Triangle Town Center note A senior non-trust loan.

Conflicts of Interest May Exist in Connection with Certain Previous or Existing Relationships of a Mortgage Loan Seller or an Affiliate Thereof to Certain of the Underlying Mortgage Loans, Related Borrowers or Related Mortgaged Real Properties

Certain of the underlying mortgage loans may have been refinancings of debt previously held by a mortgage loan seller or an affiliate of a mortgage loan seller, or a mortgage loan seller or its respective affiliates may have or have had equity investments in the borrowers or mortgaged real properties relating to certain of the mortgage loans included in the trust. In addition, a mortgage loan seller and its affiliates may have made and/or may make loans to, or equity investments in, or may otherwise have or have had business relationships with, affiliates of the borrowers under the mortgage loans in the trust. Further, a mortgage loan seller and/or its affiliates may have had or may have (currently or at a future time) a managing or non-managing ownership interest in certain of the borrowers under the mortgage loans in the trust. For example, with respect to the underlying mortgage loans secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as 1211 Avenue of the Americas, Colony Square, Midtown Plaza, all mortgaged real properties identified on Annex A-1 with a property name preceded by ‘‘Citizens’’, and Archstone Woodlands Apartments, collectively representing 19.0% of the initial mortgage pool balance, 20.8% of the initial loan group 1 balance and 7.7% the initial loan group 2 balance, respectively, the related mortgage loan seller or an affiliate thereof has a direct or indirect ownership interest in the related borrower. Additional financial interests in, or other financial dealings with, a borrower or its affiliates under any of the mortgage loans in the trust may create conflicts of interest.

In the foregoing cases, the relationship of the mortgage loan seller or an affiliate to, or the ownership interest of the mortgage loan seller or an affiliate in, the borrower under any mortgage loan to be included in the trust or a borrower affiliate may have presented a conflict of interest in connection with the underwriting and origination of that underlying mortgage loan. There can be no assurance that there are not other underlying mortgage loans that involve the related mortgage loan seller or its affiliates in a manner similar to those described above.

Limitations on Enforceability of Cross-Collateralization May Reduce Its Benefits

The mortgage pool will include mortgage loans that are secured, including through cross-collateralization with other mortgage loans, by multiple mortgaged real properties. These mortgage loans are identified in the tables contained in Annex A-1 to this prospectus supplement. The purpose of securing any particular mortgage loan or group of cross-collateralized mortgage loans with multiple real properties is to reduce the risk of default or ultimate loss as a result of an inability of any particular property to generate sufficient net operating income to pay debt service. However, some of these mortgage loans may permit—

•  the release of one or more of the related mortgaged real properties from the related mortgage lien, and/or
•  a full or partial termination of the applicable cross-collateralization,

in each case, upon the satisfaction of the conditions described under ‘‘Description of the Mortgage Pool—Terms and Conditions of the Underlying Mortgage Loans’’ and ‘‘—Cross Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans With Affiliated Borrowers’’ in this prospectus supplement.

If the borrower under any mortgage loan that is cross-collateralized with the mortgage loans of other borrowers were to become a debtor in a bankruptcy case, the creditors of that borrower or the representative of that borrower’s bankruptcy estate could challenge that borrower’s pledging of the underlying mortgaged real property as a fraudulent conveyance. See ‘‘Risk Factors—Some Provisions in the Mortgage Loans Underlying Your Offered Certificates May Be Challenged as Being Unenforceable—Cross-Collateralization Arrangements’’ in the accompanying base prospectus.

In addition, when multiple real properties secure an individual 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

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that individual mortgage loan or group of cross-collateralized mortgage loans, generally to avoid 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.

Investors May Want to Consider Prior Bankruptcies

We are aware of one (1) mortgage loan that we intend to include in the trust, representing 0.1% of the initial mortgage pool balance and 0.1% of the initial loan group 1 balance, where the related borrower, a controlling principal in the related borrower or a guarantor has been a party to prior bankruptcy proceedings within the last 10 years. However, there is no assurance that principals or affiliates of other borrowers have not been a party to bankruptcy proceedings. See ‘‘Risk Factors—Borrower Bankruptcy Proceedings Can Delay and Impair Recovery on a Mortgage Loan Underlying Your Offered Certificates’’ in the accompanying base prospectus.

Litigation May Adversely Affect Property Performance

There may be pending or threatened legal proceedings against the borrowers and/or guarantors under the underlying 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.

With respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Park Place LaPalma, which mortgage loan represents 0.3% of the initial mortgage pool balance and 0.3% of the Initial Loan Group 1 Balance, the borrower is a defendant in a lawsuit with a previous tenant alleging that the borrower failed to properly maintain the leased premises. The tenant has since vacated, owing the borrower approximately $23,000. The borrower filed a motion to dismiss on July 9, 2004, and no material action has taken place since. The potential liability is approximately $45,500.

Risks Related to the Extendicare Portfolio Mortgage Loan

The underlying mortgage loan secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as the Extendicare Portfolio, representing 8.3% of the initial mortgage pool balance and 9.6% of the initial loan group 1 balance, is secured by liens on the related borrowers' interests in 82 skilled nursing and/or assisted living facilities. Nursing facilities and assisted living facilities must meet various federal and state requirements that relate, among other things, to personnel qualifications, quality of care and the adequacy of facility buildings, equipment and supplies. Federal and state agencies routinely conduct annual surveys and complaint investigation surveys to confirm compliance with the Medicare and Medicaid requirements. These agencies may issue statements of deficiencies for non-compliance and may provide the facility with an opportunity to correct cited deficiencies by preparing and implementing a ‘‘plan of correction.’’ In the case of nursing facilities, where deficiencies pose a threat of immediate jeopardy to the health, safety or welfare of the residents, upon repeat deficiencies or upon continued substantial noncompliance with requirements, the agency is authorized to take various adverse actions against the nursing facility, including imposing fines (up to $10,000 per day), denial of payments for new admissions, bans on admission of new residents, termination of payments, license revocation, appointment of a receiver, or temporary manager (at the operator's expense), decertification as a Medicare or Medicaid program participant and closure. Singly or in combination, available sanctions for quality deficiencies can have a material adverse effect on facilities, particularly nursing facilities, results of operations, liquidity and financial position. There are often significant delays in the process for facilities to appeal sanctions and certain sanctions continue for long periods of time. Proceedings to contest sanctions often involve significant legal expense and facility resources, and there can be no assurance that any appeals will be successful.

With respect to the Extendicare Portfolio mortgaged real properties, the Extendicare Portfolio borrower has informed the lender that, as of October 16, 2006, 11 facilities were reported to have received a ‘‘G’’ level deficiency or higher on their most recent survey (Standard and/or Complaint Investigation), which means that if any such mortgaged real property receives a ‘‘G’’ level or higher deficiency on its next survey the government may impose a remedy, such as denial of payments for new admissions, in as little as two days if there is immediate jeopardy or 15 days if there is no immediate jeopardy. Of the 11 ‘‘G’’ or higher level deficiencies, three (3) of the Extendicare Portfolio mortgaged real properties have ‘‘G’’ or higher level deficiencies that had not been cleared by the state. The Extendicare Portfolio borrower has informed the lender that, with respect to each of these three (3) mortgaged real properties, the related operator was in the process of remediating the

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problem, had submitted a plan of correction to the appropriate agency and was awaiting the agency's acceptance of the plan. None of the Extendicare Portfolio mortgaged real properties were reported to be the subject of a ‘‘double G’’ determination for the last three years which had not been resolved by submission of an acceptable plan and as a result thereof such properties had no material impairment of reimbursement. None of the Extendicare Portfolio mortgaged real properties were found to have delivered substandard quality of care in their last two consecutive surveys. During this reporting period, the borrower also reported that six (6) facilities had denials of payments for new admissions imposed one (1) time per facility as a result of the last/most recent Standard and/or Complaint Survey and one (1) nursing facility had been reported as being a Special Focus Facility (as that term is defined by the Centers for Medicare and Medicaid Services Special Focus Facility Program which focuses on facilities with a history of poor survey performance).

There can be no assurance that any of the facilities will remain in compliance with applicable requirements and thus not be subject to sanctions, including denials of payments for new admissions, civil monetary penalties and, in extreme cases, termination of licensure and/or participation in federal, state and third-party payor programs.

The Extendicare Portfolio borrower has informed the lender that certain of the nursing facilities have been subject to audits and that some of these audits have been settled, others have been inactive and still others are pending. An adverse determination in any such audits, whether currently asserted or arising in the future, could have an adverse effect on an audited nursing facility. The borrower has also represented to the lender that, from time to time, the nursing facilities are subject to investigations by the state Medicaid Fraud Control Units. However, for any open investigations, the borrower represented to the lender that they are not aware of any findings from these investigations that require disclosure or accrual of fines or penalties. An adverse determination in any proceedings or governmental investigations, whether currently asserted or arising in the future, could have an adverse effect on the nursing facility and the operators.

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CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT

From time to time we use capitalized terms in this prospectus supplement, including in Annexes A-1, A-2, A-3, A-4, A-5, A-6 and B to this prospectus supplement. In cases where a particular capitalized term is frequently used, it will have the meaning assigned to it in the glossary attached to this prospectus supplement.

FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying base prospectus include 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 which 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.

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DESCRIPTION OF THE MORTGAGE POOL

General

We intend to include the 184 mortgage loans identified on Annex A-1 to this prospectus supplement in the trust. Those mortgage loans will have an Initial Mortgage Pool Balance of $3,019,658,540. 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 allocating payments on certain classes of the offered certificates, the mortgage pool will be divided into a ‘‘Loan Group 1’’ and a ‘‘Loan Group 2.’’ ‘‘Loan Group 1’’ will consist of all of the mortgage loans backing the series 2006- C7 certificates that are secured by property types other than multifamily and mobile home park, together with the underlying mortgage loans secured by the Loan Group 1 Multifamily Properties (which are identified in the glossary to this prospectus supplement). Loan Group 1 will consist of 141 mortgage loans, with an Initial Loan Group 1 Balance of $2,592,035,525, representing approximately 85.8% of the Initial Mortgage Pool Balance. ‘‘Loan Group 2’’ will consist of all of the mortgage loans backing the series 2006-C7 certificates that are secured by multifamily and mobile home park properties (other than the Loan Group 1 Multifamily Properties, which are identified in the glossary to this prospectus supplement). Loan Group 2 will consist of 43 mortgage loans, with an Initial Loan Group 2 Balance of $427,623,015, representing approximately 14.2% of the Initial Mortgage Pool Balance. See Annex B—Certain Information Regarding Multifamily Properties. The loan group in which each underlying mortgage loan is included is identified on Annex A-1 to this prospectus supplement.

The Initial Mortgage Pool Balance will equal the total cut-off date principal balance of all the mortgage loans included in the trust, the Initial Loan Group 1 Balance will equal the total cut-off date principal balance of the mortgage loans in Loan Group 1, and the Initial Loan Group 2 Balance will equal the total cut-off date principal balance of the mortgage loans in Loan Group 2.

The cut-off date principal balance of any mortgage loan is equal to its unpaid principal balance as of the cut-off date, 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 is shown on Annex A-1 to this prospectus supplement.

Each of the mortgage loans that we intend to include in the trust was originated by the related mortgage loan seller, by a predecessor in interest to the related mortgage loan seller, by an affiliate of the related mortgage loan seller or by a correspondent in the related mortgage loan seller's or one of its affiliates' conduit lending program.

The Lehman Mortgage Loan Seller is our affiliate and an affiliate of Lehman Brothers Inc. The UBS Mortgage Loan Seller is an affiliate of UBS Global Asset Management (US) Inc. KeyBank National Association is an affiliate of KeyBanc Capital Markets, a division of McDonald Investments Inc.

Each of the mortgage loans that we intend to include in the trust 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 fee 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. However, the Triangle Town Center Subordinate Tranche Mortgage Loan is subordinate in right of payment to both of the Triangle Town Center Senior Non-Trust Loans.

You should consider each of the underlying mortgage loans to be a nonrecourse obligation of the related borrower. You should anticipate 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. 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 underlying mortgage loans will be insured or guaranteed by any governmental agency or instrumentality or by any private mortgage insurer.

It has been confirmed to us by S&P and/or Fitch that four (4) of the mortgage loans that we intend to include in the trust, representing 37.1% of the Initial Mortgage Pool Balance, each has, in the context of its inclusion in the trust, credit characteristics consistent with investment grade-rated obligations.

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We provide in this prospectus supplement a variety of information regarding the mortgage loans that we intend to include in the trust. 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 reflects a weighting by their respective cut-off date principal balances.
•  If a mortgage loan is secured by multiple mortgaged real properties located in more than one state or representing more than one property type, a portion of that mortgage loan has been allocated to each of those properties.
•  When information with respect to mortgaged real properties is expressed as a percentage of the Initial Mortgage Pool Balance, the Initial Loan Group 1 Balance or the Initial Loan Group 2 Balance, the percentages are based upon the cut-off date principal balances of the related mortgage loans or allocated portions of those balances.
•  The general characteristics of the entire mortgage pool backing the offered certificates are not necessarily representative of the general characteristics of either Loan Group 1 or Loan Group 2. The yield and risk of loss on any class of offered certificates may depend on, among other things, the composition of each of Loan Group 1 and Loan Group 2. The general characteristics of each such loan group should also be analyzed when making an investment decision.
•  Whenever we refer to a particular mortgaged real property by name, unless the particular item is otherwise specifically defined, we mean the mortgaged real property identified by that name on Annex A-1 to this prospectus supplement. Whenever we refer to a particular mortgage loan by name, unless the particular item is otherwise specifically defined, we mean the mortgage loan secured by the mortgaged real property identified by that name on Annex 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 as a result of 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 42 underlying mortgage loans, collectively representing 29.2% of the Initial Mortgage Pool Balance, that are, in each case, individually or through cross-collateralization with other underlying 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 the amount of mortgage recording tax due in connection with the transaction. 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.

The table below identifies, by property or portfolio name set forth on Annex A-1 to this prospectus supplement, each individual multi-property mortgage loan that represents at least 1.0% of the Initial Mortgage Pool Balance.


Property/Portfolio Names Number of
Properties		 % of Initial
Mortgage
Pool Balance
1. Extendicare Portfolio 82
8.3
%
2. Republic Portfolio 2
3.3
%
3. Government Property Advisors Portfolio 38
3.2
%
4. Arizona Retail Portfolio 14
2.8
%
5. Martin Resorts 5
1.7
%
6. Wolverine Portfolio 10
1.5
%
7. 695/710 Route 46 2
1.2
%

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The table below identifies, by property or portfolio name set forth on Annex A-1 to this prospectus supplement, each group of cross-collateralized mortgage loans that represents at least 0.5% of the Initial Mortgage Pool Balance.


Property/Portfolio Names Number of
Properties		 % of Initial
Mortgage Pool
Balance
1.  Jefferson at Kessler Park, Jefferson at Founders Park 2
1.5
%
2.  Shenandoah Woods, Southern Oaks, Hidden Pines, Unity Pointe, Ashley Square,  Inglewood Village 6
0.7
%

Some or all of the respective groups of cross-collateralized mortgage loans and/or individual multi-property mortgage loans that we intend to include in the trust entitle the related borrowers to a release of one or more of the corresponding mortgaged real properties through partial defeasance. The partial defeasance of a group of cross-collateralized mortgage loans or any individual multi-property loan would result in the defeased and undefeased portions of the subject aggregate debt ceasing to be cross-collateralized. See ‘‘—Terms and Conditions of the Underlying Mortgage Loans— Defeasance Loans’’ below.

The following table identifies the various separate groups of mortgaged real properties that are under common ownership and/or control, that are not reflected, or are not fully reflected, in the prior table and that represent at least 1.0% of the Initial Mortgage Pool Balance.


Property/Portfolio Names Number of
Properties		 % of Initial
Mortgage Pool
Balance
1. Colony Square, Midtown Plaza 2
                6.0
%
2. All mortgaged properties identified in Annex A-1 with a property name preceded
by ‘‘Citizens’’		 17
                2.8
%
3. Wolverine Portfolio, Redwood Portfolio II, Boulevard Estates 3
                2.5
%
4. 6380 Wilshire, Brunswig Square, 2
                1.4
%
5. Thornblade Park Apartments, Lexington on the Green 2
1.2
%
6. Melbourne Village, Park Place Plaza, Town West Plaza, Fond du Lac Plaza,
Lemon Bay, Shelley Station, Crossroads Shopping Center		 7
                1.2
%
7. Windsor Apartments, Serene Village, Crystal Pointe Apartments 3
1.0
%

Partial Releases

Some of the mortgage loans that we intend to include in the trust may permit the release of one or more undeveloped or non-income producing parcels or outparcels that, in each such case, do not represent a significant portion of the appraised value of the related mortgaged real property, or have been excluded from the appraised value of the related mortgaged real property, shown on Annex A 1 to this prospectus supplement.

With respect to the Midtown Plaza Mortgage Loan, representing 2.2% of the Initial Mortgage Pool Balance and 2.5% of the Initial Loan Group 1 Balance, the Midtown Plaza Borrower has the right at any time to obtain the release of a specified portion of the Midtown Plaza Mortgaged Property from the lien of the security instrument upon the satisfaction of certain conditions set forth in the related loan agreement, as further described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans— The Midtown Plaza Mortgage Loan—Development Parcel Release.’’

With respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as 695/710 Route 46, which mortgage loan represents 1.2 % of the Initial Mortgage Pool Balance and 1.4% of the Initial Loan Group 1 Balance, the borrower is permitted to obtain the release of a specified portion of the related mortgaged real property provided certain conditions are satisfied, including the achievement of certain DSCR and LTV Ratio tests, the payment of 110% of the allocated loan amount for such parcel and payment of a prepayment consideration.

Property Substitutions

With respect to the Extendicare Portfolio Mortgage Loan, representing 8.3% of the Initial Mortgage Pool Balance and 9.6% of the Initial Loan Group 1 Balance, the Extendicare Portfolio Borrowers may obtain the release of one or more Extendicare Portfolio Mortgaged Properties from the lien of the mortgage by substituting therefor one or more substitute properties, subject to the satisfaction of certain conditions, as further described under ‘‘Description of the Mortgage

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Pool—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan—Substitutions.’’ In addition, in the event of an ‘‘operating lease default’’ or a ‘‘health care default’’ under the terms of the related loan documents with respect to a particular Extendicare Portfolio Mortgaged Property, such default shall not constitute an event of default in the event the Extendicare Portfolio Borrower effects a substitution of the subject property in accordance with the related loan documents, as further described under ‘‘—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan—Other Release and Substitution Provisions.’’

With respect to the Government Property Advisors Portfolio Mortgage Loan, representing 3.2% of the Initial Mortgage Pool Balance and 3.7% of the Initial Loan Group 1 Balance, the Government Property Advisors Portfolio Borrower may obtain a release of a Government Property Advisors Portfolio Mortgaged Property and substitute as collateral for the Government Property Advisors Portfolio Mortgage Loan another property or properties upon satisfaction of certain conditions set forth in the Government Property Advisors Portfolio Mortgage Loan documents, as more particularly described above in ‘‘Description of the Mortgage Pool —Significant Underlying Mortgage Loans—The Government Property Advisors Portfolio Mortgage Loan—Substitutions’’ in this prospectus supplement.

Terms and Conditions of the Underlying Mortgage Loans

Due Dates.    Subject, in some cases, to a next business day convention—

•  One hundred forty-three (143) of the mortgage loans that we intend to include in the trust, representing 89.3% of the Initial Mortgage Pool Balance, provide for scheduled payments of principal and/or interest to be due on the eleventh day of each month,
•  Forty (40) of the mortgage loans that we intend to include in the trust, representing 9.7% of the Initial Mortgage Pool Balance, provide for scheduled payments of principal and/or interest to be due on the first day of each month,
•  One (1) of the mortgage loans that we intend to include in the trust, representing 1.0% of the Initial Mortgage Pool Balance, provide for scheduled payments of principal and/or interest to be due on the fifth day of each month,

Each mortgage loan that we intend to include in the trust provides for one or both of the following—

•  a grace period for the payment of each monthly debt service payment that does not go beyond the 11th day of the month or, if that 11th day is not a business day, then beyond the next business day, and/or
•  that either Default Interest will commence accruing or late payment charges will be due in the event that a monthly debt service payment has not been made as of the 11th day of the month or, if that 11th day is not a business day, then as of the next business day;

provided that, because the grace period with respect to certain underlying mortgage loans does not commence until a notice required under the related loan documents is delivered to the related borrower, if the master servicer fails to deliver the requisite notice for such an underlying mortgage loan in a timely manner in any given month, the grace period for that underlying mortgage loan could expire later than the 11th day (or the next business day) in that month. For example, some of the underlying mortgage loans, with respect to the related borrower’s first two failures to timely make constant monthly payments in any calendar year, Default Interest will not accrue until five days after notice from lender of such default.

Mortgage Rates; Calculations of Interest.    In general, each of the mortgage loans that we intend to include in the trust bears interest at a mortgage interest rate that, in the absence of default, is fixed until maturity. However, as described under ‘‘—ARD Loans’’ below, an ARD Loan that remains outstanding past its anticipated repayment date will accrue interest after that date at a rate that is in excess of its mortgage interest rate prior to that date, but the additional interest will not be payable until the entire principal balance of the mortgage loan has been paid in full.

The current mortgage interest rate for each of the mortgage loans that we intend to include in the trust is shown on Annex A-1 to this prospectus supplement. As of the cut-off date, those mortgage interest rates ranged from 6.6525% per annum to 5.2000% per annum, and the weighted average of those mortgage interest rates was 6.1045% per annum.

Except in the case of ARD Loans, none of the mortgage loans that we intend to include in the trust provides for negative amortization or for the deferral of interest.

All but two (2) of the underlying mortgage loans will accrue interest on an Actual/360 Basis. The underlying mortgage loans secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Hamburg Shopping Center, and Triangle Town Center Subordinate Tranche, together representing 1.1% of the Initial Mortgage Pool Balance, accrue interest on a 30/360 Basis.

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Balloon Loans.    One hundred seventy-five (175) of the mortgage loans that we intend to include in the trust, representing 98.1% of the Initial Mortgage Pool Balance, of which 132 mortgage loans are in Loan Group 1, representing 97.8% of the Initial Loan Group 1 Balance, and 43 mortgage loans are in Loan Group 2, representing 100.0% of the Initial Loan Group 2 Balance, respectively, are Balloon Loans and are characterized by—

•  either (a) an amortization schedule that is significantly longer than the actual term of the mortgage loan and that may begin after the end of an initial interest-only period or (b) no amortization prior to stated maturity, and
•  a substantial balloon payment being due with respect to the mortgage loan on its stated maturity date.

Fifty (50) of the Balloon Loans identified in the prior paragraph, representing 55.9% of the Initial Mortgage Pool Balance, of which 38 mortgage loans are in Loan Group 1, representing 57.5% of the Initial Loan Group 1 Balance, and 12 mortgage loans are in Loan Group 2, representing 46.2% of the Initial Loan Group 2 Balance, respectively, require payments of interest only to be due on each due date until the stated maturity date. Another 71 of the Balloon Loans identified in the prior paragraph, representing 31.2% of the Initial Mortgage Pool Balance, of which 48 mortgage loans are in Loan Group 1, representing 29.9% of the Initial Loan Group 1 Balance, and 23 mortgage loans are in Loan Group 2, representing 39.4% of the Initial Loan Group 2 Balance, respectively, require payments of interest only to be due until the expiration of a designated interest-only period that ends prior to the stated maturity date.

ARD Loans.    Nine (9) of the mortgage loans that we intend to include in the trust, representing 1.9% of the Initial Mortgage Pool Balance, all of which are in Loan Group 1 representing 2.2% of the Initial Loan Group 1 Balance, are ARD Loans and, as such, are characterized by the following features:

•  a maturity date that is at least 30 years or, in the case of three (3) underlying mortgage loans, collectively representing 0.5% of the Initial Mortgage Pool Balance, approximately 25 years following origination.
•  the designation of an anticipated repayment date that is 10 years following origination. The anticipated repayment date for each ARD Loan is listed on Annex A-1 to this prospectus supplement.
•  the ability of the related borrower to prepay the subject ARD Loan, without restriction, including without any obligation to pay a prepayment premium or a yield maintenance charge, at any time on or after a date that is 90 days or, in the case of one (1) underlying mortgage loan, representing 0.2% of the Initial Mortgage Pool Balance and 0.2% of the Initial Loan Group 1 Balance, 5 years 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 will be in excess of 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. Any Post-ARD Additional Interest accrued with respect to the subject ARD Loan following its anticipated repayment date will not be payable until the entire principal balance of that mortgage loan has been paid in full, but may compound at the new revised mortgage interest rate.
•  from and after its anticipated repayment date, the accelerated amortization of the subject ARD 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 payment, permitted operating expenses, capital expenditures and/or specified reserves, as the case may be. These accelerated amortization payments and the Post-ARD Additional Interest are considered separate from the monthly debt service payments due with respect to the subject ARD Loan.

With respect to six (6) of the ARD Loans, representing 1.4% of the Initial Mortgage Pool Balance and 1.6% of the Initial Loan Group 1 Balance payments of interest only are scheduled to be due on each due date until the expiration of a designated interest-only period that ends prior to the related anticipated repayment date.

The ratings on the respective classes of offered certificates do not represent any assessment of whether any ARD Loan will be paid in full by its anticipated repayment date or whether and to what extent Post-ARD Additional Interest will be received.

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Amortization of Principal.    The table below shows, in months, the original and, as of the cut-off date, the remaining amortization schedules and terms to maturity for the mortgage loans that we expect to back the offered certificates or the specified sub-groups of those mortgage loans.


  Balloon Loans ARD Loans All Mortgage Loans
  Mortgage
Pool		 Loan
Group
No. 1		 Loan
Group
No. 2		 Mortgage
Pool		 Loan
Group
No. 1		 Loan
Group
No. 2		 Mortgage
Pool		 Loan
Group
No. 1		 Loan
Group
No. 2
Original Term to Maturity (Mos.)  
 
 
 
 
 
 
 
 
Maximum 180
180
120
120
120
N/A
180
180
120
Minimum 60
60
60
120
120
N/A
60
60
60
Weighted Average 106
106
105
120
120
N/A
106
106
105
Remaining Term to Maturity (Mos.)  
 
 
 
 
 
 
 
 
Maximum 180
180
120
120
120
N/A
180
180
120
Minimum 56
57
56
118
118
N/A
56
57
56
Weighted Average 105
105
104
119
119
N/A
105
105
104
Original Amortization Term (Mos.)  
 
 
 
 
 
 
 
 
Maximum 360
360
360
360
360
N/A
360
360
360
Minimum 240
240
360
300
300
N/A
240
240
360
Weighted Average 343
339
360
346
346
N/A
343
340
360
Remaining Amortization Term (Mos.)  
 
 
 
 
 
 
 
 
Maximum 360
360
360
360
360
N/A
360
360
360
Minimum 237
237
355
298
298
N/A
237
237
355
Weighted Average 343
339
359
345
345
N/A
343
339
359

The calculation of original and remaining amortization terms in the foregoing table does not take into account 50 mortgage loans that we intend to include in the trust, collectively representing 55.9% of the Initial Mortgage Pool Balance, of which 38 mortgage loans are in Loan Group 1, representing 57.5% of the Initial Loan Group 1 Balance, and 12 mortgage loans are in Loan Group 2, representing 46.2% of the Initial Loan Group 2 Balance, respectively, that each provides for payments of interest only until the related stated maturity date. In addition, with respect to 71 other mortgage loans that we intend to include in the trust, representing 31.2% of the Initial Mortgage Pool Balance, of which 48 mortgage loans are in Loan Group 1, representing 29.9% of the Initial Loan Group 1 Balance, and 23 mortgage loans are in Loan Group 2, representing 39.4% of the Initial Loan Group 2 Balance, respectively, payments of interest only are made during a specified interest-only period following origination of that mortgage loan. The original and remaining amortization terms in the table above for the mortgage loans referred to in the prior sentence are, in each case, calculated assuming the amortization term commences as of the end of the interest-only period.

The following underlying mortgage loans permit additional amortization payments solely to the extent available from excess cash flow, as described below:

•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Wolverine Portfolio, where the related borrower is required to make additional monthly amortization payments of $48,719.31, solely to the extent available from excess cash flow, on and after the payment date in December 11, 2011, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments;
•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Redwood Portfolio II, where the related borrower is required to make additional monthly amortization payments of $22,144.02, solely to the extent available from excess cash flow, on and after the payment date in October 11, 2011, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments; and
•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Lakewood Apartment Portfolio, where the related borrower is required to make additional monthly amortization payments of $4,573.23, solely to the extent available from excess cash flow, on and after the payment date in November 11, 2009, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments.

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Some of the underlying mortgage loans will, in each case, provide for a recast of the amortization schedule and an adjustment of the scheduled 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

Prepayment Lock-out, Defeasance, Prepayment Consideration and Open Periods.    All of the mortgage loans that we intend to include in the trust provide for one or more of the following:

•  a prepayment lock-out period, during which the principal balance of a mortgage loan may not be voluntarily prepaid in whole or in part;
•  a defeasance period, during which voluntary principal prepayments are still prohibited, but the related borrower may obtain a release of the related mortgaged real property through defeasance;
•  a prepayment consideration period, during which voluntary prepayments are permitted, subject to the payment of a yield maintenance premium or other additional consideration for the prepayment; and
•  an open period, during which voluntarily prepayments are permitted without payment of any prepayment consideration.

Notwithstanding otherwise applicable lock-out periods, defeasance periods or prepayment consideration periods, certain prepayments of some of the underlying mortgage loans may occur under the circumstances described under ‘‘—Terms and Conditions of the Underlying Mortgage Loans—Prepayment Provisions—Other Prepayment Provisions’’ below. The prepayment terms of each of the mortgage loans that we intend to include in the trust are more particularly described in Annex A-1 to this prospectus supplement.

The table below shows, with respect to all of the mortgage loans we intend to include in the trust, the prepayment provisions in effect as of the cut-off date, the number of mortgage loans with each specified prepayment provision string that are in the entire mortgage pool, Loan Group 1 and Loan Group 2, and the percentage represented thereby of the Initial Mortgage Pool Balance, the Initial Loan Group 1 Balance and the Initial Loan Group 2 Balance.

Prepayment Provisions as of the Cut-off Date


Prepayment Provisions Number of Loans % Initial Mortgage
Pool Balance		 % Initial
Loan Group 1
Balance		 % Initial
Loan Group 2
Balance
Mortgage
Pool		 Loan
Group 1		 Loan
Group 2
L, D, O 102
79
23
66.8
67.5
62.5
YM, D or YM, O(1) 19
18
1
11.3
12.9
1.8
L, D 36
23
13
6.5
4.5
18.3
L, D, D or YM, O(1) 2
2
0
6.0
7.0
0.0
L, YM1%, O 12
9
3
4.3
4.1
5.7
YM1%, O 8
6
2
3.2
2.3
8.5
L, D or YM(1), O 1
1
0
0.9
1.1
0.0
L, YM1% 4
3
1
0.9
0.6
3.2
(1) The prepayment consideration period identified as ‘‘D or YM’’ is, for the purposes of this prospectus supplement, treated as a yield maintenace period.

For the purposes of the foregoing table, the letter designations under the heading ‘‘Prepayment Provisions’’ have the following meanings, as further described in the first paragraph of this ‘‘—Prepayments Provisions’’ section—

•  ‘‘L’’ means the mortgage loan is in a prepayment lock-out period;
•  ‘‘D’’ means the mortgage loan is in a defeasance period;
•  ‘‘YM’’ means the mortgage loan is in a prepayment consideration period during which the mortgage loan is prepayable together with payment of a yield maintenance charge;
•  ‘‘YM1%’’ means the mortgage loan is in a prepayment consideration period during which the mortgage loan is prepayable together with payment of the greater of (i) a yield maintenance charge and (ii) 1% of the prepaid amount;

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•  ‘‘D or YM’’ means the mortgage loan is in a period during which the borrower has the option to either defease the mortgage loan or prepay the mortgage loan together with payment of a yield maintenance charge; and
•  ‘‘O’’ means the mortgage loan is in an open period.

Set forth below is information regarding the remaining terms of the prepayment lock-out and prepayment lock-out/ defeasance periods, as applicable, for the 157 underlying mortgage loans for which a prepayment lock-out period is currently in effect:

•  the maximum remaining prepayment lock-out or prepayment lock-out/defeasance period as of the cut-off date is 120 months with respect to the entire mortgage pool, 120 months with respect to Loan Group 1 and 119 months with respect to Loan Group 2
•  the minimum remaining prepayment lock-out or prepayment lock-out/defeasance period as of the cut-off date is 21 months with respect to the entire mortgage pool, 21 months with respect to Loan Group 1 and 23 months with respect to Loan Group 2, and
•  the weighted average remaining prepayment lock-out or prepayment lock-out/defeasance period as of the cut-off date is 100 months with respect to the entire mortgage pool, 100 months with respect to Loan Group 1 and 97 months with respect to Loan Group 2.

Prepayment premiums and yield maintenance charges received on the underlying mortgage loans, whether in connection with voluntary or involuntary prepayments, will be allocated and paid to the holders of certain classes of the series 2006-C7 certificates, in the amounts and in accordance with the priorities described under ‘‘Description of the Offered Certificates— Payments—Payments of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement. However, limitations may exist under applicable state law on the enforceability of the provisions of the underlying mortgage loans that require payment of prepayment premiums or yield maintenance charges. In addition, in the event of a liquidation of a defaulted mortgage loan in the trust, prepayment consideration will be one of the last items to which the related liquidation proceeds will be applied. Neither we nor the underwriters make any representation or warranty as to the collectability of any prepayment premium or yield maintenance charge with respect to any of the mortgage loans included in the trust. See ‘‘Risk Factors—Some Provisions in the Mortgage Loans Underlying Your Offered Certificates May Be Challenged as Being Unenforceable—Prepayment Premiums, Fees and Charges’’ and ‘‘Legal Aspects of Mortgage Loans—Default Interest and Limitations on Prepayments’’ in the accompanying base prospectus.

Open prepayment periods generally begin not more than 12 months prior to stated maturity or, in the case of an ARD Loan, prior to the related anticipated repayment date, provided that in the case the mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as PrimaPharm Life Science Building, which mortgage loan represents 0.2% of the Initial Mortgage Pool Balance and 0.2% of the Initial Loan Group 1 Balance, the related open prepayment period begins 5 years prior to the related anticipated repayment date.

Other Prepayment Provisions.    Generally, the mortgage loans that we intend to include in the trust provide that condemnation proceeds and insurance proceeds may be applied to reduce the mortgage loan’s principal balance, to the extent such funds will not be used to repair the improvements on the mortgaged real property or given to the related borrower, in many or all cases without prepayment consideration. In addition, some of the mortgage loans that we intend to include in the trust may also in certain cases permit, in connection with the lender’s application of insurance or condemnation proceeds to a partial prepayment of the related mortgage loan, the related borrower to prepay the entire remaining principal balance of the mortgage loan, in many or all cases without prepayment consideration. Investors should not expect any prepayment consideration to be paid in connection with any partial or full prepayment described in this paragraph. With respect to certain mortgage loans, particularly those secured in whole or in part by a ground lease, single tenant mortgage loans and other mortgage loans which require that insurance and/or condemnation proceeds be used to repair or restore the mortgaged real property, such proceeds may be required to be used to restore the related mortgaged real property rather than to prepay that mortgage loan or, where a ground lease is involved, may be payable in whole or in part to the ground lessor.

The Midtown Plaza Borrower has the right at any time to obtain the release of a specified portion of the Midtown Plaza Mortgaged Property from the lien of the security instrument upon the satisfaction of certain conditions set forth in the related loan agreement, including, without limitation, payment of the release price allocated to the parcel to be released as set forth in the related loan agreement, together with, if such prepayment is made prior to April 11, 2011 a yield maintenance premium, as further described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Midtown Plaza Mortgage Loan—Development Parcel Release.’’

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With respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as 695/710 Route 46, which mortgage loan represents 1.2% of the Initial Mortgage Pool Balance and 1.4% of the Initial Loan Group 1 Balance, the borrower is permitted to obtain the release of a specified portion of the related mortgaged real property provided certain conditions are satisfied, including the achievement of certain DSCR and LTV Ratio tests, the payment of 110% of the allocated loan amount for such parcel and the payment of a prepayment consideration.

Defeasance Loans.    One-hundred forty (140) of the mortgage loans that we intend to include in the trust, representing 79.3% of the Initial Mortgage Pool Balance, of which 104 mortgage loans are in Loan Group 1, representing 79.0% of the Initial Loan Group 1 Balance, and 36 mortgage loans are in Loan Group 2, representing 80.8% of the Initial Loan Group 2 Balance, respectively, permit the respective borrowers (subsequent to an initial prepayment lock-out period, which is currently in effect, and subject to the satisfaction of various conditions) to defease the subject mortgage loan in whole or, in some cases, in part, during a period that voluntary prepayments are prohibited, by pledging to the holder of the mortgage loan the requisite amount of Government Securities, and thereby obtain a release of the related mortgaged real property or, if applicable, one or more of the related mortgaged real properties. As to any such mortgage loan, the permitted defeasance period does not begin prior to the second anniversary of the Issue Date.

In general, the Government Securities that are to be delivered in connection with the defeasance of any underlying 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 or, if applicable, the related anticipated repayment date or, in some instances, the expiration of the prepayment lock-out period; and
•  will, in the case of each due date, be in a total amount equal to or greater than the scheduled debt service payment, including any applicable balloon payment, scheduled to be due or deemed due on that date, with any excess to be returned to the related borrower or a successor borrower.

Each group of cross-collateralized mortgage loans and each individual multi-property mortgage loan that allows for partial defeasance of the aggregate debt, and that we intend to include in the trust, provides that in the event of a defeasance of less than the entire aggregate debt, one or more of the related mortgaged real properties would be released and the cross-collateralization would terminate as to the released property or properties.

If fewer than all of the mortgaged real properties securing any particular multi-property mortgage loan or group of cross-collateralized mortgage loans are permitted by the related loan documents to be released in connection with any defeasance, then the borrower generally must deliver one of the following: (a) an amount sufficient to purchase government securities that provide payments equal to at least 100% to 125% of the scheduled principal and interest payments for the mortgage loan (or portion thereof) being defeased; or (b) an amount sufficient to purchase government securities that provide payments equal to the lesser of (i) 100% to 125% of the scheduled principal and interest payments for the mortgage loan (or portion thereof) being defeased and (ii) the total of all remaining scheduled payments on, as applicable, all of the subject cross-collateralized mortgage loans or the entire individual multi-property mortgage loan (assuming no defeasance has occurred), less all scheduled defeasance payments to be made under substitute notes delivered in connection with the defeasance.

In connection with any delivery of defeasance collateral, the related borrower will be required to deliver a security agreement granting the trust a first priority security interest in the collateral, together with an opinion of counsel confirming the first priority status of the security interest. Also, a borrower will generally be required to deliver a certification from an independent accounting firm to the effect that the defeasance collateral is sufficient to make all scheduled debt service payments under the related mortgage loan through maturity or, if applicable, the related anticipated repayment date.

In general, the defeasance collateral will consist of U.S. Treasury securities. However, subject to obtaining ratings confirmations from the related rating agencies, some borrowers may be entitled to defease their respective mortgage loans with other types of obligations that constitute Government Securities.

Due-on-Sale and Due-on-Encumbrance Provisions.    All of the mortgage loans that we intend to include in the trust contain both a due-on-sale clause and a due-on-encumbrance clause. In general, except for the permitted transfers or encumbrances discussed below in this ‘‘—Due-on-Sale and Due-on-Encumbrance Provisions’’ subsection, these clauses either:

•  permit the holder of the related mortgage to accelerate the maturity of the mortgage loan if, without the consent of the holder of the mortgage, the borrower sells or otherwise transfers or encumbers the corresponding mortgaged real property, or

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•  prohibit the borrower from transferring or encumbering the corresponding mortgaged real property without the consent of the holder of the mortgage.

See, however, ‘‘Risk Factors—The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable—Delinquencies, Defaults and Losses on the Underlying Mortgage Loans May Affect the Amount and Timing of Payments on Your Offered Certificates; and the Rate and Timing of Those Delinquencies and Defaults, and the Severity of Those Losses, Are Highly Unpredictable’’ and ‘‘—Some Provisions in the Mortgage Loans Underlying Your Offered Certificates May Be Challenged as Being Unenforceable—Due-on-Sale and Debt Acceleration Clauses’’ and ‘‘Legal Aspects of Mortgage Loans—Due-on-Sale and Due-on-Encumbrance Provisions’’ in the accompanying base prospectus.

In addition, all of the mortgage loans that we intend to include in the trust 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 one or both of the following—
1.  confirmation 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 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 borrower or a principal of the borrower;
•  transfers by the borrower of the corresponding mortgaged real property to specified entities or types of entities;
•  issuance by the borrower of new partnership or membership interests;
•  changes in ownership between existing shareholders, partners or members, as applicable, of the related borrower;
•  a transfer of non-controlling ownership interests in the related borrower;
•  a transfer of controlling ownership interests in the related borrower to specified persons, entities or types of entities and/or subject to the satisfaction of certain gross asset tests or other conditions specified in the related mortgage loan documents;
•  transfers of interests in the related borrower for estate planning purposes or otherwise upon the death of a principal; or
•  other transfers similar in nature to the foregoing.

Mortgage Pool Characteristics

A detailed presentation of various characteristics of the mortgage loans that we intend to include in the trust, and of the corresponding mortgaged real properties, on an individual basis and in tabular format, is shown on Annex A-1, Annex A-2, Annex A-3, Annex A-4, Annex A-5, Annex A-6 and Annex B to this prospectus supplement. The statistics in the tables and schedules on Annex A-1, Annex A-2, Annex A-3, Annex A-4, Annex A-5, Annex A-6 and Annex B 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 the underwriters.

Significant Underlying Mortgage Loans

General.    Set forth below are summary discussions of the ten (10) largest underlying mortgage loans and/or groups of cross-collateralized underlying mortgage loans that we intend to include in the trust.

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I. The 520 Madison Avenue Mortgage Loan


Mortgage Loan Information
Cut-off Date Balance: $475,000,000
Loan per Square Foot: $478
% of Initial Mortgage Pool Balance: 15.7%
Shadow Rating (S&P/Fitch): BBB+/BBB+
Loan Purpose: Refinance
Mortgage Interest Rate: 5.922989% per annum
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: October 11, 2016
Maturity Balance: $475,000,000
Borrower: 520 Madison Owners, L.L.C.
Sponsor: Certain principals of Tishman Speyer Properties, Henry Crown & Company and Two Rock Realty Associates, L.P.
Defeasance/Prepayment: Defeasance permitted two years after Issue Date. Prepayment without penalty permitted three months prior to maturity date.
Up-Front Reserves: Unfunded Tenant Obligations Reserve(2)
Ongoing Reserves: Tax and Insurance Reserve(3)
  Replacement Reserve(4)
  Leasing Reserve(5)
Lockbox: Hard(6)
Other Secured Debt: $125,000,000 Aggregate Mezzanine Debt(7)

Mortgaged Property Information
Single Asset/Portfolio: Single Asset
Property Type: Office
Location: New York, New York
Year Built: 1982
Year Renovated: NAP(1)
Square Feet: 994,757
Occupancy: 99.5%
Occupancy Date: January 1, 2007
Ownership Interest: Fee
Property Management: Tishman Speyer Properties, L.P., an affiliate of the borrower
U/W NCF: $49,658,881(8)
U/W NCF DSCR: 1.74x(9)
Cut-off Date U/W NCF DSCR: 1.74x(9)
Appraised Value: $1,100,000,000
Appraisal As of Date: August 22, 2006
Cut-off Date LTV Ratio: 43.2%
Maturity LTV Ratio: 43.2%
 
(1) NAP means not applicable.
(2) The 520 Madison Avenue Borrower has deposited $16,519,669 into an unfunded tenant obligations reserve account to pay for (i) up to $11,487,769 of the costs of tenant allowances, tenant improvements and leasing commissions related to specified tenants and (ii) up to $5,031,900 of tenant allowances, tenant improvements and leasing costs related to the re-leasing of space at the 520 Madison Avenue Mortgaged Property that is vacated by tenants during calendar years 2007 and 2008 as a result of the scheduled expiration of such tenants’ leases.
(3) The 520 Madison Avenue Borrower is required to make monthly deposits into a tax and insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by the lender to be payable, during the following 12 months and one-twelfth of an amount which would be sufficient to pay the insurance premiums due relating to the renewal of insurance policies. Notwithstanding the foregoing, so long as the 520 Madison Avenue Borrower provides evidence of a blanket insurance policy covering the 520 Madison Avenue Mortgaged Property, as approved by the lender, the monthly insurance escrow payments will not be required.
(4) The 520 Madison Avenue Borrower is required to make monthly deposits into a replacement reserve account in the amount of $13,100 to pay for the costs of replacements and repairs required to be made to the 520 Madison Avenue Mortgaged Property during each calendar year, including, without limitation, proposed capital replacements and improvements in the 520 Madison Avenue Borrower’s annual operating budget.
(5) The 520 Madison Avenue Borrower is required to deposit all lease termination payments in excess of $750,000 into a leasing reserve account. In lieu of making the payments to the leasing reserve account, provided no uncured event of default exists, the 520 Madison Avenue Borrower may deliver to the lender a letter of credit as security for the 520 Madison Avenue Borrower’s lease termination obligations.
(6) See ‘‘—Lockbox’’ below.
(7) Represents two mezzanine loans in the aggregate principal amount, as of the cut-off date, of $125,000,000. See ‘‘—Mezzanine Financing’’ below.
(8) Reflects in-place U/W NCF. U/W NCF is projected to be $59,666,856 based on assumed mark-to-market rent adjustments applied to below-market tenant leases, projected increase of building square footage by approximately 53,174 square feet upon building remeasurement and certain other lease-up assumptions.
(9) Based on in-place U/W NCF and calculated based on the annual interest-only payments. The U/W DSCR based on the projected U/W NCF of $59,666,856 (described in footnote (8) above) is 2.09x.

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Major Tenant Information
Tenant(1) Principal
Business		 Approximate
Square Feet		 % Total
Square
Feet		 % Total Base
Revenues(2)		 Rent
PSF(3)		 Rent
Per
Annum		 Ratings(4) Lease
Expiration Date
Jefferies & Company, Inc. Investment Bank 276,636
27.8
%
 28.6
%
 $ 67.86
$ 18,773,117
BBB+/BBB+ 5/20/2021(5)
Mitsubishi International Corporation Global Trading 89,302
9.0
8.3
$ 61.25
5,469,933
A/A+ 4/20/2007(6)
Metallgesellschaft Corp. Industrial Conglomerate 78,000
7.8
6.9
$ 57.75
4,504,500
NR/NR 1/20/2013
CA, Inc. Information Technology 71,830
7.2
8.2
$ 75.36
5,412,769
BB/BB+ 9/20/2020
Freshfields Bruckhaus Deringer LLP International Law Firm 44,800
4.5
4.8
$ 70.50
3,158,400
NR/NR 10/20/2008(7)
Total   560,568
56.3
%
 56.8
%
  
$ 37,318,719
   
(1) Ranked by approximate square feet.
(2) The percentages of total base revenues and rent per annum are based on in-place underwritten base rental revenues.
(3) Reflects in-place base rent.
(4) Credit ratings are by S&P and Fitch, respectively, and may reflect the rating of the parent company even though the parent company may have no obligations under the related lease. NR means not rated.
(5) Jefferies & Company Inc.’s lease expiration includes 111,945 square feet expiring May 20, 2021, 95,833 square feet expiring October 20, 2014 and 68,858 square feet expiring September 20, 2014.
(6) Mitsubishi International Corporation’s lease expiration includes 66,431 square feet expiring April 20, 2007 and 22,871 square feet expiring May 20, 2007.
(7) Freshfields Bruckhaus Deringer LLP’s lease expiration includes 22,400 square feet expiring October 20, 2008 and 22,400 square feet expiring July 20, 2015.

Historical Annual Rent Per Square Foot Information(1)
2004 2005 2006
$50.18 $ 58.74
$ 54.64
(1) The effective annual rent based on base rent information provided by the 520 Madison Avenue Borrower.

Lease Expiration Information
Year Approximate #
of Expiring
Tenants		 Approximate
Expiring
Square Feet		 As % of
Total
Square Feet		 Cumulative %
of Total
Square Feet		 Approximate
Expiring Base
Revenues(1)		 As % of Total
Base
Revenues(1)		 Cumulative % of
Total Base
Revenues(1)
2006 0
0
0.0
%
 0.0
%
 $ 0
0.0
%
 0.0%
2007 2
111,702
11.2
11.2
%
 7,015,533
10.7
10.7%
2008 11
175,584
17.7
28.9
%
 9,181,558
14.0
24.7%
2009 0
0
0.0
28.9
%
 0
0.0
24.7%
2010 0
0
0.0
28.9
%
 0
0.0
24.7%
2011 2
17,922
1.8
30.7
%
 1,974,894
3.0
27.7%
2012 4
64,166
6.5
37.1
%
 4,103,288
6.2
33.9%
2013 2
100,871
10.1
47.3
%
 6,288,438
9.6
43.5%
2014 8
245,906
24.7
72.0
%
 15,622,961
23.8
67.3%
2015 3
48,361
4.9
76.9
%
 3,661,555
5.6
72.9%
2016 and beyond 9
224,863
22.6
99.5
%
 17,807,414
27.1
100.0%
Vacant —
5,382
0.5
100.0
%
 0
—
 
Total 41
994,757
100.0
%
  
$ 65,655,641
100.0
%
  
(1) Based on in-place underwritten base rental revenues.

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The Borrower and Sponsor.    The 520 Madison Avenue Borrower is 520 Madison Owners, L.L.C., a Delaware limited liability company, which is sponsored by a partnership comprised of 520 Madison Limited Partnership, an affiliate of certain principals of Tishman Speyer, Henry Crown & Company, a privately held Chicago-based investment firm and Two Rock Realty Associates, L.P. Tishman Speyer was founded in 1978 by Robert Tishman. Tishman Speyer operates from its headquarters in Manhattan and from seventeen other offices worldwide including offices in Frankfurt, Berlin, London, Paris, Madrid, Bangalore, Sao Paulo and Sydney, as well as eight other offices in the United States. Since its formation, Tishman Speyer has developed or acquired a portfolio of over 77 million square feet of constructed area valued at over $24 billion. In addition to well known developments of high rise office buildings in major urban locations, Tishman Speyer also creates mixed-use, retail, residential and entertainment centers, as well as mid and low rise office buildings.

The Mortgage Loan.    The 520 Madison Avenue Mortgage Loan was originated on September 26, 2006 and has a cut-off date balance of $475,000,000. The 520 Madison Avenue Mortgage Loan is a ten-year loan with a stated maturity date of October 11, 2016. The 520 Madison Avenue Mortgage Loan accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 5.922989% per annum. On the eleventh day of each month through but excluding the stated maturity date, the 520 Madison Avenue Borrower is required to make interest-only payments on the 520 Madison Avenue Mortgage Loan. The principal balance of the 520 Madison Avenue Mortgage Loan, plus all accrued and unpaid interest thereon, will be due on the stated maturity date.

The 520 Madison Avenue Borrower is prohibited from voluntarily prepaying the 520 Madison Avenue Mortgage Loan, in whole or in part, prior to July 11, 2016. From and after July 11, 2016, the 520 Madison Avenue Borrower may prepay the 520 Madison Avenue Mortgage Loan, in whole or in part, without payment of any prepayment consideration, provided that each mezzanine borrower, under its respective 520 Mezzanine Loan (as defined under ‘‘—Intercreditor Agreement’’ below) simultaneously prepays the related 520 Mezzanine Loan by a dollar amount which bears the same relation to the principal amount of the subject 520 Mezzanine Loan outstanding immediately prior to such prepayment as the amount of the 520 Madison Avenue Mortgage Loan prepaid bears to the principal amount of the 520 Madison Avenue Mortgage Loan outstanding immediately prior to such prepayment.

The 520 Madison Avenue Borrower may defease the 520 Madison Avenue Mortgage Loan in whole only at any time after the expiration of two years following the Issue Date, and by doing so obtain the release of the 520 Madison Avenue Mortgaged Property. A defeasance will be effected by the 520 Madison Avenue Borrower’s pledging substitute collateral that consists of direct non-callable obligations of the United States of America or other obligations which are ‘‘government securities’’ within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 that produce payments which replicate the payment obligations of the 520 Madison Avenue Borrower under the 520 Madison Avenue Mortgage Loan and are sufficient to pay off the 520 Madison Avenue Mortgage Loan in its entirety, at the 520 Madison Avenue Borrower’s election, on July 11, 2016, August 11, 2016, September 11, 2016 or on the stated maturity date. The 520 Madison Avenue Borrower’s right to defease the entire 520 Madison Avenue Mortgage Loan is subject to, among other things, the applicable rating agencies each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency. As a condition to the defeasance of the entire 520 Madison Avenue Mortgage Loan, the borrower under each 520 Mezzanine Loan must simultaneously prepay its related 520 Mezzanine Loan.

The Mortgaged Property.    The 520 Madison Avenue Mortgage Loan is secured by a first mortgage lien on the fee simple interest of the 520 Madison Avenue Borrower in the 520 Madison Avenue Mortgaged Property, a 43-story Class A office building located along the western block front of Madison Avenue between East 53 and East 54 Streets. Built in 1982, the 520 Madison Avenue Mortgaged Property contains 994,757 square feet of net rentable area. The 520 Madison Avenue Mortgaged Property is leased to a diverse mix of tenants including, Jefferies & Company, Inc. (which is rated BBB+/BBB+ by S&P and Fitch, respectively) with 276,636 square feet (27.8% of total space), Mitsubishi International Corporation (which is rated A/A+ by S&P and Fitch, respectively) with 89,302 square feet (9.0% of total space), Metallgesellschaft Corp. with 78,000 square feet (7.8% of total space), CA, Inc., formerly known as Computer Associates International, Inc. (which is rated BB/BB+ by S&P and Fitch, respectively) with 71,830 square feet (7.2% of total space) and Freshfields Bruckhaus Deringer LLP, the United States branch of the German law firm of the same name with 44,800 square feet (4.5% of total space). As of January 1, 2007, based on square footage leased, occupancy at the 520 Madison Avenue Mortgaged Property was 99.5%. Based on historical financial information provided by the 520 Madison Avenue Borrower, the net operating income for the 520 Madison Avenue Mortgaged Property was $64,671,135 (which includes $28,332,204 of lease termination income) for fiscal year 2005, and $20,949,852 for the interim period January through June 2006.

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The following is an occupancy chart for the 520 Madison Avenue Mortgaged Property, as reported by the 520 Madison Avenue Borrower.


Historical Occupancy Information
Year Occupancy
2006 94.0%
2005 87.2%
2004 97.1%
2003 97.5%
2002 99.7%

The Market.    According to information in the appraisal performed in connection with the origination of the 520 Madison Avenue Mortgage Loan, the 520 Madison Avenue Mortgaged Property is located in the Plaza District submarket of Midtown Manhattan, which is part of the overall New York City office market. The Plaza District submarket, bounded by East 54 Street to the south, East 61 Street to the north, Park Avenue to the east and Sixth Avenue to the west is one of the smaller submarkets within the Midtown Manhattan submarket. The appraisal further reports that as of the second quarter 2006, the Plaza District submarket contained 11.8 million square feet. According to the appraisal, the Plaza District submarket has consistently achieved higher rental rates compared to the overall Midtown Manhattan market and lower vacancy rates. As such, this submarket is considered to be one of the strongest markets in Midtown Manhattan. As reported in the appraisal, the second quarter 2006 average asking rent for the Plaza District submarket was $80.56 per square foot, as opposed to $58.55 per square foot for the Midtown Manhattan submarket and $47.30 per square foot for the overall Manhattan market. The vacancy rate for the same period for the Plaza District submarket was 6.6% compared to 6.3% for the overall Manhattan market.

Lockbox.    The 520 Madison Avenue Borrower is required to cause all gross income from the 520 Madison Avenue Mortgaged Property to be deposited directly into a lockbox account under the control of the lender, which funds will be disbursed as follows: (1) tax and insurance amounts, to the tax and insurance accounts; (2) monthly debt service, to the debt service account; (3) replacement reserve amounts, to the replacement reserve account; (4) cash management fees, to the lockbox bank; (5) default interest or any late charges, to the debt service account; (6) if no 520 Madison Avenue Mortgage Loan event of default exists, monthly debt service due under each 520 Mezzanine Loan (provided, in the case of the 520 Mezzanine B Loan, that no event of default exists under the 520 Mezzanine A Loan), together with any late payment charges or default interest and any related Net Liquidation Proceeds After Debt Service (defined below), to the applicable 520 Mezzanine Loan account; (7) if no 520 Madison Avenue Mortgage Loan event of default exists, during (a) a 520 Madison Avenue Low DSCR Period (defined below) or (b) a 520 Mezzanine Loan event of default, first, all monthly costs and expenses approved by each of the 520 Mezzanine Lenders (as defined below) to the borrower expense account and, second, certain extraordinary expenses approved by each of the 520 Mezzanine Lenders to the borrower expense account; (8) if no 520 Madison Avenue Mortgage Loan event of default exists, first, any remaining amounts during a 520 Mezzanine A Loan event of default, to the 520 Mezzanine A loan account and, second, any remaining amounts during a 520 Mezzanine B Loan event of default, to the 520 Mezzanine B loan account; and (9) if no 520 Madison Avenue Mortgage Loan event of default exists and no 520 Mezzanine Loan event of default exists, any remaining amounts to the 520 Madison Avenue Borrower.

‘‘520 Madison Avenue Low DSCR Period’’ will mean, generally, the period during which notice has been provided (and such notice has not been superseded) to the lender that one of the 520 Mezzanine Lenders has determined that the aggregate debt service coverage ratio for the 520 Madison Avenue Mortgage Loan and any 520 Mezzanine Loan that remains outstanding, for the 12-month period ending on the last day of any calendar quarter ending on or after September 30, 2006 is less than 1.05x as calculated for two consecutive calendar quarters. Such period will end when notice has been provided (and such notice has not been superseded) to the lender that the applicable 520 Mezzanine Lender has determined that the aggregate debt service coverage ratio for the 520 Madison Avenue Mortgage Loan and any 520 Mezzanine Loan that remains outstanding, for the 12-month period ending on the last day of any calendar quarter ending on or after September 30, 2006 is equal to or greater than 1.05x as calculated for two consecutive calendar quarters.

‘‘Net Liquidation Proceeds After Debt Service’’ means all amounts paid to or received by or on behalf of the 520 Madison Avenue Borrower in connection with a casualty, condemnation, sale, transfer or refinancing of the 520 Madison Avenue Mortgaged Property less certain costs, expenses and amounts specifically set forth in the related 520 Mezzanine Loan documents.

Terrorism Coverage.    The 520 Madison Avenue Borrower is required under the related loan documents to maintain comprehensive all risk insurance (including, without limitation, comprehensive boiler and machinery insurance) and

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insurance against certain acts of terrorism; provided, that the total annual premium required to be paid by the 520 Madison Avenue Borrower for the above described insurance (and any additional property insurance related thereto that may be required by lender) will not exceed the Insurance Premium Cap per year. To the extent that the cost of the amount of the above described insurance exceeds the premium limit of the Insurance Premium Cap in any year, the 520 Madison Avenue Borrower is required, for such year, to obtain the maximum amount of all risk, comprehensive boiler and machinery, business interruption/loss of rents and terrorism coverage that can be obtained for an annual premium equal to the Insurance Premium Cap and the relative amounts of such insurance coverage will be determined by the 520 Madison Avenue Borrower in its good faith business judgment to be the optimal insurance coverage available.

‘‘Insurance Premium Cap’’ means (a) for so long as one or more of certain specified Tishman Speyer control persons maintains control over the day-to-day management and operations of the 520 Madison Avenue Mortgaged Property, the 520 Madison Avenue Borrower and each 520 Mezzanine Loan borrower, $1,400,000 or (b) if one or more of certain specified control persons does not maintain control over the day-to-day management and operations of the 520 Madison Avenue Mortgaged Property, the 520 Madison Avenue Borrower and each 520 Mezzanine Loan borrower, $1,750,000, and in either case, as adjusted to reflect any increase during the preceding year in the Consumer Price Index.

Mezzanine Financing.    As of the cut-off date, certain direct and indirect owners of the 520 Madison Avenue Borrower have respectively incurred the following levels of mezzanine financing: (i) a mezzanine loan in the principal amount of $50,000,000 (the ‘‘520 Mezzanine A Loan’’); and (ii) a mezzanine loan in the principal amount of $75,000,000 (the ‘‘520 Mezzanine B Loan’’ and, together with the 520 Mezzanine A Loan, the ‘‘520 Mezzanine Loans’’). The current lender on each of the 520 Mezzanine Loans is an affiliate of the related mortgage loan seller but such loans may be transferred to a third party in the future. Each of the 520 Mezzanine Loans matures on October 11, 2016. On the eleventh day of each month, but excluding October 11, 2016, each 520 Mezzanine Loan borrower is required to make interest-only payments based on a fixed-rate per annum on its related 520 Mezzanine Loan. The remaining principal balance of each 520 Mezzanine Loan, plus all accrued and unpaid interest thereon, is due on the stated maturity date. Each of the 520 Mezzanine Loans is secured by the related loan documents which include a pledge of 100% of the equity ownership interests in the 520 Madison Avenue Borrower or the borrower under the 520 Mezzanine A Loan, as applicable.

Mezzanine Intercreditor Agreement.    Each 520 Mezzanine Loan lender is individually and collectively, as the context may require, referred to as the ‘‘520 Mezzanine Lender’’. The mortgage lender has entered into an intercreditor agreement (the ‘‘520 Intercreditor Agreement’’) with each 520 Mezzanine Lender, that sets forth the relative priorities between the 520 Madison Avenue Mortgage Loan and each 520 Mezzanine Loan. The 520 Intercreditor Agreement provides that, among other things:

•  Each 520 Mezzanine Loan is generally subordinate to the 520 Madison Avenue Mortgage Loan in right of payment; provided, however, that so long as no event of default has occurred and is continuing with respect to the 520 Madison Avenue Mortgage Loan, subject to the terms of the 520 Intercreditor Agreement, each 520 Mezzanine Lender may accept payments due and payable from time to time under the loan documents evidencing or securing its respective 520 Mezzanine Loan and prepayments of its respective 520 Mezzanine Loan made in accordance with loan documents evidencing or securing its respective 520 Mezzanine Loan.
•  Upon an ‘‘event of default’’ under a 520 Mezzanine Loan, the applicable 520 Mezzanine Lender will have the right, subject to the terms of the 520 Intercreditor Agreement, to select a replacement manager for the 520 Madison Avenue Mortgaged Property.
•  Each 520 Mezzanine Lender has the right to receive notice of any event of default under the 520 Madison Avenue Mortgage Loan and the right to cure any monetary default within a period ending 10 business days after the receipt of such notice; provided that no 520 Mezzanine Lender will have the right to cure with respect to monthly scheduled debt service payments for a period of more than six consecutive months unless a 520 Mezzanine Lender has commenced and is continuing to diligently pursue its rights against the collateral for its respective 520 Mezzanine Loan. In addition, if the default is of a non-monetary nature, each 520 Mezzanine Lender will have until 10 business days after the later of (i) receipt of such notice or (ii) the expiration of the 520 Madison Avenue Borrower’s cure period to cure such non-monetary default under the 520 Madison Avenue Mortgage Loan documents; provided, that, if such non-monetary default is susceptible of cure but cannot reasonably be cured within that period (or is not susceptible of cure without foreclosure on the collateral for a 520 Mezzanine Loan) then, subject to certain conditions, each 520 Mezzanine Lender will be given an additional period of time as is reasonably necessary in the exercise of due diligence to cure such non-monetary default or to pursue such foreclosure.

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•  If the 520 Madison Avenue Mortgage Loan has been accelerated, or any proceeding to foreclose or otherwise enforce the mortgage or other security for the 520 Madison Avenue Mortgage Loan has been commenced, a proceeding or other action relating to insolvency, reorganization, or relief of debtors has been commenced against the 520 Madison Avenue Borrower or its general partner, or if the 520 Madison Avenue Mortgage Loan is a ‘‘specially serviced’’ loan and a material event of default under the related 520 Madison Avenue Mortgage Loan documents has occurred or is reasonably foreseeable, then, subject to the terms of the 520 Intercreditor Agreement, each 520 Mezzanine Lender will have the right to purchase the 520 Madison Avenue Mortgage Loan in whole for a price equal to the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon (including, without limitation, any advances and post-petition interest, but excluding any liquidated damages, acceleration prepayment premium, prepayment fee, premiums, yield maintenance charge, late charges, or any default interest relating to any defaults cured by the 520 Mezzanine Lender, as provided in the 520 Intercreditor Agreement), any protective advances made by the mortgagee and any interest on any advances and, if a 520 Mezzanine Lender fails to purchase the 520 Madison Avenue Mortgage Loan within 60 days of receipt of the mortgage lender’s notice of such purchase option, special servicing and liquidation fees payable to any special servicer for any related securitization trust.
•  The loan documents evidencing and securing each 520 Mezzanine Loan generally may be modified without the mortgage lender’s consent, except that certain provisions may not be modified without the 520 Madison Avenue Mortgage Loan lender’s consent, including, without limitation, a material increase in any monetary obligations of any 520 Mezzanine Loan borrower. Notwithstanding the foregoing, upon the occurrence of an event of default under the loan documents evidencing or securing a 520 Mezzanine Loan, the applicable 520 Mezzanine Lender will be permitted, subject to the satisfaction of certain conditions, to amend or modify the applicable 520 Mezzanine Loan, in a manner that increases the interest rate thereunder.

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II. The 1211 Avenue of the Americas Mortgage Loan


Mortgage Loan Information
Cut-off Date Balance: $275,000,000(1)
Loan per Square Foot: $360(2)
% of Initial Mortgage Pool Balance: 9.1%
Shadow Rating (S&P/Fitch): BBB−/BBB−
Loan Purpose: Acquisition
Mortgage Interest Rate: 6.41787% per annum
Interest Calculation: Actual/360
First Payment Date: October 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP (3)
Hyperamortization: NAP(3)
Maturity Date: September 11, 2016
Maturity Balance: $275,000,000
Borrower: 1211 6th Avenue Property Owner, L.L.C.
Sponsor: Beacon Capital Strategic Partners IV, L.P.
Defeasance/Prepayment: Defeasance permitted two years after the Issue Date. Prepayment without penalty permitted three months prior to maturity date.
Up-Front Reserves: Required Repair Reserve(4)
  Ropes & Gray Reserve(5)
  Rollover Reserve(6)
Ongoing Reserves: Tax Reserve(7)
  Insurance Reserve(8)
Lockbox: Hard(9)
Other Secured Debt: $400,000,000 Pari Passu Non-Trust Loan(1)
$275,000,000 Aggregate Mezzanine Debt(10)
$25,000,000 Unfunded Junior
Mezzanine Financing(10)

Mortgaged Property Information
Single Asset/Portfolio: Single Asset
Property Type: Class A Office
Location: New York, New York
Year Built: 1973
Year Renovated: 1991, 2006
Square Feet: 1,876,972
Occupancy: 99.9%
Occupancy Date: August 1, 2006
Ownership Interest: Fee
Property Management: 1211 6th Avenue Property
Management LLC, an affiliate of
the borrower(11)
U/W NCF: $81,661,628(12)
U/W NCF DSCR: 1.86x(13)
Cut-off Date U/W NCF DSCR: 1.86x(13)
Appraised Value: $1,590,000,000
Appraisal As of Date: August 1, 2006
Cut-off Date LTV Ratio: 42.5%(14)
Maturity LTV Ratio: 42.5%(14)
   
(1) The 1211 Avenue of the Americas Mortgage Loan is part of the 1211 Avenue of the Americas Loan Combination that also includes the 1211 Avenue of the Americas Non-Trust Loan in the principal amount of $400,000,000.
(2) Based on a loan amount comprised of the entire 1211 Avenue of the Americas Loan Combination of $675,000,000. The amount of $675,000,000 is comprised of two pari passu A notes.
(3) NAP means not applicable.
(4) At origination, the 1211 Avenue of the Americas Borrower deposited $5,814,804 into a required repairs reserve account to pay for the modernization of elevators and escalators and renovations to the outdoor plaza at the 1211 Avenue of the Americas Mortgaged Property.
(5) At origination, the 1211 Avenue of the Americas Borrower deposited $23,293,997 into the Ropes and Gray reserve account. Provided no event of default exists, lender will direct the agent under the lockbox account to transfer $1,294,111 from the Ropes and Gray reserve account to the lockbox account on the first day of each month up to and including February 1, 2008.
(6) At origination, the 1211 Avenue of the Americas Borrower deposited $2,518,475 into a rollover reserve account to pay for the costs of tenant concessions, leasing costs and other related costs.
(7) Following the occurrence and during the continuance of an event of default or for so long as the DSCR for any fiscal year is less than 1.05x, the 1211 Avenue of the Americas Borrower will make monthly deposits into a tax reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by lender to be payable during the following 12 months.
(8) Following the occurrence and during the continuance of an event of default or for so long as the DSCR for any fiscal year is less than 1.05x, the 1211 Avenue of the Americas Borrower will make monthly deposits into an insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the insurance premiums due for the renewal of insurance policies. Notwithstanding the foregoing, the 1211 Avenue of the Americas Borrower will not be required to deposit insurance funds if the 1211 Avenue of the Americas Borrower delivers satisfactory evidence to lender that all such insurance premiums have been previously paid.
(9) See ‘‘—Lockbox’’ below.

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(10) Represents the aggregate of three mezzanine loans. In addition, there is a $25,000,000 unfunded portion of a junior mezzanine facility that is available to be drawn upon. Following the funding and repayment or termination of the $25,000,000 junior mezzanine facility, additional mezzanine financing is permitted up to $95,000,000 subject to DSCR and LTV tests. See ‘‘—Mezzanine Financing’’ below.
(11) The 1211 Avenue of the Americas Property Manager has sub-contracted the management and leasing of the 1211 Avenue of the Americas mortgaged property to Cushman & Wakefield Inc., a third party property manager.
(12) Reflects in-place U/W NCF. Projected U/W NCF is $89,396,417 based on assumed mark-to-market rent adjustment applied to below-market tenant leases and certain other lease-up assumptions.
(13) Based on in-place U/W NCF and calculated based on the annual interest-only payments and a loan amount comprised of the entire 1211 Avenue of the Americas Loan Combination. The U/W DSCR based on the projected U/W NCF of $89,396,417 (described in footnote (12) above) is 2.04x.
(14) The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire 1211 Avenue of the Americas Loan Combination.

Major Tenant Information
Tenant(1) Approximate
Square Feet		 % Total
Square
Feet		 % Total
Base
Revenues(2)		 Rent PSF(3) Ratings(4) Lease
Expiration
Date
News America 917,154
48.9
%
 43.7
%
 $ 44.88
BBB/BBB 11/30/2020
Ropes & Gray 245,781
13.1
15.8
$ 62.06
NR 2/28/2027(5)
Westdeutsche Landesbank. 150,440
8.0
8.2
$ 51.70
A−/A− 6/30/2010
JP Morgan 125,788
6.7
6.3
$ 48.00
A+/A+ 3/31/2010(6)
RBC Dain Rauscher 75,980
4.0
4.5
$ 57.67
AA−/AA 3/31/2016
Total 1,515,143
80.7
%
 78.5
%
  
   
(1) Ranked by approximate square feet.
(2) The percentages of total base rent are based on in-place underwritten base rental revenues.
(3) Reflects in-place base rent.
(4) Credit ratings are those by S&P and Fitch, respectively, and may reflect the rating of the parent company even though the parent company may have no obligations under the related lease. NR means not rated.
(5) Commencing 1/1/2007, Ropes & Gray has an option to lease approximately 88,288 square feet of the JP Morgan space.
(6) A portion of the JP Morgan space totaling 88,288 square feet has a lease expiration date of 12/31/2007. JP Morgan may surrender this space to the landlord beginning 1/1/2007, subject to Ropes & Gray leasing this space from the landlord.

Lease Expiration Information
Year Approximate
Expiring
Square Feet		 As % of Total
Square Feet		 Cumulative % of
Total Square
Feet		 Approximate Expiring
Base Revenues(1)		 As % of Total
Base Revenues(1)		 Cumulative % of
Total Base
Revenues(1)
    2006(2) 218
0.0
%
 0.0
%
 $ 33,996
0.0
%
 0.0
%
2007 134,042
7.1
7.2
%
 6,339,356
6.6
6.6
%
2008 68,331
3.6
10.8
%
 2,753,900
2.9
9.5
%
2009 44,285
2.4
13.2
%
 2,655,127
2.7
12.2
%
2010 201,978
10.8
23.9
%
 10,514,926
10.9
23.1
%
2011 9,724
0.5
24.4
%
 587,121
0.6
23.7
%
2012 112,835
6.0
30.4
%
 8,301,755
8.6
32.3
%
2013 24,265
1.3
31.7
%
 1,299,910
1.3
33.6
%
2014 0
0.0
31.7
%
 0
0.0
33.6
%
2015 39,575
2.1
33.8
%
 2,255,775
2.3
36.0
%
2016 and beyond 1,238,915
66.0
99.9
%
 61,826,507
64.0
100.0
%
Vacant(3) 2,804
0.1
100.0
%
 0
—
 
Total 1,876,972
100.0
%
  
$ 96,568,373
100.0
%
  
(1) Based on in-place underwritten base rental revenues.
(2) Includes any month-to-month tenants.
(3) Includes the management office which totals approximately 1,094 square feet and the messenger center which totals approximately 994 square feet.

The Borrower and Sponsor.    The 1211 Avenue of the Americas Borrower is 1211 6th Avenue Property Owner, L.L.C., a Delaware limited liability company, which is sponsored by Beacon Capital Strategic Partners, IV, L.P. (‘‘Beacon Capital IV’’). Beacon Capital IV is managed by Beacon Capital Partners, LLC, a real estate investment firm headquartered in Boston with offices in Los Angeles and New York City. Beacon Capital Partners, LLC and its predecessors have been involved in the real estate business for nearly 60 years during which it has acquired, developed and operated urban office and mixed-use properties throughout the United States. Beacon Capital Partners, LLC was formed in 1998, following the merger of the

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predecessor public company, Beacon Properties Corporation with Equity Office Properties Trust. Since its establishment, Beacon Capital Partners, LLC has sponsored five investment vehicles representing approximately $4.5 billion of aggregate equity capital from various endowments, foundations, pension funds, and other investors. An affiliate of the mortgage loan seller is an indirect equity holder in the 1211 Avenue of the Americas Borrower.

The Mortgage Loan.    The 1211 Avenue of the Americas Mortgage Loan was originated on August 24, 2006 and has a cut-off date balance of $275,000,000. The 1211 Avenue of the Americas Mortgage Loan is one of two (2) mortgage loans, together referred to as the ‘‘1211 Avenue of the Americas Loan Combination,’’ that are both secured by the 1211 Avenue of the Americas Mortgaged Property. The 1211 Avenue of the Americas Loan Combination is comprised of: (a) the 1211 Avenue of the Americas Mortgage Loan; and (b) the 1211 Avenue of the Americas Non-Trust Loan in the principal amount of $400,000,000, which will not be included in the trust, and which is, at all times, pari passu in right of payment with the 1211 Avenue of the Americas Mortgage Loan. Both of the mortgage loans in the 1211 Avenue of the Americas Loan Combination are obligations of the 1211 Avenue of the Americas Borrower, are secured by the 1211 Avenue of the Americas Mortgaged Property and are cross-defaulted with each other. The respective rights of the holders of the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan will be governed by the 1211 Avenue of the Americas Co-Lender Agreement, which is described under ‘‘Loan Combinations—The 1211 Avenue of the Americas Mortgage Loan —Co-Lender Agreement’’.

The 1211 Avenue of the Americas Mortgage Loan (as well as the 1211 Avenue of the Americas Non-Trust Loan) is a ten year loan with a stated maturity date of September 11, 2016 which accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 6.41787% per annum. On the eleventh day of each month, but excluding the stated maturity date, the 1211 Avenue of the Americas Borrower is required to make interest-only payments on the 1211 Avenue of the Americas Mortgage Loan. The principal balance of the 1211 Avenue of the Americas Mortgage Loan, plus all accrued and unpaid interest thereon, will be due on the stated maturity date.

The 1211 Avenue of the Americas Borrower is prohibited from voluntarily prepaying the 1211 Avenue of the Americas Mortgage Loan, in whole or in part, prior to June 11, 2016. From and after June 11, 2016, the 1211 Avenue of the Americas Borrower may prepay the 1211 Avenue of the Americas Mortgage Loan, in whole or in part, without payment of any prepayment consideration (except if the 1211 Avenue of the Americas Mortgage Loan is prepaid on a date other than a payment date, the 1211 Avenue of the Americas Borrower is required to pay interest through to the next payment date), provided that (a) the 1211 Avenue of the Americas Borrower simultaneously prepays the 1211 Avenue of the Americas Non-Trust Loan and (b) each borrower under a 1211 Senior Mezzanine Loan (as defined under ‘‘—Mezzanine Financing’’ below) simultaneously prepays its related 1211 Senior Mezzanine Loan.

The 1211 Avenue of the Americas Borrower may defease the 1211 Avenue of the Americas Loan Combination, in whole only, at any time after the earlier of (i) August 24, 2009 and (ii) the expiration of two years following the Issue Date, and by doing so obtain the release of the 1211 Avenue of the Americas Mortgaged Property. A defeasance will be effected by the 1211 Avenue of the Americas Borrower’s pledging substitute collateral that consists of direct, non-callable ‘‘government securities’’ as defined in Treasury Regulations Section 1.860G-2(a)(8)(i) that produce payments which replicate the payment obligations of the 1211 Avenue of the Americas Borrower under the 1211 Avenue of the Americas Loan Combination and are sufficient to pay off the 1211 Avenue of the Americas Loan Combination in its entirety, at the 1211 Avenue of the Americas Borrower’s election on June 11, 2016, July 11, 2016, August 11, 2016 or on the stated maturity date. The 1211 Avenue of the Americas Borrower’s right to defease the entire 1211 Avenue of the Americas Loan Combination is subject to, among other things, the applicable rating agencies each confirming, in connection with the securitization of any mortgage loan comprising the 1211 Avenue of the Americas Loan Combination, that such defeasance would not result in a qualification, downgrade or withdrawal by such rating agency of the ratings then assigned to any class of certificates backed by such mortgage loan. As a condition precedent to the defeasance of the entire 1211 Avenue of the Americas Mortgage Loan, the (i) 1211 Avenue of the Americas Borrower must simultaneously defease the 1211 Avenue of the Americas Non-Trust Loan, in whole only, and (ii) each borrower under a 1211 Senior Mezzanine Loan must simultaneously prepay its related 1211 Senior Mezzanine Loan.

The Mortgaged Property.    The 1211 Avenue of the Americas Mortgage Loan is secured by a first mortgage lien on the fee simple interest of the 1211 Avenue of the Americas Borrower in the 1211 Avenue of the Americas Mortgaged Property, a 45-story office building located on the western block front of Avenue of the Americas, between West 47th and West 48th Streets in the Sixth Avenue/Rockefeller Center district of Midtown Manhattan. The 1211 Avenue of the Americas Mortgaged Property was built in 1973 and renovated in the early 1990’s and is also presently undergoing renovation. The 1211 Avenue of the Americas Mortgaged Property is leased to a diverse mix of tenants including News Corporation (which is rated

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BBB/BBB by S&P and Fitch, respectively), which is Rupert Murdoch’s media organization and the owner of Fox News. News Corporation has its world headquarters at the 1211 Avenue of the Americas Mortgaged Property. Other major tenants include Ropes & Gray, a law firm with 245,781 square feet (13.1% of total space), Westdeutsche Landesbank (which is rated A−/ A− by S&P and Fitch, respectively) with 150,440 square feet (8.0% of total space), JP Morgan Chase (which is rated A+/ A+ by S&P and Fitch, respectively) with 125,788 square feet (6.7% of total space) and RBC Dain Rauscher (which is rated AA−/AA by S&P and Fitch, respectively) with 75,980 square feet (4.0% of total space). The 1211 Avenue of the Americas Mortgaged Property contains 1,876,972 square feet of net rentable area, which includes street level retail space comprising 4,759 square feet occupied by Charles Schwab and a concourse level that serves as an underground walkway connecting it to other Rockefeller Center buildings. The 1211 Avenue of the Americas Mortgaged Property also includes a private 15-car below-grade parking garage. As of August 1, 2006, based on square footage leased, occupancy at the 1211 Avenue of the Americas Mortgaged Property was 99.9%.

Lockbox.    The 1211 Avenue of the Americas Borrower is required to cause all gross income from the 1211 Avenue of the Americas Mortgaged Property to be deposited into a lockbox account under the control of the lender. Upon the occurrence of (a) an event of default under the loan agreement or any of the 1211 Mezzanine Loan (as defined under ‘‘—Mezzanine Financing’’ below) agreements, and/or (b) the debt service coverage ratio of the 1211 Avenue of the Americas Mortgage Loan is less than 1:05x, the funds in the lockbox account will be disbursed as follows: (i) tax amounts to the tax account; (ii) insurance amounts to the insurance account; (iii) monthly debt service to the debt service account; (iv) default interest or any late charges to the debt service account; (v) monthly operating expenses and capital expenditures pursuant to the annual budget to the borrower account; (vi) cash management fees to the lockbox bank; (vii) if any portion of any 1211 Mezzanine Loan is outstanding, all remaining amounts to the mezzanine collection account; and (viii) if no 1211 Avenue of the Americas Mortgage Loan event of default exists, all remaining amounts to the 1211 Avenue of the Americas Borrower.

Terrorism Coverage.    The 1211 Avenue of the Americas Borrower is required under the related loan documents to maintain comprehensive all risk insurance and insurance against certain acts of terrorism, provided that the total annual premium payable by the 1211 Avenue of the Americas Borrower for terrorism insurance shall not exceed $3,500,000. Additionally, notwithstanding the foregoing, the current insurer is an acceptable insurer for the above described terrorism insurance provided that: (1) the current policy has (a) no aggregate limit, (b) a per occurrence limit of no less than the minimum amounts of terrorism insurance described above and (c) a deductible of no greater than $250,000 (2) other than the $250,000 deductible, the portion of such insurance which is not reinsured by TRIA, is reinsured by an insurance carrier rated no less than ‘‘A’’ (or its equivalent) by S&P and Moody’s (3) TRIA or a similar federal statute is in effect and provides that the federal government must reinsure that portion of any terrorism insurance claim above (A) the applicable deductible payable by the current insurer and (B) those coinsured amounts which are reinsured (4) the current insurer is not in bankruptcy and (5) no governmental authority issues any statement, finding or decree that insurers of perils of terrorism similar to the current insurer. In the event that the current insurer is insuring any real estate insured by the blanket policy which is located in close physical proximity to the 1211 Avenue of the Americas Mortgaged Property, the lender has the right to reevaluate the limits and deductible provided by the current insurer. In the event the current insurer is providing insurance to the lender, the current insurer must be controlled by the BCSP IV U.S. Investments, L.P., a permitted transferee or a person otherwise acceptable to lender.

Mezzanine Financing.    The direct and indirect owners of the 1211 Avenue of the Americas Borrower have incurred the following levels of mezzanine financing: (i) a mezzanine loan in the original principal amount of $104,000,000 (the ‘‘1211 Mezzanine A Loan’’); (ii) a mezzanine loan in the original principal amount of $25,000,000 (the ‘‘1211 Mezzanine B Loan’’), (iii) a mezzanine loan in the original principal amount of $146,000,000 (‘‘1211 Mezzanine C Loan’’) and, together with the 1211 Mezzanine A Loan and the 1211 Mezzanine B Loan, the ‘‘1211 Senior Mezzanine Loans’’); and (iii) a junior mezzanine loan in the original maximum principal amount of $181,000,000 (the ‘‘1211 Junior Mezzanine Loan’’ and, together with the 1211 Senior Mezzanine Loans, the ‘‘1211 Mezzanine Loans’’). The originating lender on each of the 1211 Mezzanine Loans is an affiliate of the related mortgage loan seller, however, such loans may be or may have been sold to third parties. Each of the 1211 Senior Mezzanine Loans matures on September 11, 2016. On the eleventh day of each month, but excluding September 11, 2016, each 1211 Senior Mezzanine Loan borrower is required to make interest-only payments based on a fixed-rate per annum on its related 1211 Senior Mezzanine Loan. The remaining principal balance of each 1211 Senior Mezzanine Loan, plus all accrued and unpaid interest thereon, is due on the stated maturity date. Each of the 1211 Mezzanine Loans is secured by the related loan documents which include a pledge of 100% of the equity ownership interests in the applicable 1211 Mezzanine Loan borrower.

An initial advance of $156,000,000 was made under the 1211 Junior Mezzanine Loan and has been repaid prior to the cut-off date, and such amount is no longer available to be drawn upon. As of the cut-off date, a $25,000,000 portion (the ‘‘1211

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Avenue of the Americas Liquidity Facility’’) of the 1211 Junior Mezzanine Loan remains unfunded and can be drawn upon. Upon ten days written request prior to any payment date from the 1211 Junior Mezzanine Loan borrower to the 1211 Junior Mezzanine Loan lender, such borrower may receive advances under the 1211 Avenue of the Americas Liquidity Facility in the maximum amount of $25,000,000; (i) for required repairs, replacements, tenant improvements, tenant allowances, leasing commissions, legal expenses or budgeted capital expenditures or other discretionary capital expenditures for the 1211 Avenue of the Americas Mortgaged Property; and (ii) to pay for any shortfall or deficiency in the junior mezzanine loan account with respect to the payment of any of the sums due on the 1211 Junior Mezzanine Loan; provided that such advance does not exceed $5,000,000. Upon not less than 15 days notice, the 1211 Junior Mezzanine Loan borrower will have the right to terminate its right to receive any further advances under the 1211 Avenue of the Americas Liquidity Facility without any obligation to pay any fees on any of the unadvanced portion of the 1211 Avenue of the Americas Liquidity Facility. The initial term of the 1211 Junior Mezzanine Loan is for 9 months with an initial 15 month extension option and annual extension options thereafter. The conditions for exercise of the extension options include no event of default exists under the 1211 Junior Mezzanine Loan. Interest on the 1211 Junior Mezzanine Loan is calculated on a 30/360 Basis during the initial term and is calculated on an Actual/360 basis thereafter. The 1211 Junior Mezzanine Loan may be prepaid without any prepayment fees or penalty during the initial term on any date and thereafter on any payment date, provided that if such prepayment following the initial term does not occur on a monthly payment date, the 1211 Junior Mezzanine Loan borrower will pay the lesser of (i) 1211 Junior Mezzanine Loan lender’s actual breakage costs and (ii) interest from the date of repayment through the end of the accrual period.

Upon (i) the repayment of the 1211 Junior Mezzanine Loan or (ii) the termination by the 1211 Junior Mezzanine Loan borrower of its right to receive any further advances under the 1211 Avenue of the Americas Liquidity Facility as provided in the preceding paragraph, provided, in each case, that the 1211 Avenue of the Americas Mortgage Loan lender receives at least 30 days prior written notice and no event of default exists under the 1211 Avenue of the Americas Mortgage Loan, an additional mezzanine loan in a principal amount not to exceed $95,000,000 may be incurred upon certain terms and conditions set forth in the 1211 Avenue of the Americas Mortgage Loan agreement, including, without limitation (i) a combined DSCR of not less than 1.29x, (ii) a combined LTV ratio of not greater than 59.75%, (iii) delivery of an intercreditor agreement in compliance with rating agency guidelines, (iv) approval of the 1211 Avenue of the Americas Mortgage Loan lender and (v) delivery of confirmation from the applicable rating agencies that such additional mezzanine loan will not result in the downgrade, withdrawal or qualification of the then-current ratings assigned to any class of series 2006-C7 certificates. The proceeds of such financing will be used solely to improve the 1211 Avenue of the Americas Mortgaged Property.

Mezzanine Intercreditor Agreement.    The 1211 Mezzanine Loan lenders are individually and collectively referred to herein, as the context may require, as a ‘‘1211 Mezzanine Lender’’). The 1211 Avenue of the Americas Mortgage Loan lender has entered into a second amended and restated intercreditor agreement (the ‘‘Intercreditor Agreement’’) with the 1211 Mezzanine Lenders, that sets forth the relative priorities between the 1211 Avenue of the Americas Mortgage Loan and each 1211 Mezzanine Loan. The Intercreditor Agreement provides that, among other things:

•  Each 1211 Mezzanine Loan is generally subordinate to the 1211 Avenue of the Americas Mortgage Loan in right of payment; provided, however, that so long as no event of default has occurred and is continuing with respect to the 1211 Avenue of the Americas Mortgage Loan and subject to the terms of the Intercreditor Agreement, each 1211 Mezzanine Lender may accept payments due and payable from time to time under the loan documents evidencing or securing its respective 1211 Mezzanine Loan and prepayments of its respective 1211 Mezzanine Loan made in accordance with loan documents evidencing or securing its respective 1211 Mezzanine Loan.
•  Upon an ‘‘event of default’’ under a 1211 Mezzanine Loan, the applicable 1211 Mezzanine Lender will have the right, subject to the terms of the Intercreditor Agreement, to select a replacement manager for the 1211 Avenue of the Americas Mortgaged Property.
•  Each 1211 Mezzanine Lender has the right to receive notice of any event of default under the 1211 Avenue of the Americas Mortgage Loan and the right to cure any monetary default within periods specified in the Intercreditor Agreement, which periods, as to the last 1211 Mezzanine Lender having the right to cure, generally expire on the later to occur of (A) 3 business days after such mezzanine lender receives notice from the 1211 Avenue of the Americas Mortgage Loan lender that the preceding 1211 Mezzanine Lenders have failed to exercise their rights to cure after such 1211 Mezzanine Lenders have been provided with their consecutive notice period; and (B) up to 10 business days after the expiration of 1211 Avenue of the Americas Borrower’s cure period; provided that no 1211 Mezzanine Lender will have the right to cure with respect to monthly scheduled debt service payments for a period of more than six consecutive months unless a 1211 Mezzanine Lender has commenced and is continuing to diligently

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  pursue its rights against the collateral for its respective 1211 Mezzanine Loan. In addition, each 1211 Mezzanine Lender has the right to cure any non-monetary default within periods specified in the Intercreditor Agreement, which periods, as to the last 1211 Mezzanine Lender having the right to cure, generally expire on the later to occur of (A) 5 business days after the receipt of notice that the prior 1211 Mezzanine Lenders have failed to exercise their rights to cure after such 1211 Mezzanine Lender has been provided with their consecutive notice period; and (B) 30 business days after the expiration of 1211 Avenue of the Americas Borrower’s cure period; provided, that, if such non-monetary default is susceptible of cure but cannot reasonably be cured within that period (or is not susceptible of cure without foreclosure on the collateral for a 1211 Mezzanine Loan) then, subject to certain conditions, each 1211 Mezzanine Lender will be given an additional period of time as is reasonably necessary in the exercise of due diligence to cure such non-monetary default or to pursue such foreclosure, subject to certain conditions in the Intercreditor Agreement.
•  If the 1211 Avenue of the Americas Mortgage Loan has been accelerated, or any proceeding to foreclose or otherwise enforce the mortgage or other security for the 1211 Avenue of the Americas Mortgage Loan has been commenced or a proceeding or other action relating to insolvency, reorganization, or relief of debtors has been commenced against the 1211 Avenue of the Americas Borrower, or if an event of default has occurred which has caused the 1211 Avenue of the Americas Mortgage Loan to become a ‘‘specially serviced’’ mortgage loan, then, subject to the terms of the Intercreditor Agreement, each 1211 Mezzanine Lender will have the right to purchase the 1211 Avenue of the Americas Mortgage Loan in whole for a price generally equal to the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon (including, without limitation, any advances and post-petition interest, but excluding any liquidated damages, exit fees, prepayment premium, spread maintenance or yield maintenance charges, late charges, or any default interest relating to any defaults cured by the 1211 Mezzanine Lender, as provided in the Intercreditor Agreement), any protective advances made by the mortgagee and any interest on any advances, fees and expenses payable to any servicer, trustee, fiscal agent or special servicer, including any interest on any advances made by any of them and, if a 1211 Mezzanine Lender fails to purchase the 1211 Avenue of the Americas Mortgage Loan within 90 days of receipt of the 1211 Avenue of the Americas Mortgage Loan lender’s notice of such purchase option, liquidation fees payable to any such servicer, trustee, fiscal agent or special servicer.
•  The loan documents evidencing and securing each 1211 Mezzanine Loan generally may be modified without the 1211 Avenue of the Americas Mortgage Loan lender’s consent, except that certain provisions may not be modified without the 1211 Avenue of the Americas Mortgage Loan lender’s consent, including, without limitation, a material increase in any monetary obligations of any borrower under a 1211 Mezzanine Loan. Notwithstanding the foregoing, upon the occurrence of an event of default under the loan documents evidencing or securing a 1211 Mezzanine Loan, the applicable 1211 Mezzanine Lender will be permitted, subject to the satisfaction of certain conditions, to amend or modify the applicable 1211 Mezzanine Loan, in a manner that increases the interest rate thereunder.

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III. The Extendicare Portfolio Mortgage Loan

    


Mortgage Loan Information
Cut-off Date Principal Balance: $250,000,000(1)
Loan per Bed: $58,879(2)
% of Initial Mortgage Pool Balance: 8.3%
Shadow Rating (S&P/Fitch): AAA/AAA
Loan Purpose: Recapitalization
Mortgage Interest Rate: 6.6525% per annum
Interest Calculation: Actual/360
First Payment Date: December 11, 2006
Amortization Term: 25 years(3)
Anticipated Repayment Date: NAP(4)
Hyperamortization: NAP(4)
Maturity Date: November 11, 2011
Maturity Balance: $242,137,291
Borrowers: Various(5)
Sponsor: Extendicare Health Services, Inc.
Defeasance/Prepayment: Defeasance permitted two years after Issue Date. Prepayment with penalty permitted at any time. Prepayment without penalty permitted three months prior to maturity date.
Up-Front Reserves: Ground Rent Reserve(6)
Ongoing Reserves: Tax and Insurance Reserve(7)
  Replacement Reserve(8)
  Ground Rent Reserve(9)
Lockbox: Hard (10)
Other Secured Debt: $250,000,000 Pari Passu Non-Trust Loan(1)
  Revolving Loan(11)

    


Mortgaged Property Information
Single Asset/Portfolio: Portfolio(12)
Property Type: Skilled Nursing and Assisted Living(12)
Location: 10 states(12)
Year Built: 1948-2000
Year Renovated: 1980-2006
Number of Beds: 8,492
Occupancy: 93.9%(13)
Occupancy Date: June 30, 2006(13)
Ownership Interest: Fee(14)
Property Management: Self Managed(15)
U/W NCF: $111,783,127(16)
U/W NCF DSCR: 2.72x(17)
Cut-off Date U/W NCF DSCR: 3.31x(18)
Aggregate Appraised Value: $785,120,000(19)
Appraisal As of Date: August 31, 2006(19)
Aggregate Cut-off Date LTV Ratio: 63.7%(20)
Aggregate Maturity LTV Ratio: 61.7%(20)
 
(1) The Extendicare Portfolio Mortgage Loan is part of the Extendicare Portfolio Loan Combination that also includes the Extendicare Portfolio Pari Passu Non-Trust Loan in the principal amount of $250,000,000.
(2) Based on a loan amount comprised of the entire Extendicare Portfolio Loan Combination of $500,000,000. The amount of $500,000,000 is comprised of two pari passu A notes.
(3) Payments of interest only are required through and including the payment date in November 2009.
(4) NAP means not applicable.
(5) See ‘‘—The Borrowers and Sponsor’’ below.
(6) At origination, the Extendicare Portfolio Borrowers deposited $3,000 into a ground rent reserve account for one month of ground lease base rent payments.
(7) The Extendicare Portfolio Borrowers are required to make monthly deposits into a tax and insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by the lender to be payable, during the following 12 months and one-twelfth of an amount which would be sufficient to pay the insurance premiums due for the renewal of insurance policies. Notwithstanding the foregoing, so long as (a) the debt yield exceeds 13%, (b) the Extendicare Portfolio Borrowers have delivered to the lender a guaranty of such obligation from Guarantor (as defined below), and (c) the Extendicare Portfolio Borrowers deliver evidence reasonably satisfactory to the lender that all taxes required to be paid have been paid, the monthly tax escrow payments will not be required. Notwithstanding the foregoing, so long as the Extendicare Portfolio Borrowers provide evidence of a blanket insurance policy covering the Extendicare Portfolio Mortgaged Property, as approved by the lender, the monthly insurance escrow payment will not be required.
(8) The Extendicare Portfolio Borrowers are required to make monthly deposits into a replacement reserve account in an amount equal to one-twelfth of the product of $300 multiplied by the aggregate number of beds at the Extendicare Portfolio facilities.
(9) The Extendicare Portfolio Borrowers are required to make monthly deposits into a ground rent reserve account in an amount equal to the ground rent that will be payable under each ground lease for the month in which such payment occurs. Notwithstanding the foregoing, the Extendicare Portfolio Borrowers will not be required to make monthly ground rent reserve deposits provided the Extendicare Portfolio Borrowers deliver, throughout the term of the Extendicare Portfolio Mortgage Loan, evidence reasonably satisfactory to the lender that all ground rent required to be paid by the

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Extendicare Portfolio Borrowers pursuant to any ground lease has timely been paid by the Extendicare Portfolio Borrowers. As long as the Extendicare Portfolio Borrowers are not required to make monthly deposits of the ground rent monthly deposit, the initial ground rent deposit will, other than during the continuance of an event of default, be held in the ground rent reserve account and will not be disbursed for the payment of ground rent.
(10) See ‘‘—Lockbox’’ below.
(11) See ‘‘—Revolving Loan’’ below.
(12) Portfolio of 80 skilled nursing facilities and 2 skilled nursing and assisted living facilities located in Kentucky, Pennsylvania, Wisconsin, Indiana, Washington, Ohio, Minnesota, Delaware, West Virginia and Idaho.
(13) Weighted average as of June 30, 2006, based on allocated loan amounts and individual property occupancy.
(14) One of the Extendicare Portfolio Mortgaged Properties known as Arbors at Dayton Nursing & Subacute Center is a leasehold interest pursuant to a ground lease expiring on or about October 23, 2045. See ‘‘—Ground Lease’’ below. Two of the Extendicare Portfolio Mortgaged Properties known as Cedar Springs Health & Rehab Center and River's Bend Health & Rehab are fee interests in commercial condominium units.
(15) The Extendicare Portfolio Mortgaged Properties are managed by affiliates of the Extendicare Portfolio Borrowers. See ‘‘—Operators’’ below.
(16) U/W NCF is the aggregate for the 82 Extendicare Mortgaged Properties.
(17) Based on U/W NCF and calculated based on the annualized constant monthly debt service payment commencing with the payment date in December 2009 and a loan amount comprised of the entire Extendicare Portfolio Loan Combination.
(18) Based on U/W NCF and calculated based on the annual interest-only payments and a loan amount comprised of the entire Extendicare Portfolio Loan Combination.
(19) Aggregate for the 82 Extendicare Mortgaged Properties. The appraisal as of date for the Extendicare Portfolio Mortgaged Property known as Parkview Nursing Center is as of September 1, 2006. The appraised values and appraisal as of dates for three of the Extendicare Portfolio Mortgaged Properties are based on stabilized values and stabilized as of dates of January 1, 2007 for River’s Bend Health & Rehab and as of March 1, 2007 for each of Willowcrest Care Center and Heritage Nursing & Rehab Center.
(20) The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire Extendicare Portfolio Loan Combination.

The Borrowers and Sponsor.    The 22 Extendicare Portfolio Borrowers are: AAT RE 1 LLC, Abington Crest RE 1 LP, Beaver Valley RE 1 LP, Belair Health RE 1 LP, Columbus RE 1 LLC, Dayton RE 1 LLC, Dresher Hill RE 1 LP, Elkins Crest RE 1 LP, Fairlawn RE 1 LLC, FLT RE 1 LLC, Homes RE 1 LLC, IHR RE 1 LLC, Kaufman RE 1 LLC, London RE 1 LLC, MP RE 1 LLC, New Castle RE 1 LLC, NHF RE 1 LLC, Slate Belt RE 1 LP, Spruce Manor RE 1 LP, Tremont Health RE 1 LP, Valley Manor RE 1 LP, West RE 1 LLC. The sponsor of the Extendicare Portfolio Borrowers is Extendicare Health Services, Inc., the U.S. subsidiary of Extendicare REIT (formerly known as Extendicare Inc.). Extendicare, a Canadian-based company founded in 1968, is a major provider of long-term care and related services in North America. On November 10, 2006, the publicly traded Extendicare Inc. completed its reorganization plans by spinning off to shareholders its assisted living housing subsidiary, Assisted Living Concepts, Inc., as a separately traded entity listed on the New York Stock Exchange, and by converting itself to a Canadian real estate investment trust (‘‘REIT’’). The Extendicare REIT units are listed on the Toronto Stock Exchange under the symbol EXE.UN. Following this reorganization, Extendicare REIT reports that through its subsidiaries (including its U.S.-based Extendicare Health Services, Inc. subsidiary), it operates 235 nursing and assisted living facilities in North America, with capacity for over 26,800 residents and employs approximately 34,000 people in North America.

The Mortgage Loan.    The Extendicare Portfolio Mortgage Loan was originated on October 16, 2006 and has a cut-off date balance of $250,000,000. The Extendicare Portfolio Mortgage Loan is one of two (2) mortgage loans, together referred to as the ‘‘Extendicare Portfolio Loan Combination,’’ that are both secured by the Extendicare Portfolio Mortgaged Property. The Extendicare Portfolio Loan Combination is comprised of: (a) the Extendicare Portfolio Mortgage Loan; and (b) the Extendicare Portfolio Non-Trust Loan in the principal amount of $250,000,000, which will not be included in the trust, and which is, at all times, pari passu in right of payment with the Extendicare Portfolio Mortgage Loan. Both of the mortgage loans in the Extendicare Portfolio Loan Combination are obligations of the Extendicare Portfolio Borrowers, are secured by the Extendicare Portfolio Mortgaged Property and are cross-defaulted with each other. The respective rights of the holders of the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan will be governed by the Extendicare Portfolio Co-Lender Agreement. See ‘‘Loan Combinations—The Extendicare Portfolio Loan Combination.’’

The Extendicare Portfolio Mortgage Loan (as well as the Extendicare Portfolio Non-Trust Loan) is a five-year loan with a stated maturity date of November 11, 2011 which accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 6.6525% per annum. On the eleventh day of each month through and including the payment date in November 2009, the Extendicare Portfolio Borrowers are required to make payments of interest-only on the Extendicare Portfolio Mortgage Loan (as well as the Extendicare Portfolio Non-Trust Loan). On the eleventh day of each month from and including December 11, 2009, up to but excluding the stated maturity date, the Extendicare Portfolio Borrowers are required to make constant monthly debt service payments aggregating $3,423,836.08 on the Extendicare Portfolio Loan

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Combination (based on a 25-year amortization schedule). The outstanding principal balance of the Extendicare Portfolio Loan Combination, plus all accrued and unpaid interest thereon, are due and payable on such stated maturity date.

The Extendicare Portfolio Borrowers are permitted at any time to voluntarily prepay in whole (but not in part) the Extendicare Portfolio Loan Combination, provided such prepayment is accompanied by a payment of prepayment consideration equal to the greater of 1% of the principal amount prepaid and yield maintenance. From and after August 11, 2011, the Extendicare Portfolio Borrowers may prepay the Extendicare Portfolio Loan Combination, in whole or in part, without payment of any prepayment consideration.

The Extendicare Portfolio Borrowers may defease the Extendicare Portfolio Loan Combination in whole at any time after two years after the latest securitization of any mortgage loan comprising the Extendicare Portfolio Loan Combination, and by doing so obtain the release of the Extendicare Portfolio Mortgaged Properties. A defeasance will be effected by the Extendicare Portfolio Borrowers’ pledging substitute collateral that consists of direct, non-callable ‘‘government securities’’ as defined in Treasury Regulations Section 1.860G-2(a)(8)(i) that produce payments which replicate the payment obligations of the Extendicare Portfolio Borrowers under the Extendicare Portfolio Loan Combination and are sufficient to pay off the Extendicare Portfolio Loan Combination in its entirety on August 11, 2011. The Extendicare Portfolio Borrowers’ right to defease the entire Extendicare Portfolio Loan Combination is subject to, among other things, the applicable rating agencies each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 Certificates by such rating agency.

The Extendicare Portfolio Borrowers may also partially defease the Extendicare Portfolio Loan Combination at any time after two years after the latest securitization of any mortgage loan comprising the Extendicare Portfolio Loan Combination, and by doing so obtain the release of an individual Extendicare Portfolio Mortgaged Property (each such individual property, a ‘‘Release Property’’) from the lien of the related mortgage, upon the satisfaction of the following conditions, among others: (a) payment of a defeasance amount (the ‘‘Defeasance Amount’’) that is equal to or exceeds 110-120% (depending on the aggregate amount of the allocated loan amounts of all released Extendicare Portfolio Properties) of the allocated loan amount for the applicable Release Property; (b) after giving effect to such release, the DSCR for the Extendicare Portfolio Mortgaged Properties then remaining subject to the liens of the mortgages must be equal to or greater than the greater of (i) the DSCR on the date of origination and (ii) the DSCR for all of the then remaining Extendicare Portfolio Mortgaged Properties (including the proposed Release Property and taking into account the debt represented by the defeasance collateral in question) for the twelve full calendar months immediately preceding the release of the Release Property; provided, that the Extendicare Portfolio Borrowers will be permitted to increase the principal amount of the debt evidenced by the subject defeased note and accordingly the Defeasance Amount in order to satisfy this DSCR test; and (c) the proposed Release Property must be conveyed to a person other than the Extendicare Portfolio Borrowers or if the Extendicare Portfolio Borrower which owns the proposed Release Property does not own any other Extendicare Portfolio Mortgaged Properties, then such Extendicare Portfolio Borrower may at its option continue to own such proposed Release Property and such Extendicare Portfolio Borrower will be released from obligations under the Extendicare Portfolio Mortgage Loan documents accruing thereafter.

The Mortgaged Properties.    The Extendicare Portfolio Mortgage Loan is secured by first priority mortgage liens on the fee simple and, in the case of one property, leasehold interest of the Extendicare Portfolio Borrowers in the Extendicare Portfolio Mortgaged Properties. The Extendicare Portfolio Mortgaged Properties consist of 80 skilled nursing facilities and two skilled nursing and assisted living facilities containing approximately 8,492 beds. These facilities are located in ten states across the country, as noted in the chart below. Skilled nursing facilities, in addition to room, board, housekeeping and laundry, provide long-term professional nursing care and therapies, assistance with activities of daily living, and, in some cases, shorter-term subacute rehabilitative care, to the frail, elderly, convalescent, chronically ill and others who require such care. Skilled nursing facilities are eligible to become certified in the Medicare and Medicaid programs. Assisted living facilities provide room, board, housekeeping, laundry and assistance with normal daily living activities, which is not necessarily provided by a professional nurse. An assisted living facility is designed to provide services to an established number of persons who may or may not be ambulatory or who may need minimal assistance with bathing, personal grooming or table service. An assisted living facility provides personal need services and supervision of residents’ activities, but does not offer any type of direct medical management unless it participates in a specialized state program, in which case it may provide some health care services.

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The Extendicare Portfolio Mortgage Loan by Property Type
Property Type Number of
Mortgaged
Properties		 Allocated Loan
Amount(1)		 Percentage of
Mortgage
Loan Balance
Skilled Nursing Facilities 80
$ 487,371,357
97.5%
Skilled Nursing Facilities & Assisted Living Facilities 2
12,628,643
2.5%
Total 82
$ 500,000,000
100.0%
(1) Reflects aggregate allocated loan amount of the entire Extendicare Loan Combination.

The Extendicare Portfolio Mortgage Loan by State(1)
Location Number of
Properties		 Approximate
Number
of Beds		 Year
Built		 Weighted
Average
Occupancy(2)		 Appraised Value Allocated
Loan Amount(3)
Kentucky 19
1,638
1963-2000
92.8
%
 $ 154,550,000
$98,424,445
Pennsylvania 9
1,257
1963-1984
98.3
154,080,000
98,125,127
Wisconsin 11
992
1948-1997
91.9
123,040,000
78,357,449
Indiana 14
1,418
1958-1988
90.4
99,750,000
63,525,321
Washington 10
1,089
1965-1985
94.0
99,290,000
63,232,372
Ohio 11
1,218
1965-1998
94.7
83,980,000
53,482,270
Minnesota 4
446
1949-1971
94.1
29,130,000
18,551,304
Delaware 1
120
1990
94.5
14,910,000
9,495,364
West Virginia 1
120
1985
98.0
13,270,000
8,450,937
Idaho 2
194
1967-1973
91.7
13,120,000
8,355,411
Total/Weighted Average 82
8,492
 
93.9
%
 $ 785,120,000
$500,000,000
(1) Ranked by the aggregate allocated loan amount per state for the entire Extendicare Loan Combination.
(2) Weighted average occupancy for each state based on average occupancy per property in the specified state as of June 30, 2006.
(3) Based on the entire amount of the Extendicare Portfolio Loan Combination.

Lockbox.    The Extendicare Portfolio Borrowers are required to deliver to the Master Tenant (defined below) the master tenant rent direction letter directing the Master Tenant to deposit all rent payable under the Master Lease (as defined below) directly into a cash management account. The Extendicare Portfolio Borrowers have established such cash management account and various mortgage sub-accounts (collectively, the ‘‘Lockbox Accounts’’) with Wachovia Bank National Association as eligible accounts for the benefit of the lender, each of which Accounts is under the sole dominion and control of the lender. The Extendicare Portfolio Borrowers have granted to the lender a first priority security interest in the Lockbox Accounts and all deposits at any time contained therein and the proceeds thereof. The lender has the sole right to make withdrawals from the Lockbox Accounts and all costs and expenses for establishing and maintaining the Lockbox Accounts will be paid by the Extendicare Portfolio Borrowers. All funds on deposit in the Lockbox Accounts are to be applied as follows: (a) funds sufficient to pay the monthly tax and insurance amount for such payment date, if any, will be transferred to the tax and insurance reserve sub-account; (b) during any time that the monthly ground rent reserve amount is required to be deposited pursuant to the Extendicare Portfolio Mortgage Loan documents, funds sufficient to pay the monthly ground rent reserve amount for such payment date will be transferred to the ground rent reserve sub-account; (c) funds sufficient to pay the monthly debt service payment amount for such payment date will be transferred to the debt service reserve sub-account to be applied in accordance with the Extendicare Portfolio Mortgage Loan documents; (d) funds sufficient to pay the monthly replacement reserve amount for such payment date will be transferred to the replacement reserve sub-account; (e) funds sufficient to pay any interest accruing at the default rate and late payment charges, if any, will be transferred to the debt service reserve sub-account to be applied in accordance with the Extendicare Portfolio Mortgage Loan documents; (f) to the extent of excess cash flow, as described below, funds sufficient to pay the deposits, if any, required to be made by the Extendicare Portfolio Borrowers in the event that the test described below under ‘‘—Excess Cash Flow’’ is not met will be transferred to an account designated by the lender; and (g) all amounts remaining in the Lockbox Accounts after deposits for the foregoing will be transferred by wire transfer to the Extendicare Portfolio Mortgage Borrower’s agent. All funds on deposit in the Lockbox Accounts during the continuance of an event of default may be applied by the lender in such order and priority as the lender shall determine.

Terrorism Coverage.    The Extendicare Portfolio Borrowers are required to maintain commercial property and business income insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required in connection with the commercial property and business income insurance set forth in the Extendicare Portfolio Mortgage Loan documents at all times during the term of the Extendicare Portfolio Mortgage Loan as long as such coverage

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is available in the commercial market at a premium no greater than $600,000 per annum; provided that if the foregoing required terrorism coverages cost more than $600,000 per annum, the Extendicare Portfolio Borrowers will only be required to obtain such coverage which is available for a premium of $600,000 per annum.

Guarantees.    Extendicare Health Services, Inc. (the ‘‘Guarantor’’) has executed a guaranty in favor of the lender in lieu of the Extendicare Portfolio Borrowers making monthly escrow deposits relating to taxes, pursuant to which the Guarantor guaranties the payment and performance of the Extendicare Portfolio Borrowers’ obligations to pay taxes (the ‘‘Guaranteed Obligations’’), excluding any taxes accruing after the time that the Extendicare Portfolio Borrowers again become obligated pursuant to the applicable Extendicare Portfolio Mortgage Loan documents to make monthly deposits into the tax and insurance reserve account. The Guaranteed Obligations include any initial deposit of tax and insurance reserve funds attributable to taxes in accordance with the Extendicare Portfolio Mortgage Loan documents required by the lender in connection with such commencement of monthly deposits of tax and insurance reserve funds. The Guarantor has executed and delivered to the lender an insurance payment guaranty pursuant to which Guarantor guaranties to reimburse the lender for any loss, damage, cost, expense, liability, claim or other obligation incurred by lender (including reasonable attorneys’ fees and costs reasonably incurred) arising out of or in connection with any failure on the part of a specified insurer to pay in full any claim or claims that are due to and owing to a claimant pursuant to the professional liability and/or general liability insurance coverage provided by a specified insurer to the Extendicare Portfolio Borrowers, up to and including the full $10,000,000 of aggregate coverage.

Ground Lease.    The Extendicare Portfolio Borrower is the ground lessee of that certain individual property commonly known as the Arbors at Dayton Nursing and Subacute Center. Under the terms of the ground lease, the Extendicare Portfolio Borrower is obligated to pay to ground lessor the amount of $3,720 per month. The lease expires 50 years from the commencement date thereof (the commencement date being on or about October 23, 1995).

Insurance.    Pursuant to the related loan documents, the Extendicare Portfolio Borrowers are required to procure and maintain commercial general liability insurance and professional liability insurance against claims for personal injury, bodily injury, death or property damages occurring upon, in or about the related mortgaged real properties, on the ‘‘claims made’’ form with a combined limit of not less than $100,000,000 in the annual aggregate and $100,000,000 per occurrence or professional incident. Such amounts will be subject to a self-insured retention of not more than $2,000,000 per each occurrence or professional incident. Such amounts will continue at not less than the specified limit until required to be changed by lender in writing by reason of changed economic conditions making such protection inadequate; and will cover at least the following hazzards: (i) premises, operations and professional services; (ii) products and completed operations; (iii) liabilities arising out of the activities of independent contractors; (iv) blanket contractual liability; and (v) contractual liability covering the indemnities contained in the related mortgages to the extent the same is available. Notwithstanding the foregoing, as long as the insurance payment guaranty, described under ‘‘—Guarantees’’ above, given in connection with the mortgages remains in full force and effect, the Extendicare Portfolio Borrower shall be deemed to satisfy the above requirements if such borrower obtains and maintains (i) professional liability and general liability coverage from a specified insurer as a captive insurer insuring not more than $10,000,000 of aggregate exposure under such professional liability and general liability coverage, which coverage shall be in excess of the self-insured retention described above and (ii) additional insurance or reinsurance in a coverage amount not less than $90,000,000 pursuant to policies that satisfy the conditions and applicable provisions including, without limitation, the ratings requirements set forth in the related mortgages.

Operators.    Each individual Extendicare Portfolio Mortgaged Property is master leased by the applicable Extendicare Portfolio Borrower that is the fee or, in the case of one such Extendicare Portfolio Mortgaged Property, leasehold owner of such property to Extendicare Master Tenant 1 LLC, as master tenant (the ‘‘Master Tenant’’) pursuant to a master lease (the ‘‘Master Lease’’). The Master Tenant sub-leases, pursuant to an individual sub-lease (an ‘‘Operating Lease’’), each Extendicare Portfolio Mortgaged Property demised to it pursuant to the Master Lease to a sub-tenant (a ‘‘Healthcare Operator’’). The Master Tenant is a special purpose entity which is an affiliate of each of the Extendicare Portfolio Borrowers. Each Healthcare Operator is a limited special purpose entity as required under the Extendicare Portfolio Mortgage Loan documents. The Operating Leases are cross-defaulted. In addition, the Healthcare Operators, along with certain other related entities, are permitted to incur and have incurred certain additional intercompany debt.

Master Lease.    The Master Lease with respect to the Extendicare Portfolio Loan Combination is a lease of the land, buildings and fixtures of the entire Extendicare Portfolio Mortgaged Property. The leased premises under the Master Lease may only be used as an Extendicare Portfolio Mortgaged Property. The Master Lease is subject and subordinate to the Extendicare Portfolio Loan Combination. The Master Lease has a term of 10 years, expiring October 16, 2016, subject to two (2) options to extend the term of the Master Lease each for an additional 10 year period.

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The annual base rent due under the Master Lease (the ‘‘Master Lease Base Rent’’) for the first year of the lease term is $35,410,703, payable in advance in equal consecutive monthly installments on the first day of each month. Thereafter, the Master Lease Base Rent for each consecutive lease year will be the annual base rent due with respect to the immediately prior lease year multiplied by an escalation percentage which will be an amount per annum equal to a fraction, the numerator of which will be the Consumer Price Index on the first day of the applicable lease year and the denominator of which will be the Consumer Price Index on the first day of the preceding lease year. If, during any period during the initial term and the first renewal term, the Master Lease Base Rent is not equal to or greater than the product of one hundred and five percent (105.0%) and the regularly scheduled payments of interest and principal (excluding any balloon payments of principal that are due and payable at maturity, any accelerated payments, and any default interest) required by the applicable Extendicare Portfolio Mortgage Loan documents (‘‘Fee Mortgage Debt Service’’), the Master Lease Base Rent for such period will also, in addition to the annual increases set forth above, be increased by an amount equal to the Fee Mortgage Debt Service for such period minus the Master Lease Base Rent for such period. Based on the first year annual base rent due under the Master Lease, the DSCR as of the Cut-off date is 1.05x. The Master Tenant is also required to pay and discharge, as supplementary rent or additional rent, all other amounts, liabilities and obligations of any nature relating to the leased premises, including, without limitation, all impositions, those arising under any applicable laws, requirements, easements or other similar agreements and all interest and penalties that may accrue thereon in the event of the Master Tenant’s failure to pay such amounts when due, and all damages, costs and expenses which the Extendicare Portfolio Borrowers may incur by reason of the Master Tenant’s failure to comply with the terms of the Master Lease.

The Master Lease Base Rent and all other sums payable under the Master Lease will be payable in all events without regard to the performance or non-performance, by either party, of any other provisions of the Master Lease. The Master Tenant is obligated to pay the Master Lease Base Rent to the Extendicare Portfolio Borrowers, free from any charges, assessments, impositions or deductions of any kind and without abatement, deduction or set-off whatsoever other than expressly set forth in the Master Lease. The Master Tenant is required to pay all costs, expenses and charges of every kind and nature relating to the leased premises from and after the date of the Master Lease, including, without limitation, all taxes, costs and improvements, maintenance, repairs, alterations, additions, replacements and insurance and other impositions except debt service on the Extendicare Portfolio Mortgage Loan or any other indebtedness of the Extendicare Portfolio Borrowers which becomes due and payable or accrues during the term of the Master Lease.

Operating Leases.    The Operating Leases have terms substantially similar to the terms of the Master Lease described above, with changes made based on the type and number of Extendicare Portfolio Mortgage Properties and the specific situations with respect thereto and with respect to the related tenant.

Substitutions.    At any time prior to the date which is three (3) months prior to the maturity date, the Extendicare Portfolio Borrowers may obtain the release of one or more Extendicare Portfolio Mortgaged Properties from the lien of the mortgage thereon and the release of the Extendicare Portfolio Borrowers’ obligations under the Extendicare Portfolio Mortgage Loan documents with respect to such Extendicare Portfolio Mortgaged Properties (other than those expressly stated to survive) (each such Extendicare Portfolio Mortgaged Property, a ‘‘Substituted Property’’), by substituting therefor one or more properties (such properties, individually and collectively as the context requires, a ‘‘Substitute Property’’), provided that, among other things, (a) after giving effect to the proposed substitution, no event of default shall be continuing; (b) the allocated loan amount of the Substituted Property, when taken together with the allocated loan amounts of all other Substituted Properties substituted pursuant to the Extendicare Portfolio Mortgage Loan documents, does not exceed $100,000,000 in the aggregate; (c) the Substitute Property is not located in Arkansas, Mississippi, Florida or Texas (unless the applicable Substituted Property is located in the same such state as the Substitute Property); (d) the Substitute Property has not suffered a casualty or condemnation which has not been fully restored; (e) either (i) the Substituted Property must be conveyed or (ii) the ownership interests in the new Borrower owning such Substituted Property must be transferred, in either case, to a person other than an Extendicare Portfolio Borrower, the Master Tenant or an Operator; (f) the appraised value of the Substitute Property and the ‘‘leased fee value’’ as shown in the related appraisal is equal to or exceeds the appraised value of the Substituted Property and the ‘‘leased fee value’’ immediately prior to the substitution; (g) after giving effect to the proposed substitution, the DSCR for the Extendicare Portfolio Mortgage Properties then remaining subject to the liens of the mortgages must be equal to or greater than the greater of (i) the DSCR for the twelve full calendar months immediately preceding origination and (ii) the DSCR for all of the then remaining Extendicare Portfolio Mortgage Properties (including the Substituted Property) for the twelve full calendar months ending on the last day of the month immediately preceding the substitution of the Substituted Property; (h) the Extendicare Portfolio Borrower must have obtained and delivered to the lender prior written confirmation from the applicable rating agencies that the substitution will not cause a downgrade, withdrawal or qualification of the then-current ratings of the any certificates backed by the

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Extendicare Portfolio Loan Combination; (i) the operator of the facility located on the Substitute Property must be a qualified operator which must possess or must have applied for and obtained all material health care licenses necessary to operate the facility located on the Substitute Property; (j) the facility located on the Substitute Property must be operated as a skilled nursing facility and/or an assisted living facility; (k) an operating lease meeting criteria set forth in the loan agreement is entered into with respect to the Substitute Property, (l) the new Borrower will agree to assume and be bound by the Extendicare Portfolio Mortgage Loan documents and have executed a mortgage with respect to the Substitute Property; (m) the lender receives such evidence that the Substitute Property, the facility thereon and the operations thereof are in compliance with all health care requirements as would be acceptable to a reasonably prudent lender; (n) the lender receives valid certificates of insurance evidencing coverage with respect to the Substitute Property as required in the Extendicare Portfolio Mortgage Loan documents; (o) the lender receives certain third party reports with respect to the zoning, structural and environmental conditions of the Substitute Property; and (p) the applicable Extendicare portfolio Borrower pays all reasonable out-of-pocket costs and expenses incurred by the lender in connection with the substitution.

Other Defeasance/Substitution Provisions.    Certain ‘‘operating lease defaults’’ and/or ‘‘health care defaults’’ relating to individual Extendicare Portfolio Mortgaged Properties (a ‘‘Limited Cure Default’’) will not, in each instance, constitute an event of default under the Extendicare Portfolio Mortgage Loan documents in the event that the Extendicare Portfolio Borrowers either (A) obtain the release of the applicable Extendicare Portfolio Mortgaged Property from the lien of the mortgage thereon by partial defeasance as described under ‘‘—the Mortgage Loan’’ above or (B) effect a substitution of such applicable Extendicare Portfolio Mortgaged Property in accordance with the Extendicare Portfolio Mortgage Loan documents as described under ‘‘—Substitutions’’ above within sixty (60) days (which time period will be extended for such time as is reasonably necessary for the related Extendicare Portfolio Borrower in the exercise of due diligence to obtain such release, such additional period not to exceed thirty (30) days) of such Limited Cure Default. The release amount for each such Extendicare Portfolio Mortgaged Property must be equal to one hundred twenty five percent (125%) of the allocated loan amount for such property (the ‘‘Limited Cure Release Amount’’). If the defeasance lockout date has not occurred, the related Extendicare Portfolio Borrower must deposit the Limited Cure Release Amount with the lender to be held by the lender as additional collateral for the Extendicare Portfolio Mortgage Loan and the related Extendicare Portfolio Borrower must effect such Limited Cure Release within ten (10) business days after the occurrence of the defeasance lockout date. In no event will the Extendicare Portfolio Borrowers be entitled to more than six (6) limited cure releases during the term of the Extendicare Portfolio Mortgage Loan.

With respect to any casualty or condemnation at any individual Extendicare Portfolio Mortgaged Property, in the event the lender does not make the net proceeds available to the Extendicare Portfolio Borrowers for restoration in accordance with the terms of the Extendicare Portfolio Mortgage Loan documents, the Extendicare Portfolio Borrowers may partially defease the Extendicare Portfolio Mortgage Loan and obtain the release of such Extendicare Portfolio Mortgaged Property from the lien of the mortgage thereon in accordance with the Extendicare Portfolio Mortgage Loan documents, except that the release amount for such individual Property must be equal to the allocated loan amount for such Extendicare Portfolio Mortgaged Property.

Revolving Loan.    An affiliate of the related mortgage loan seller, as agent (‘‘Agent’’) for itself and other lenders from time to time (the ‘‘Revolving Loan Lenders’’), entered into an amended and restated credit agreement (the ‘‘Revolving Loan’’) with Extendicare Health Services, Inc. in the maximum principal amount of $120,000,000. The Revolving Loan is guaranteed by Extendicare Holdings Inc. The Revolving Loan is not secured by the Extendicare Portfolio Mortgage Properties or the direct interests of the Extendicare Mortgage Portfolio Borrowers. The Revolving Loan is secured by, among other things, a pledge of the direct and indirect equity interests in the Operators of the Extendicare Portfolio Mortgaged Properties and a pledge of the indirect equity of the Extendicare Portfolio Borrowers and the Master Tenant. The Revolving Loan Lenders have entered into an intercreditor agreement (the ‘‘Extendicare Intercreditor’’) with the mortgage lender. In the Extendicare Intercreditor, the Revolving Loan Lenders and the lender each acknowledge that such lender does not have any interest in the collateral securing the Revolving Loan or the Extendicare Portfolio Loan Combination, as applicable, and agree that they will not advocate, induce or cause any third party to (x) make, initiate or challenge the validity, priority or effectiveness of any assertion or claim in any action, suit or proceeding of any nature whatsoever in any way challenging the priority, validity or effectiveness of the liens and security interests granted to the other lenders or (y) in any way interfere with the lien of the other lender on its collateral or its rights of collection with respect thereto. Additionally, the Revolving Loan Lender’s ability to foreclose on the equity interests in the Extendicare Portfolio Borrowers, the Master Tenant and Healthcare Operators is subject to, among other things: (a) the monthly payment amount continuing to be paid to the lender at all times during any enforcement action pursuant to the Extendicare Intercreditor; (b) there having been no material impairment of the value, use or operation of the Extendicare Portfolio Mortgaged Properties taken as a whole; (c) all

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non-monetary defaults under the Extendicare Portfolio Mortgage Loan documents which are susceptible of cure by any party other than the Extendicare Portfolio Borrowers having been remedied and cured (or proposed remedies and cures have been commenced and are being diligently pursued to the reasonable satisfaction of the lender); (d) the mortgage lender having not commenced an enforcement action; (e) any new borrower being directly or indirectly owned and controlled by a qualified transferee and being a ‘‘special purpose entity’’ meeting applicable criteria of the applicable rating agencies; and (f) Revolving Loan Lender must have received: (i) a rating agency confirmation with respect to such Agent enforcement action and (ii) an additional insolvency opinion and an additional true lease opinion acceptable to the rating agencies). Further, after any foreclosure by the Agent of the pledge of indirect equity interest in the Extendicare Portfolio Borrowers, the Agent or such new borrower, as applicable, will be obligated to commence and diligently pursue to completion the cure of any remaining defaults under the Extendicare Portfolio Mortgage Loan documents which are susceptible of cure by any party other than the original borrower.

Consolidated Leverage Ratio.    At all times during the term of the Extendicare Portfolio Mortgage Loan, Extendicare Health Services Inc. and its subsidiaries, in the aggregate, are required to maintain, as of the last day of each fiscal quarter, a ratio (the ‘‘Consolidated Leverage Ratio’’) of the principal amount of Consolidated Total Debt (as defined below) to consolidated EBITDA for such period that is not in excess of 5.50 to 1.0; provided that after any permitted transfer of the direct or indirect interests in a ‘‘restricted party’’ (as defined under the related loan agreement) that results in a change of control of Extendicare Health Services Inc., Extendicare Health Services Inc. and its subsidiaries in the aggregate are required to maintain a Consolidated Leverage Ratio as of the last day of each fiscal quarter that is not in excess of 7.1 to 1.0. For the purposes of determining the Consolidated Leverage Ratio, ‘‘Consolidated Total Debt’’ includes all indebtedness of Extendicare Health Services Inc. and its subsidiaries (which includes the Extendicare Portfolio Borrower) determined on a consolidated basis (including, without limitation, the Extendicare Portfolio Mortgage Loan, the Revolving Loan, debt for borrowed money and all forms of corporate debt), minus certain Extendicare REIT notes and intercompany loans.

Excess Cash Flow.    If at the end of any calendar quarter the lease DSCR (based on the Master Lease base rent as set forth under ‘‘—Master Lease’’ above) is not at least 1.05x, the related Extendicare Portfolio Borrowers will be required to deposit all excess cash flow into an account designated by lender. Such funds will be additional collateral for the Extendicare Portfolio Mortgage Loan, which funds may be withdrawn by the lender during the continuance of an event of default and applied by the lender in such order and priority as the lender may determine. Any such funds escrowed will be returned to the related the Extendicare Portfolio Borrowers if such lease debt service coverage ratio becomes at least 1.05x for two consecutive determination dates.

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IV. The Reston Town Center Mortgage Loan


Mortgage Loan Information
Cut-off Date Principal Balance: $121,500,000(1)
Loan per Square Foot: $160(2)
% of Initial Mortgage Pool Balance: 4.0%
Shadow Rating (S&P/Fitch): AAA/AAA
Loan Purpose: Refinance
Mortgage Interest Rate: 5.5005% per annum(3)
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(4)
Hyperamortization: NAP(4)
Maturity Date: October 11, 2016
Maturity Balance: $121,500,000
Borrower: VA – Reston Town Center Owner, L.L.C.
Sponsor: EOP Operating Limited Partnership
Defeasance/Prepayment: Defeasance permitted two years after Issue Date. Prepayment without penalty permitted six months prior to maturity date.
Up-Front Reserves: NAP(4)
Ongoing Reserves: Tax and Insurance Reserve(5) Replacement Reserve(6)
  Rollover Reserve(7)
Lockbox: Hard(8)
Other Secured Debt: $89,750,000(1) Subordinate Non-Trust Loan
  Permitted Mezzanine Financing(9)

Mortgaged Property Information
Single Asset/Portfolio: Single Asset
Property Type: Class A Office
Location: Reston, Virginia
Year Built: 1988-1990; 1999
Year Renovated: NAP(4)
Square Feet: 758,364(10)
Occupancy: 97.9%(11)
Occupancy Date: October 9, 2006
Ownership Interest: Fee(12)
Property Management: Equity Office Management L.L.C., an affiliate of the borrower
U/W NCF: $19,327,238(13)
U/W NCF DSCR: 2.85x(14)
Cut-off Date U/W NCF DSCR: 2.85x(14)
Appraised Value: $382,000,000
Appraisal As of Date: September 1, 2006
Cut-off Date LTV Ratio: 31.8%(15)
Maturity LTV Ratio: 31.8%(15)
   
(1) The Reston Town Center Mortgage Loan is part of the Reston Town Center Loan Combination that also includes the Reston Town Center Subordinate Non-Trust Loan in the cut-off date principal amount of $89,750,000.
(2) Based solely on the Reston Town Center Mortgage Loan.
(3) The mortgage interest rate for the Reston Town Center Subordinate Non-Trust Loan is 5.9948%.
(4) NAP means not applicable.
(5) Upon an event of default or if the DSCR falls below 1.10x, the Reston Town Center Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Reston Town Center Mortgaged Property. The Reston Town Center Borrower will not be required to fund the Insurance Reserve provided that all insurance premiums have been paid under Equity Office Property’s blanket policy. The Reston Town Center Borrower may provide a letter of credit in lieu of the reserve funds provided the aggregate amount of the letter of credit is at least the amount of the required reserves.
(6) If (i) a qualified manager is not managing the Reston Town Center Mortgaged Property and (ii) Equity Office Properties does not own at least 20% of the direct or indirect interests in the Reston Town Center Borrower and does not control the Reston Town Center Borrower, then the Reston Town Center Borrower is required to make monthly deposits in the amount of $12,641 into the replacement reserve. The Reston Town Center Borrower may provide a letter of credit in lieu of the reserve funds provided the aggregate amount of the letter of credit is at least the amount of the required reserves.
(7) If more than 10% of the College Entrance Board or the Pfizer space is not subject to a qualifying lease extension or renewal one year prior to the lease termination date in 2009, then the Reston Town Center Borrower is required to make monthly deposits into the rollover reserve up to a maximum of $2,213,880 for the College Entrance Board space and $2,518,960 for the Pfizer space. In addition, upon an event of default or if the DSCR falls below 1.10x, the Reston Town Center Borrower is required to make monthly reserve deposits into the rollover reserve in the amount of $166,666.67 per month up to a maximum of $2,000,000. The Reston Town Center Borrower may provide a letter of credit in lieu of the reserve funds provided the aggregate amount of the letter of credit is at least the amount of the required reserves.
(8) See ‘‘—Lockbox’’ below.
(9) See ‘‘—Permitted Mezzanine Financing’’ below.
(10) Represents the total net rentable area of which 525,224 square feet is office space and 233,140 square feet is retail space, and parking with 2,804 parking spaces.
(11) Weighted average occupancy based on overall office occupancy of 98.2% and retail occupancy of 97.1% as of October 9, 2006, as weighted based on square footage.
(12) A small portion of the Reston Town Center Mortgaged Property is a leasehold interest pursuant to a ground lease expiring October 20, 2095. See ‘‘—Ground Lease’’ below
(13) Reflects in-place U/W NCF. Projected U/W NCF is $21,520,169 based on assumed mark-to market rent adjustments applied to below market tenant leases and certain other lease-up assumptions.

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(14) Based on in-place U/W NCF and calculated based on the annual interest-only payments for the Reston Town Center Mortgage Loan only. The U/W DSCR based on in-place U/W NCF for the entire Reston Town Center Loan Combination is 1.58x. The U/W DSCR based on the projected U/W NCF (described in footnote (13) above) for the Reston Town Center Mortgage Loan only is 3.18x. The U/W DSCR based on that projected U/W NCF for the entire Reston Town Center Loan Combination is 1.76x.
(15) The Cut-off Date LTV Ratio and the Maturity LTV Ratio are based solely on the Reston Town Center Mortgage Loan and do not take into account the Reston Town Center Subordinate Non-Trust Loan. The Cut-off Date LTV Ratio and the Maturity LTV Ratio of the entire Reston Town Center Loan Combination are both 55.3%.

Major Office Tenant Information
Tenant(1) Approximate
Square Feet		 % Total Square
Feet(2)		 % Total Base
Revenues (3)		 Rent PSF (4) Ratings(5) Lease Expiration
Date
College Entrance Board 70,834
13.5
%
 13.1
%
 $ 33.71
NR 9/30/2009
Pfizer.     62,974
12.0
12.4
$ 35.92
AAA/AAA 9/30/2009
Metron, Inc. 45,387
8.6
9.7
$ 37.20
NR 2/29/2012(6)
Learning Tree International 44,488
8.5
8.9
$ 36.54
NR 4/30/2011
Federal Home Loan Banks 27,203
5.2
6.0
$ 39.96
NR 7/31/2009
Total 250,886
47.8
%
 50.2
%
  
   
(1) The five major office tenants are ranked by approximate square feet of the office portion of the Reston Town Center Mortgaged Property.
(2) The percentages of total square feet are based on total office square footage of 525,224 square feet at the Reston Town Center Mortgaged Property.
(3) The percentages of total base revenues are based on in-place underwritten base rental revenues, excluding vacant lease-up assumptions.
(4) Reflects in-place base rent.
(5) Credit ratings are those by S&P and Fitch, respectively, and may reflect the parent company rating even though the parent company may have no obligations under the related lease. NR means not rated.
(6) Approximately 22,691 of Metron, Inc.’s space expires 2/28/2007. The remaining 22,696 square feet expires 2/29/2012.

Major Retail Tenant Information
Tenant(1) Approximate
Square Feet		 % Total Square
Feet(2)		 % Total Base
Revenues (3)		 Rent PSF(4) Ratings(5) Lease Expiration
Date
National Amusements (cinema) 51,511
22.1
%
 16.3
%
 $ 24.39
NR 2/15/2011
Clydes of Reston 12,310
5.3
7.4
$ 46.25
NR 12/31/2010
McCormick and Schmick. 11,176
4.8
3.4
$ 23.53
NR 12/31/2009
Pottery Barn 10,007
4.3
3.7
$ 28.50
NR 1/31/2014
Banana Republic 10,000
4.3
4.0
$ 31.05
BBB−/BBB− 8/31/2008
Total 95,004
40.7
%
 34.8
%
  
   
(1) The five major retail tenants are ranked by approximate square feet of the retail portion of the Reston Town Center Mortgaged Property.
(2) The percentages of total square feet are based on total retail square footage of 233,140 square feet at the Reston Town Center Mortgaged Property.
(3) The percentages of total base revenues are based on underwritten base rental revenues, excluding vacant lease-up assumptions.
(4) Reflects in-place base rent.
(5) Credit ratings are by S&P and Fitch, respectively, and may reflect parent company rating even though the parent company may have no obligations under the related lease. NR means not rated.

Lease Expiration Information–Office
Year Approximate
Expiring Square
Feet		 As % of Total
Square
Feet(1)		 Cumulative % of
Total Square
Feet(1)		 Approximate
Expiring Base
Revenues(2)		 As % of Total
Base
Revenues(2)		 Cumulative % of
Total Base
Revenues(2)
    2006(3) 4,549
0.9
%
 0.9
%
 $ 0
0.0
%
 0.0
%
2007 89,546
17.0
17.9
%
 3,437,397
18.4
18.4
%
2008 52,876
10.1
28.0
%
 1,843,896
9.8
28.2
%
2009 219,271
41.7
69.7
%
 7,972,031
42.6
70.8
%
2010 19,290
3.7
73.4
%
 690,431
3.7
74.5
%
2011 70,939
13.5
86.9
%
 2,765,756
14.8
89.2
%
2012 22,696
4.3
91.2
%
 941,884
5.0
94.3
%
2013 36,700
7.0
98.2
%
 1,071,203
5.7
100.0
%
2014 0
0.0
98.2
%
 0
0.0
100.0
%
2015 0
0.0
98.2
%
 0
0.0
100.0
%
2016 and beyond 0
0.0
98.2
%
 0
0.0
100.0
%
Vacant 9,357
1.8
100.0
%
 0
—
 
Total 525,224
100.0
%
  
$ 18,722,598
100.0
%
  
(1) The percentages of total square feet are based on the total office square feet of the Reston Town Center Mortgaged Property.
(2) Based on in-place underwritten base rental revenues of the office portion of the Reston Town Center Mortgaged Property, excluding vacant lease-up assumptions.
(3) Includes any month-to-month tenants.

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Lease Expiration Information–Retail
Year Approximate
Expiring Square
Feet		 As % of Total
Square
Feet(1)		 Cumulative % of
Total Square
Feet(1)		 Approximate
Expiring Base
Revenues(2)		 As % of Total
Base
Revenues(2)		 Cumulative % of
Total Base
Revenues(2)
    2006(3) 25,198
10.8
%
 10.8
%
 $832,660
10.8
%
 10.8
%
2007 9,614
4.1
14.9
%
 393,541
5.1
15.9
%
2008 17,369
7.5
22.4
%
 652,477
8.5
24.4
%
2009 25,606
11.0
33.4
%
 775,629
10.1
34.4
%
2010 22,054
9.5
42.8
%
 961,046
12.5
46.9
%
2011 83,663
35.9
78.7
%
 2,499,707
32.4
79.3
%
2012 3,117
1.3
80.0
%
 140,540
1.8
81.1
%
2013 5,806
2.5
82.5
%
 283,489
3.7
84.8
%
2014 17,699
7.6
90.1
%
 554,383
7.2
92.0
%
2015 9,436
4.0
94.2
%
 377,923
4.9
96.9
%
2016 and beyond 6,925
3.0
97.1
%
 238,913
3.1
100.0
%
Vacant 6,653
2.9
100.0
%
 0
—
 
Total 233,140
100.0
%
  
$7,710,308
100.0
%
  
(1) The percentages of total square feet are based on total retail square feet of the Reston Town Center Mortgaged Property.
(2) Based on in-place underwritten base rental revenues of the retail portion of the Reston Town Center Mortgaged Property excluding vacant lease up assumptions.
(3) Includes any month-to-month tenants.

The Borrower and Sponsor.    The Reston Town Center Borrower is VA–Reston Town Center, L.L.C., a Delaware limited liability company, that is 100% indirectly owned and controlled by EOP Operating Limited Partnership (rated BBB/BBB by S&P and Fitch, respectively). EOP Operating Limited Partnership is the principal operating partnership of Equity Office Properties Trust, a Maryland real estate investment trust, and the Reston Town Center sponsor. Equity Office Properties Trust is the nation’s largest publicly traded office building owner and manager with a total office portfolio conisisting of whole or partial interests in more than 590 buildings comprising over 105 million square feet of office space in the country’s major metropolitan markets. Equity Office Properties Trust’s origin dates back to 1976 when Sam Zell, chairman, founded an integrated real estate management and acquisition organization. Since its initital public offering in 1997, Equity Office Properties Trust has nearly quadrupled in size through strategic mergers and acquisitions totaling more than $17 billion. Equity Office Properties Trust is listed on the New York Stock Exchange under the symbol EOP.

The Mortgage Loan.    The Reston Town Center Loan is part of the Reston Town Center Loan Combination which is comprised of (i) the Reston Town Center Mortgage Loan and (ii) the Reston Town Center Subordinate Non-Trust Loan in the amount of $89,750,000. Both of the mortgage loans which comprise the Reston Town Center Loan Combination are secured by the Reston Town Center Mortgaged Property. The Reston Town Center Subordinate Non-Trust Loan, which will not be included in the trust, is, subsequent to an event of default on the Reston Town Center Loan Combination, subordinate in right of payment to the Reston Town Center Mortgage Loan. Both of the mortgage loans in the Reston Town Center Loan Combination are obligations of the Reston Town Center Borrower and are cross-defaulted with each other. The respective rights of the holders of the Reston Town Center Mortgage Loan and the Reston Town Center Subordinate Non-Trust Loan will be governed by the Reston Town Center Co-Lender Agreement. See ‘‘Loan Combinations—The Reston Town Center Loan Combination.’’

The Reston Town Center Loan Combination was originated on October 10, 2006 and has a cut-off date principal balance of $121,500,000. The Reston Town Center Loan Combination is ten-year loan with a stated maturity date of October 11, 2016. The Reston Town Center Mortgage Loan accrues interest on an Actual/360 Basis at a fixed interest rate, in the absence of default, of 5.5005% per annum. On the eleventh day of each month to, but not including the stated maturity date, the Reston Town Center Borrower is required to make interest-only payments on the Reston Town Center Mortgage Loan. The principal balance of the Reston Town Center Mortgage Loan plus all accrued and unpaid interest thereon is due and payable on the stated maturity date.

The Reston Town Center Borrower is prohibited from voluntarily prepaying the Reston Town Center Mortgage Loan, in whole or in part, prior to April 11, 2016. From and after April 11, 2016, the Reston Town Center Borrower may prepay the Reston Town Center Mortgage Loan, in whole only, without payment of any prepayment fee or penalty.

The Reston Town Center Borrower may defease the Reston Town Center Mortgage Loan in whole only on any date following the second anniversary of the Issue Date and prior to April 11, 2016, and by doing so obtain the release of the Reston Town Center Mortgaged Property. A defeasance will be effected by the Reston Town Center Borrower's pledging

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substitute collateral that consists of direct non-callable obligations of the United States of America that produce payments which replicate the payment obligations of the Reston Town Center Borrower under the Reston Town Center Mortgage Loan and are sufficient to pay off the Reston Town Center Mortgage Loan in its entirety on the stated maturity date. The Reston Town Center Borrower's right to defease the entire Reston Town Center Mortgage Loan is subject to, among other things, the applicable rating agencies each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency and is further conditioned on the Reston Town Center Non-Trust Mortgage Loan being simultaneously prepaid in whole.

The Mortgaged Property.    The Reston Town Center Loan Combination is secured by a first priority mortgage lien on the fee simple and leasehold interests of the Reston Town Center Borrower in the Reston Town Center Mortgaged Property, a Class A office property situated in Reston, Virginia. The Reston Town Center Mortgaged Property consists of two 11-story office buildings, one three-story building, two parking garages (one with a retail component), and a leasehold interest in 8,502 square feet of retail space located on the ground floor of the neighboring Hyatt Regency Hotel. The Reston Town Center Mortgaged Property also contains a lighted and covered ice rink and a 13-screen cinema. Two parking garages are part of the Reston Town Center Mortgaged Property and contain approximately 2,804 parking spaces. There is no income generated from the parking spaces. Each of the buildings were constructed between 1988-1990, with the exception of the area known as the New Garage which was constructed in 1999. The 525,224 square feet of office space is leased to multiple tenants including the College Entrance Board leasing 70,834 square feet (13.5% of total office space), a not-for-profit membership association whose mission is to connect students to college success and opportunity, Pfizer (rated AAA/AAA by S&P and Fitch, respectively) leasing 62,974 square feet (12.0% of the total office space) through September 2009, and Metron, Inc, a scientific consulting company, leasing 45,387 square feet (8.6% of the total office space) through February 2012. As of October 9, 2006, based on square footage leased, occupancy at the office portion of the Reston Town Center Mortgaged Property was 98.2%. The retail component consists of 233,140 square feet, including a 13-screen cinema. Retail tenants include Clyde’s of Reston, McCormick and Schmick, Pottery Barn, Banana Republic and Angelo & Maxie’s Steakhouse. Overall retail occupancy for the retail component, based on square footage leased, was 97.1% as of October 9, 2006. Combined overall weighted average occupancy for the retail and office components at the Reston Town Center Mortgaged Property, weighted based on square footage, was 97.9% as of October 9, 2006.

Lockbox.    The Reston Town Center Borrower is required under the Reston Town Center Mortgage Loan to establish an account (the ‘‘Reston Town Center Lockbox Account’’) under the control of the lender into which all tenants at the Reston Town Center Mortgaged Property are required to directly deposit their applicable rents. Provided that a Reston Town Center Trigger Event (defined below) has not occurred or is not continuing under the Reston Town Center Mortgage Loan, all rents on deposit in the Reston Town Center Lockbox Account will be released to the Reston Town Center Borrower. Upon the occurrence and during the continuance of a Reston Town Center Trigger Event, all rents on deposit in the Reston Town Center Lockbox Account are to be applied as set forth below. A ‘‘Reston Town Center Trigger Event’’ is the occurrence of one or more of the following events: (i) any time that the DSCR for the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan is less than 1.10x, (ii) an event of default under the Reston Town Center Mortgage Loan, (iii) any time deposits are then required to the replacement reserve or (iv) any time deposits are then required to the rollover reserve.

Upon the occurrence and during the continuance of a Reston Town Center Trigger Event, all amounts on deposit in the Reston Town Center Lockbox Account are required to be transferred each business day to an account to be established by the Reston Town Center Borrower under the control of the lender and unless the Reston Town Center Trigger Event is an event of default under the Reston Town Center Mortgage Loan, will applied in the following order of priority: (i) if the DSCR for the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan is less than 1.10x, an amount equal to 1/12th of the amount due for taxes will be deposited in the applicable reserve account, (ii) if the DSCR for the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan is less than 1.10x, an amount equal to 1/12th of the amount due for insurance premiums will be deposited in the applicable reserve account, (iii) the amount due for interest on the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan will be paid to the applicable lender, (iv) if reserves are then required to the replacement reserve, an amount equal to the sums required to be deposited therein will be deposited in the applicable reserve account, (v) an amount equal to the operating expenses based on the annual budget will be paid to the Reston Town Center Borrower, (vi) if the DSCR is less than 1.10x, an amount equal to the required deposit to the rollover reserve for portions of the Reston Town Center Mortgaged Property other than the College Board space and the Pfizer space, which amount will be deposited in the applicable rollover reserve account, (vii) if deposits are then required to the rollover reserve for portions of the Reston Town Center Mortgaged Property pertaining to the College Board space and the Pfizer space, the applicable amount will be deposited in the applicable rollover reserve account,

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(viii) any other amounts due to the lender, and (ix) provided that an event of default shall not have occurred, the balance remaining will be paid to the Reston Town Center Borrower. Upon the occurrence of an event of default under the Reston Town Center Mortgage Loan, all amounts on deposit in the Reston Town Center Lockbox Account are required to be transferred each business day to an account to be established by the Reston Town Center Borrower under the control of the lender and will be applied as the lender in its sole discretion determines.

Terrorism Coverage.    As long as TRIA is in effect (including any extensions or if another federal governmental program is in effect which provides substantially similar protections as TRIA), the Reston Town Center Borrower is required to maintain insurance against terrorism, terrorist acts (including bio-terrorism) or similar acts of sabotage. For any period during which TRIA or another federal governmental program which provides substantially similar protections as TRIA is not in effect, the Reston Town Center Borrower is not be obligated to expend more than $125,000 in any fiscal year on insurance premiums for terrorism insurance and if the cost of the terrorism insurance exceeds $125,000 in any fiscal year, the Reston Town Center Borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to the $125,000.

Permitted Mezzanine Financing.    Provided that no event of default has occurred and is continuing under the Reston Town Center Mortgage Loan, the Reston Town Center Borrower may permit persons owning direct or indirect interests in the Reston Town Center Borrower to incur indebtedness secured by a pledge of interests in the Reston Town Center Borrower provided that the certain conditions set forth in the Reston Town Center Mortgage Loan are satisfied including, without limitation: (a) that a right of first offer to provide such mezzanine financing is given to Teachers Insurance and Annuity Association of America; (b) delivery of an intercreditor agreement in form and substance acceptable to the applicable rating agencies and reasonably acceptable to the lender; (c) the DSCR for the immediately preceding 12-month period, which will be calculated on the basis of the Reston Town Center Mortgage Loan, the Reston Town Center Non-Trust Loan and the permitted mezzanine debt, is not less than 1.25x; (d) the loan-to-value ratio immediately following the closing of the mezzanine loan based on the aggregate principal balance of the Reston Town Center Mortgage Loan, the Reston Town Center Non-Trust Loan and the permitted mezzanine loan is no greater than 75% based on an appraisal reasonably acceptable to the lender; and the applicable rating agencies have confirmed in writing that such permitted mezzanine debt will not, in and of itself, result in a downgrade, withdrawal or qualification of the then current ratings assigned in connection with LB-UBS 2006-C7 Certificates. In lieu of the mezzanine loan as described in the preceding sentence, in the event Teachers Insurance and Annuity Association of America is the holder of the Reston Town Center Non-Trust Loan, Teachers Insurance and Annuity Association of America will have the right to structure the permitted mezzanine loan as an increase in the principal amount of the Reston Town Center Non-Trust Loan in which event all of the conditions which would otherwise apply to the permitted mezzanine loan will apply thereto.

Ground Lease.    A portion of the Reston Town Center Mortgaged Property consists of a leasehold interest in 8,502 square feet of space on the first floor of the neighboring Hyatt Regency Reston pursuant to a 99-year lease from an unrelated third party, expiring October 20, 2095. The rent payable by the Reston Town Center Borrower is $1 per year plus a pro rata share of real estate taxes, premiums for fire and extended insurance on the building where the leased premises are situated, HVAC costs and the cost of utilities serving the premises to the extent not separately billed to Reston Town Center Borrower by the provider. The Reston Town Center Mortgaged Property ground lease may expire earlier than October 20, 2095 if more than 20% of either the floor area of the premises subject to Reston Town Center Mortgaged Property ground lease or the Hyatt Regency Reston is damaged or destroyed, or (ii) if any damage to either the floor area of the premises subject to Reston Town Center Mortgaged Property ground lease or the Hyatt Regency Reston cannot, in landlord’s reasonable judgment, be substantially repaired within 180 days after the date of the damage, or (iii) if the damage to the floor area of the premises subject to Reston Town Center Mortgaged Property ground lease or the Hyatt Regency Reston occurs during the last two lease years of the Reston Town Center Mortgaged Property ground lease, the landlord may terminate the Reston Town Center Mortgaged Property ground lease by 60 days written notice to the Reston Town Center Borrower. The Reston Town Center Mortgaged Property ground lease allows the Reston Town Center Borrower to mortgage its interest but the Reston Town Center Mortgaged Property ground lease does not have any of the financing provisions typically found in financeable ground leases.

Guaranty of Payment.    At origination, the Reston Town Center Borrower caused the sponsor to deliver a guaranty of the amounts required to be on deposit in the rollover reserve as to portions of the Reston Town Center Mortgaged Property pertaining to the College Board space and the Pfizer space.

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V. The Colony Square Mortgage Loan

    


Mortgage Loan Information
Cut-off Date Principal Balance: $116,000,000
Loan per Square Foot: $140
% of Initial Mortgage Pool Balance: 3.8%
Shadow Rating (S&P/Fitch): NAP(1)
Loan Purpose: Acquisition
Mortgage Interest Rate: 5.762% per annum
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: October 11, 2011
Maturity Balance: $116,000,000
Borrower: Colony Square, L.P.
Sponsor: Tishman Speyer Real Estate Venture VI, L.P. and an affiliate of Lehman Brothers
Defeasance/Prepayment: Defeasance permitted two years after Issue Date. Prepayment with penalty permitted twelve months prior to maturity date. Prepayment without penalty permitted six months prior to maturity date.
Up-Front Reserves: Unfunded Tenant Obligations Reserve(2)
Ongoing Reserves: Unfunded Tenant Obligations Reserve(2)
  Tax and Insurance Reserve(3)
  Replacement Reserve(4)
  Leasing Reserve(5)
Lockbox: Hard(6)
Other Secured Debt: $12,170,744 Unfunded Mezzanine Financing(7)

Mortgaged Property Information
Single Asset/Portfolio: Single Asset
Property Type: Class A Office
Location: Atlanta, Georgia
Year Built: 1970 and 1973
Year Renovated: 1980 and 1998
Square Feet: 827,252
Occupancy: 91.1%
Occupancy Date: September 1, 2006
Ownership Interest: Fee
Property Management: Tishman Speyer Properties, L.P., an affiliate of the borrower
U/W NCF: $9,316,923(8)
U/W NCF DSCR: 1.37x(9)
Cut-off Date U/W NCF DSCR: 1.37x(9)
Appraised Value: $170,000,000
Appraisal As of Date: August 1, 2006
Cut-off Date LTV Ratio: 68.2%
Maturity LTV Ratio: 68.2%
 
(1) NAP means not applicable.
(2) At closing, the Colony Square Borrower deposited $864,487 into an unfunded tenant obligations reserve account for tenant allowances, tenant improvements and leasing commissions at the Colony Square Mortgaged Property. In addition, $68,818 will be deposited monthly into this account.
(3) The Colony Square Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Colony Square Mortgaged Property. Notwithstanding the foregoing, so long as the Colony Square Borrower provides evidence of a blanket insurance policy covering the Colony Square Mortgaged Property, the monthly insurance escrow payments will not be required.
(4) The Colony Square Borrower is required to make monthly deposits into the replacement reserve account in the amount of $10,323 for costs related to replacements and repairs at the Colony Square Mortgaged Property.
(5) The Colony Square Borrower is required to deposit into the leasing reserve any lease termination payments in excess of $500,000 to be used for tenant improvements, leasing commissions and legal expenses related to leases at the Colony Square Mortgaged Property.
(6) See ‘‘—Lockbox’’ below.
(7) Reflects the portion of a $35,000,000 unfunded mezzanine facility allocated to the Colony Square Mortgaged Property . See ‘‘—Mezzanine Financing’’ below.
(8) Reflects in-place U/W NCF. Projected U/W NCF is $9,809,136 based on assumed lease-up of vacant space at 95% occupancy at the current weighted average rent at the Colony Square Mortgaged Property.
(9) Based on U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $9,809,136 (described in footnote (8) above) is 1.45x.

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Major Tenant Information
Tenant(1) Approximate
Square Feet		 % Total Square
Feet		 % Total Base
Revenues(2)		 Rent PSF(3) Ratings(4) Lease Expiration
Date
Merrill Lynch, Pierce, Fenner 94,590
11.4
%
 13.0
%
 $ 21.42
A+/AA− 4/30/2009
AIG Aviation, Inc. 51,059
6.2
6.7
$ 20.43
AA/AA 4/30/2016
CBS Radio East, Inc. 29,688
3.6
3.6
$ 18.77
BBB+/BBB 1/31/2015
WebMD, Inc.(5). 28,816
3.5
3.7
$ 20.00
NR 8/31/2010
Lord, Aeck and Sargent, Inc. 26,986
3.3
3.8
$ 21.51
NR 1/31/2014
Total 231,139
27.9
%
 30.8
%
  
   
(1) The five major tenants are ranked by approximate total square feet.
(2) The percentages of total base revenues are based on in-place underwritten base rental revenues.
(3) Reflects in-place base rent.
(4) Credit ratings are those by S&P and Fitch, respectively, and may reflect the parent company rating even though the parent company may have no obligations under the related lease. NR means not rated.
(5) WebMD, Inc.'s lease provides for a termination option effective 8/31/08, provided the tenant gives notice no later than 11/30/07 and simultaneously, with the termination notice, pays a fee equal to five months of the then current rent.

Lease Expiration Information
Year Approximate
Expiring Square
Feet		 As % of Total
Square Feet		 Cumulative % of
Total Square
Feet		 Approximate
Expiring Base
Revenues(1)		 As % of Total
Base Revenues(1)		 Cumulative % of
Total Base
Revenues(1)
2006(2) 56,480
6.8
%
 6.8
%
 $ 1,188,789
7.6
%
 7.6
%
2007 78,658
9.5
16.3
%
 1,747,741
11.2
18.8
%
2008 84,793
10.2
26.6
%
 1,734,274
11.1
29.9
%
2009 175,090
21.2
47.8
%
 3,635,252
23.3
53.2
%
2010 79,484
9.6
57.4
%
 1,725,435
11.0
64.2
%
2011 63,866
7.7
65.1
%
 1,311,743
8.4
72.6
%
2012 25,185
3.0
68.1
%
 542,659
3.5
76.1
%
2013 2,753
0.3
68.5
%
 74,248
0.5
76.6
%
2014 83,117
10.0
78.5
%
 1,569,310
10.0
86.6
%
2015 47,634
5.8
84.3
%
 911,379
5.8
92.4
%
2016 and beyond 56,775
6.9
91.1
%
 1,181,150
7.6
100.0
%
Vacant 73,417
8.9
100.0
%
 0
—
 
Total 827,252
100.0
%
  
$ 15,621,980
100.0
%
  
(1) Based on in-place underwritten base rental revenues.
(2) Includes any month-to-month tenants.

The Borrower and Sponsor.    The Colony Square Borrower is Colony Square L.P., a Delaware limited liability company. The sponsor of the Colony Square Borrower is Tishman Speyer Real Estate Venture VI, L.P. Founded in 1978 by Robert Tishman, Tishman Speyer operates from its headquarters in Manhattan and from 17 other offices worldwide including offices in Frankfurt, Berlin, London, Paris, Madrid, Bangalore, São Paulo and Sydney, as well as eight other offices in the United States. Since its formation, Tishman Speyer has developed or acquired a portfolio of over 77 million square feet of constructed area valued at over $24 billion. In addition to well known developments of high rise office buildings in major urban locations, Tishman Speyer also creates mixed use, retail, residential and entertainment centers, as well as mid and low rise office buildings. An affiliate of the related mortgage loan seller is an indirect equity holder in the Colony Square Borrower.

The Mortgage Loan.    The Colony Square Mortgage Loan was originated on October 3, 2006 and has a cut-off date principal balance of $116,000,000. The Colony Square Mortgage Loan is a five-year loan with a stated maturity date of October 11, 2011. The Colony Square Mortgage Loan accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 5.762% per annum. On the eleventh day of each month to but not including the stated maturity date, the Colony Square Borrower is required to make interest-only payments on the Colony Square Mortgage Loan. The principal balance of the Colony Square Mortgage Loan, plus all accrued and unpaid interest thereon, is due and payable on the stated maturity date.

The Colony Square Borrower is prohibited from voluntarily prepaying the Colony Square Mortgage Loan, in whole or in part, prior to October 11, 2010. From and after October 11, 2010, the Colony Square Borrower may prepay the Colony

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Square Mortgage Loan, in whole only, provided that (x) the Mezzanine Facility Loan (as defined below) in an amount equal to a release price allocated to the Colony Square Mortgaged Property under the mezzanine facility loan documents is simultaneously prepaid and (y) for a prepayment of the Colony Square Mortgage Loan made prior to April 11, 2011, the prepayment is accompanied by payment of a yield maintenance premium. From and after April 11, 2011, the Colony Square Borrower may prepay the Colony Square Mortgage Loan in whole only without payment of any yield maintenance premium.

The Colony Square Borrower may defease the Colony Square Mortgage Loan, in whole only, on any monthly payment date following the earlier of (i) the second anniversary of the Issue Date or (ii) the third anniversary of the origination of the Colony Square Mortgage Loan, and by doing so obtain the release of the Colony Square Mortgaged Property. A defeasance will be effected by the Colony Square Borrower's pledging substitute collateral that consists of direct, non-callable, fixed rate obligations that are ‘‘government securities’’ within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, that produce payments which replicate the payment obligations of the Colony Square Borrower under the Colony Square Mortgage Loan and are sufficient to pay off the Colony Square Mortgage Loan in its entirety on April 11, 2011. The Colony Square Borrower's right to defease the entire Colony Square Mortgage Loan is subject to, among other things, (i) the applicable rating agencies each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 Certificates by such rating agency and (ii) the prepayment of the Mezzanine Facility Loan in an amount equal to a release price allocated to the Colony Square Mortgaged Property under the Mezzanine Facility Loan documents.

The Mortgaged Property.    The Colony Square Mortgage Loan is secured by a first priority mortgage lien on the fee simple interest of the Colony Square Borrower in the Colony Square Mortgaged Property, a Class A office complex located on Peachtree Street in the Midtown office submarket of Atlanta, Georgia. The Colony Square Mortgaged Property contains a net rentable area of 827,252 square feet comprised of two office towers with an aggregate of 685,902 square feet known as Colony 100 and Colony 400, retail space, and a three-level underground garage with approximately 1,681 parking spaces. Built in 1970, Colony 100 is 22 stories and has 311,709 square feet of net rentable area while Colony 400, built in 1973, is 24 stories and contains 374,193 square feet. The Colony Square Mortgaged Property contains approximately 141,350 square feet of retail space. The Colony Square Mortgaged Property is leased by multiple tenants. The major tenants at the property are Merrill Lynch, Pierce, Fenner (rated A+/AA− by S&P and Fitch, respectively), leasing 94,590 square feet (11.4% of the total office space) through April 2009, AIG Aviation, Inc. (rated AA/AA by S&P and Fitch respectively), leasing 51,059 square feet (6.2% of the total space) through April 2016, and CBS Radio East, Inc. (rated BBB+/BBB by S&P and Fitch, respectively), leasing 29,688 square feet (3.6% of the total space) through January 2015. As of September 1, 2006 overall occupancy at the Colony Square Mortgaged Property, based on square footage leased, was 91.1%.

Lockbox.    The Colony Square Borrower is required to directly deposit or cause to be deposited all rents and other income from the Colony Square Mortgaged Property into a segregated lockbox account controlled by, and pledged to, the lender. All funds on deposit in such lockbox account are required to be allocated on each business day as follows: (a) to the tax account in the amount of the monthly deposit for taxes; (b) to the insurance premium account in the amount of the monthly deposit for insurance premiums if any are required; (c) to the debt service account in the amount of monthly payment of the debt service; (d) to the replacement reserve account in the amount of the monthly replacement reserve deposit; (e) to the unfunded tenant obligations reserve account in the amount of the monthly unfunded tenant obligations reserve deposit; (f) to the lockbox bank in the amount of any outstanding fees and expenses of such bank; (g) to the debt service account in the amount of funds sufficient to pay any interest accruing at the default rate and late payment charges; (h) provided no event of default exists, to the holder of the Mezzanine Facility Loan in an amount equal to the monthly debt service due under the Mezzanine Facility Loan; (i) provided no event of default exists, upon the occurrence of an event of default under the Mezzanine Facility Loan or the failure of a debt service coverage ratio test under the Mezzanine Facility Loan, to the operating expense account in an amount equal to budgeted monthly operating expenses and any extraordinary operating expenses approved by lender for disbursement to the Colony Square Borrower; and (j) provided no event of default exists, all sums on deposit in the lockbox account after the foregoing deposits under clauses (a) through (i) above will be disbursed (A), to the holder of the Mezzanine Facility Loan if the lender has received notice that an event of default exists under the Mezzanine Facility Loan or (B) to the Colony Square Borrower if the lender has not received notice that an event of default exists under the Mezzanine Facility Loan.

Terrorism Coverage.    The Colony Square Borrower is required to maintain insurance against terrorism, terrorist acts or similar acts of sabotage, but excluding acts of war with coverage amounts of not less than an amount equal to the full insurable value of the Colony Square Mortgaged Property (the ‘‘Terrorism Insurance Required Amount’’) and the business interruption/rent loss insurance required under the loan documents may not contain an exclusion from coverage under such policy for loss incurred as a result of an act of terrorism (but may contain an exclusion for acts of war). Notwithstanding the

S-103



foregoing sentence, the Colony Square Borrower is not obligated to expend more than (i) $50,000 if the Property is controlled by certain individuals affiliated with Tishman Speyer and Colony Square Borrower maintains the insurance for the Colony Square Mortgaged Property under a blanket policy maintained by the property manager or an entity controlled by one or more designated individuals affiliated with Tishman Speyer or (ii) $100,000 if either (A) the Colony Square Mortgaged Property is not controlled by certain individuals affiliated with Tishman Speyer or (B) the insurance for the Colony Square Mortgaged Property is maintained under a stand alone policy, in any fiscal year on insurance premiums for terrorism insurance, as adjusted to reflect any increase during the preceding year in the consumer price index (the ’’Terrorism Insurance Cap’’) and if the cost of the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap, Borrower shall purchase the maximum amount of terrorism insurance obtainable for a premium equal in amount to the Terrorism Insurance Cap.

Mezzanine Financing.    The ‘‘Mezzanine Facility Loan’’ in the maximum principal amount of $35,000,000 was made by the related mortgage loan seller, individually and as the agent for one or more other lenders, to certain direct and indirect owners of the Colony Square Borrower together with certain direct and indirect owners of affiliates of the Colony Square Borrower, on a joint and several basis (collectively, the ‘‘Mezzanine Facility Borrower’’). The Mezzanine Facility Loan accrues interest at a floating rate per annum and matures on October 6, 2011. The Mezzanine Facility Loan is secured by pledges of 100% of the equity interests in eight Delaware limited partnerships and eight Delaware limited liability companies. Such pledges include one Delaware limited partnership and one Delaware limited liability company which owns, indirectly, 100% of the equity interests in the Colony Square Borrower. The balance of the equity interests securing the Mezzanine Facility Loan relate to the owners of 4 other properties owned by affiliates of the Borrower (one of which is the Midtown Plaza Mortgaged Property). A default by any Mezzanine Facility Borrower will constitute a default under the Mezzanine Facility Loan and a default by the owner of such other properties owned by affiliates of the Colony Square Borrower under any mortgage loan encumbering such other properties owned by affiliates of the Colony Square Borrower will constitute a default under the Mezzanine Facility Loan.

The Mezzanine Facility Borrower did not receive any proceeds of the Mezzanine Facility Loan at origination, but is entitled to receive future facility advances to be used to pay for (i) debt service shortfalls on the Mezzanine Facility Loan, (ii) required repairs, replacements, tenant improvements, tenant allowances, leasing commissions, or legal expenses at the Colony Square Mortgaged Property or certain other properties owned by affiliates of the Borrower, (iii) budgeted capital expenditures or other discretionary capital expenditures for the Colony Square Mortgaged Property or certain other properties owned by affiliates of the Colony Square Borrower, (iv) debt service shortfalls on the Colony Square Mortgage Loan or certain other mortgage loans made by lender to certain affiliates of the Colony Square Borrower, or (v) with respect to the Colony Square Mortgaged Property and certain other properties owned by affiliates of the Colony Square Borrower, certain costs and expenses of architects, engineers, surveyors and attorneys in connection with the subdivision of certain development parcels at certain other properties owned by affiliates of the Colony Square Borrower, the preparation of surveys, plans and specifications, architectural drawings, site plans, and in obtaining building permits, and variances, together with the cost of such permits and variances and other similar costs.

The Mezzanine Facility Loan may be prepaid in whole or in part at any time by the Mezzanine Facility Borrower. Provided the original Mezzanine Facility Loan has been repaid in full and terminated, the Mezzanine Facility Borrower will be permitted to incur and have outstanding at any given time a single indebtedness not to exceed an aggregate principal amount equal to $35,000,000 extended by a lender (meeting certain qualifications set forth in the Colony Square Mortgage Loan agreement) and secured by first lien pledges of indirect ownership interests in the Colony Square Borrower and certain other affiliates of the Colony Square Borrower that own various other properties, provided certain conditions described in the Colony Square Mortgage Loan agreement are satisfied including, but not limited to, the delivery of an intercreditor agreement reasonably satisfactory to the lender and loan-to-value ratio not to exceed 80%.

Mezzanine Intercreditor Agreement.    The mortgage lender has entered into an intercreditor agreement (the ‘‘Intercreditor Agreement’’) with the lender under the Mezzanine Facility Loan (the ‘‘Mezzanine Facility Lender’’), that sets forth the relative priorities between the Colony Square Mortgage Loan and the Mezzanine Facility Loan. The Intercreditor Agreement provides that, among other things:

S-104



•  The Mezzanine Facility Loan is generally subordinate to the Colony Square Mortgage Loan in right of payment; provided, however, that so long as no event of default has occurred and is continuing with respect to the Colony Square Mortgage Loan, subject to the terms of the Intercreditor Agreement, the Mezzanine Facility Lender may accept payments due and payable from time to time under the loan documents evidencing or securing the Mezzanine Facility Loan and prepayments of the Mezzanine Facility Loan made in accordance with loan documents evidencing or securing the Mezzanine Facility Loan.
•  Pursuant to the terms of the Intercreditor Agreement the Mezzanine Facility Lender may not exercise any rights it may have under the Mezzanine Facility loan documents with respect to a foreclosure or other realization upon the collateral for the Mezzanine Facility Loan without obtaining confirmation from the applicable rating agencies that such realization will not result in a downgrade, qualification or withdrawal of the applicable rating or ratings ascribed by such rating agency to any of the series 2006-C7 certificates then outstanding unless (i) the transferee of title to such collateral meets certain standards set forth in the Intercreditor Agreement, (ii) the Colony Square Mortgaged Property is managed by a manager meeting certain standards set forth in the Intercreditor Agreement and (iii) a cash management system meeting the requirements of the Intercreditor Agreement is in place.
•  Upon an ‘‘event of default’’ under the Mezzanine Facility Loan, the Mezzanine Facility Lender will have the right, subject to the terms of the Intercreditor Agreement, to select a replacement manager for the Colony Square Mortgaged Property.
•  The Mezzanine Facility Lender has the right to receive notice of any event of default under the Colony Square Mortgage Loan and the right to cure any monetary default within a period ending 5 business days after the later of receipt of such notice or the expiration of the Borrower’s cure periods under the Colony Square Mortgage Loan documents; provided that the Mezzanine Facility Lender will not have the right to cure with respect to monthly scheduled debt service payments for a period of more than four consecutive months unless the Mezzanine Facility Lender has commenced and is continuing to diligently pursue its rights against the collateral for the Mezzanine Facility Loan. In addition, if the default is of a non-monetary nature, the Mezzanine Facility Lender will have the same amount of time as the Colony Square Borrower’s cure period to cure such non-monetary default plus 10 business days; provided, that, if such non-monetary default is susceptible of cure but cannot reasonably be cured within that period (or is not susceptible of cure without foreclosure on the collateral for the Mezzanine Facility Loan) then, subject to certain conditions, the Mezzanine Facility Lender will be given an additional period of time as is reasonably necessary in the exercise of due diligence to cure such non-monetary default or to pursue such foreclosure.
•  If the Colony Square Mortgage Loan has been accelerated, or any proceeding to foreclose or otherwise enforce the mortgage or other security for the Colony Square Mortgage Loan has been commenced, or if the Colony Square Mortgage Loan is a ‘‘specially serviced’’ loan, then, subject to the terms of the Intercreditor Agreement, the Mezzanine Facility Lender will have the right to purchase the Colony Square Mortgage Loan in whole for a price equal to the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon (including, without limitation, any late charges, default interest, exit fees, advances and post-petition interest), any protective advances made by the mortgagee and any interest on any advances.
•  The loan documents evidencing and securing the Mezzanine Facility Loan generally may be modified without the mortgage lender’s consent, except that certain provisions may not be modified without the mortgage lender’s consent, including, without limitation, a material increase in any monetary obligations of the Mezzanine Facility Borrower. Notwithstanding the foregoing, upon the occurrence of an event of default under the loan documents evidencing or securing the Mezzanine Facility Loan, the Mezzanine Facility Lender will be permitted, subject to the satisfaction of certain conditions, to amend or modify the Mezzanine Facility Loan in connection with a work-out or other surrender, compromise, release, renewal or modification of the Mezzanine Facility Loan.

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VI. The Republic Portfolio Mortgage Loan

    


Mortgage Loan Information
Cut-off Date Balance: $100,000,000
Loan per Square Foot: $188.32
% of Initial Mortgage Pool Balance: 3.3%
Shadow Rating (S&P/Moody’s): NAP(1)
Loan Purpose: Refinance
Mortgage Interest Rate: 6.090% per annum
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: 30 years(2)
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: October 1, 2016
Maturity Balance: $96,435,795.86
Borrower: Republic Park, LLC
Sponsor: Republic Property Limited Partnership
Defeasance/Prepayment: Defeasance permitted beginning two years after Issue Date. Prepayment without penalty permitted four months prior to maturity date.
Up-Front Reserves: Letter of Credit(3)
Ongoing Reserves: Tax and Insurance(4)
  Replacement Reserve(5)
Lockbox: None
Other Secured Debt: None

    


Mortgaged Property Information
Single Asset/Portfolio: Portfolio
Property Type: Class A Office
Location: Herndon, Virginia
Year Built: 1998 & 2000
Year Renovated: NAP
Square Feet: 531,008
Occupancy: 93.0%
Occupancy Date: September 1, 2006 & September 6, 2006
Ownership Interest: Fee Simple
Property Management: Republic Properties Corporation
U/W NCF: $8,508,900
U/W NCF DSCR: 1.17x(6)
Cut-off Date U/W NCF DSCR: 1.38x(7)
Aggregate Appraised Value: $144,900,000
Appraisal As of Date: September 12, 2006 & October 24, 2006
Aggregate Cut-off Date LTV Ratio: 69.01%
Aggregate Maturity LTV Ratio: 66.55%
   
(1) NAP means not applicable.
(2) Payments of interest only are required through and including the payment date in October 2013.
(3) The Republic Portfolio Borrower delivered a $5,000,000 irrevocable Letter of Credit at closing. The Letter of Credit will be held by lender as security for payment of the Debt and the performance of Borrower’s obligations under the Loan Documents. Upon the occurrence of an event of default, lender may draw upon the Letter of Credit.
(4) The Republic Portfolio Borrower is required to make monthly deposits into a tax and insurance reserve account in an amount equal to one-twelfth of the estimated annual real estate taxes and one-twelfth of the insurance premiums, estimated by the lender due for the renewal of insurance policies. Notwithstanding the foregoing, the monthly tax and insurance reserves will not be required so long as no event of default has occurred and the Republic Portfolio Mortgaged Property is covered under a blanket insurance policy for the Republic Portfolio Mortgaged Property.
(5) The Republic Portfolio Borrower is required to make monthly deposits of $8,850 into a replacement reserve account until the minimum escrow balance of $318,606 is achieved, following the occurrence of an event of a default.
(6) Based on U/W NCF and calculated based on the annualized constant monthly payment commencing with the payment date in November 2013.
(7) Based on U/W NCF and calculated based on the annual interest-only payments.

Major Tenant Information
Tenant(1) Approximate
Square Feet		 % Total
Square Feet		 % Total Base
Revenues(2)		 Rent PSF(3) Rating(4) Lease
Expiration
Date
Tenant 1 Cisco(5) 108,858
20.5% 21.3% $ 23.29
A+/NR 3/31/16
Tenant 2 TASC(6) 49,300
9.3% 7.8% $ 18.73
BBB+/BBB+ 6/30/08
Tenant 3 GSA National Park Service 44,906
8.5% 10.0% $ 26.44
NR 9/30/09
Tenant 4 Focus Bio-Inova(7) 44,030
8.3% 9.2% $ 24.83
NR 10/31/08
Tenant 5 Honeywell(8) 31,561
5.9% 6.8% $ 25.50
A/A+ 9/30/11
Total 278,655
52.5% 55.1%  
   
(1) The five major tenants are ranked by approximate square feet.
(2) The percentages of total base revenues are based on underwritten base rental revenues.

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(3) Reflects in-place base rent.
(4) Credit rating is by S&P and Fitch, respectively, and may reflect the parent company rating (even though the parent company may have no obligations under the related lease) if the tenant company is not rated. NR means not rated.
(5) Termination option at 10/31/2010 and 10/31/2012.
(6) Tenant has two 5-year options to renew
(7) Tenant has two 5-year options to renew
(8) Tenant has one 5-year option to renew

Lease Expiration Information
Year Approximate
Expiring Square
Feet		 As % of Total
Square Feet		 Cumulative % of
Total Square
Feet		 Approximate
Expiring Base
Revenues(1)		 As % of Total
Base Revenues(1)		 Cumulative % of
Total Base
Revenues(1)
    2006(2) 15,648
2.9
%
 2.9% $ 406,339
3.4
%
 3.4%
2007 20,261
3.8
6.8% 445,742
3.8
7.2%
2008 93,330
17.6
24.3% 2,016,431
17.0
24.2%
2009 44,906
8.5
32.8% 1,187,427
10.0
34.1%
2010 71,259
13.4
46.2% 1,662,310
14.0
48.1%
2011 130,953
24.7
70.9% 3,440,516
29.0
77.1%
2012 0
0
70.9% 0
0
77.1%
2013 0
0
70.9% 0
0
77.1%
2014 8,496
1.6
72.5% 182,985
1.5
78.7%
2015 0
0
72.5% 0
0
78.7%
2016 and beyond 108,858
20.5
93.0% 2,535,449
21.3
100.0%
Vacant 37,297
7.0
100.0% 0
—
 
Total 531,008
100.0
%
   $ 11,877,199
100.0
%
  
(1) Based on underwritten base rental revenues excluding vacant lease-up assumptions.
(2) Includes any month-to-month leases.

The Borrower and Sponsor.    The Republic Portfolio Borrower is Republic Park, LLC, a Delaware limited liability company that is 100% owned by Republic Property Limited Partnership, a Delaware limited partnership (the ‘‘Operating Partnership’’) whose general partner is Republic Property Trust, a Maryland real estate investment trust (‘‘Republic’’). Borrower has two independent managers that are also springing members of Borrower. Republic was incorporated as a Maryland real estate investment trust on July 19, 2005 and is headquartered in Washington, D.C. Republic is the sole general partner and owner of approximately 87.5% of the economic interests in the Operating Partnership. As of September, 2006, Republic owns 10 commercial properties, consisting of 22 institutional-grade office buildings with an aggregate of approximately 2.2 million net rentable square feet. In addition, Republic holds an option to acquire three office properties under construction in the D.C. area, representing 1.1 million net rentable square feet upon completion. Republic trades on the New York Stock Exchange under the ticker symbol RPB. Republic’s senior management team has significant real estate industry experience including the development of two Class A office buildings in Washington, D.C. representing approximately 1.1 million net rentable square feet. The senior management team previously managed RKB Washington Property Fund I L.P., a commercial real estate investment fund.

The Mortgage Loan.    The Republic Portfolio Mortgage Loan was originated on September 29, 2006 and has a cut-off date balance of $100,000,000. The Republic Portfolio Mortgage Loan is a ten-year loan with a stated maturity date of October 1, 2016. The Republic Portfolio Mortgage Loan accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 6.090% per annum. On the eleventh day of each month through and including the payment date on October 11, 2013, the Republic Portfolio Borrower is required to make payments of interest only on the Republic Portfolio Mortgage Loan. On the eleventh day of each month from and including November 11, 2013, up to the stated maturity date, the Republic Portfolio Borrower is required to make a constant monthly payment of $605,349.01 (based on a 30-year amortization schedule). The remaining principal balance of the Republic Portfolio Mortgage Loan, plus all accrued and unpaid interest thereon, is due and payable on the stated maturity date.

The Republic Portfolio Borrower is prohibited from voluntarily prepaying the Republic Park Mortgage Loan in whole or in part prior to that certain date which is 120 days prior to the Maturity Date. From and after said date, the Republic Portfolio Borrower may prepay the Republic Portfolio Mortgage Loan, in whole only, without payment of any prepayment consideration.

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The Republic Portfolio Borrower may defease the Republic Portfolio Mortgage Loan, in whole only, on any monthly payment date following that certain date that is 2 years and 15 days after the Issue Date, and by doing so obtain the release of the Republic Portfolio Mortgaged Properties. A defeasance will be effected by the Republic Portfolio Borrower’s pledging substitute collateral that consists of either (i) direct, non-callable and non-redeemable securities evidencing an obligation to pay principal and interest in a full and timely manner that are direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) similar REMIC eligible collateral issued by any agency of the United States of America which is acceptable to the lender and the applicable rating agencies, which obligations or collateral must, in any event, be in compliance with Treasury Reg. Section 1.860G-2(a)(8), that produce payments which replicate the payment obligations of the Republic Portfolio Borrower under the Republic Portfolio Mortgage Loan and are sufficient to pay off the Republic Portfolio Mortgage Loan in its entirety on October 1, 2016. The Republic Portfolio Borrower’s right to defease the entire Republic Portfolio Mortgage Loan is subject to, among other things, upon the lender’s request the applicable rating agencies confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency.

The Mortgaged Property.    The Republic Portfolio Mortgage Loan is secured by a first priority mortgage lien on fee simple interest of the Republic Portfolio Borrower in the Republic Portfolio Mortgaged Properties. The Republic Portfolio Properties consist of eight Class A, low-rise office buildings located in Herndon, Virginia, approximately one mile east of Dulles International Airport and twenty-two miles west of the Washington D.C. central business district. Republic Portfolio is located on the south side of the Dulles Toll Road, an eight lane divided highway that provides access from Leesburg, Virginia to the west and Washington D.C. to the east. The area is a favorable option for many tenants because of the visibilty provided by the Dulles Toll Road as well as the proximity to Washington Dulles Airport. Built between 1998 and 2000, the properties consist of three multi-level buildings and five single-story buildings ranging in size from 29,338 to 181,154 square feet with a total of 531,008 square feet in all eight buildings. Each building has a large floor plan to serve single and multi-tenant users. Situated on 28.73 acres, the collateral also includes 1,870 surface parking spaces. Single-story office space in the suburban Virginia market is very attractive, as tenants are able to lease an entire building, giving them complete control over the space and security, an important feature for technology and government tenants. The properties are 93% leased with an average lease rate of $24.06 per square foot.

Terrorism Coverage.    The Republic Portfolio Borrower is required, in accordance with the Republic Portfolio Mortgage Loan documents, to maintain insurance against acts of terrorism, so long as (A) the lender determines that either (I) prudent owners of real estate comparable to the Republic Portfolio Mortgaged Property are maintaining same, or (II) prudent institutional lenders are requiring that such owners maintain such insurance; or (B) if such insurance is obtainable from any insurer or the United States of America or any agency or instrumentality thereof and the lack of such insurance in and of itself will result in a qualification, downgrade or withdrawal of the then current rating assigned, or to be assigned, or prevent ratings from being assigned, to any class of the series 2006-C7 certificates.

Partial Release.    The Republic Portfolio Borrower may obtain the release of a specified portion of the Republic Portfolio Mortgaged Properties consisting of excess, unimproved land which was not considered in the underwriting of the Republic Portfolio Mortgage Loan (‘‘Republic Portfolio Release Parcel’’) upon request and satisfaction of certain conditions which include: (a) If any existing parcel is being split into separate parcels: (i) Republic Portfolio Borrower must have provided satisfactory evidence that the Republic Portfolio Release Parcel has been separately subdivided or otherwise lawfully ‘‘split’’ from the remaining Republic Portfolio Mortgaged Properties, including, if applicable, evidence that a plat of the land upon which the Republic Portfolio Release Parcel is shown as a separate lot has been duly approved by all required governmental authorities and must have been duly filed, if necessary; and (ii) Republic Portfolio Borrower must have obtained and furnished a survey of the Republic Portfolio Release Parcel and the remaining Republic Portfolio Mortgaged Properties, which must, among other things provide evidence that (A) the remaining Republic Portfolio Mortgaged Properties abut a duly dedicated and physically open street and (B) water, gas, electric, telephone, storm sewer and sanitary sewer services are available to the remaining Republic Portfolio Mortgaged Properties; (b) the release of the Republic Portfolio Release Parcel would not violate (or cause any of the Republic Portfolio Mortgaged Properties to violate) any applicable zoning, subdivision or other applicable law; (c) Republic Portfolio Borrower must deliver an endorsement to the lender's title policy insuring the priority of this Republic Portfolio Mortgage as a first lien on the remaining Republic Portfolio Mortgaged Properties; (d) Republic Portfolio Borrower must grant, as an appurtenance to the remaining Republic Portfolio Mortgaged Properties, any easement rights over the Republic Portfolio Release Parcel for the benefit of the remaining Republic Portfolio Mortgaged Properties necessary for the maintenance, operation and improvement of the remaining Republic Portfolio Mortgaged Properties; and (e) Republic Portfolio Borrower must have provided evidence that the Republic Portfolio Release Parcel will be assessed as a separate tax parcel with respect to all property taxes and assessments.

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Parking Project Construction.    Surface parking and/or a parking garage (the ‘‘Parking Project’’) may be constructed on any unimproved portion of the Republic Portfolio Mortgaged Properties commonly referred to as 13461 Sunrise Valley Drive, Herndon, Virginia, provided certain conditions are satisfied including the following: (a) at least thirty (30) days prior to the commencement of construction of the Parking Project, Republic Portfolio Borrower must have delivered for approval: (A) a copy of all architectural plans, construction plans, drawings and site plans (collectively, the ‘‘Construction Plans’’); (B) a budget, based on the Construction Plans, for completion of the Parking Project (‘‘Budget’’); and (C) all proposed contracts or work orders with contractors, subcontractors, suppliers or other parties providing labor or materials in connection with the Parking Project (‘‘Construction Contracts’’); (b) prior to construction of the Parking Project, the Construction Plans, the Budget and the Construction Contracts (individually and collectively, the ‘‘Construction Documents’’) must have been approved by the lender; (c) prior to construction of the Parking Project, Republic Portfolio Borrower must have delivered evidence of Republic Portfolio Borrower’s financial ability to fund the construction of the Parking Project based on the Budget; (d) prior to construction of the Parking Project, all permits, variances, and approvals for the construction of the Parking Project must have been obtained; (e) prior to construction of the Parking Project, Republic Portfolio Borrower must have certified that the Parking Project and/or the construction thereof must not violate any lease demising any portion of the Republic Portfolio Mortgaged Properties; (f) prior to construction of the Parking Project, Republic Portfolio Borrower must have delivered evidence that all insurance required by the Republic Portfolio Loan Documents, any governmental authority and applicable law in connection with said construction has been obtained; (g) if construction of the Parking Project adversely affects any parking available to the Republic Portfolio Mortgaged Properties as of the date hereof, then, Republic Portfolio Borrower must have delivered evidence of alternative parking arrangements in compliance with all leases of the Republic Portfolio Mortgaged Properties and all applicable laws; (h) prior to construction of the Parking Project, if required under the operative documents with respect to any secondary market transaction, applicable rating agency confirmation that the construction of the Parking Project would not cause a downgrade, withdrawal or qualification of the ratings of any class of the series 2006-C7 certificates; (i) the Parking Project must be fully completed in a diligent and good and workmanlike manner in accordance with all applicable laws and ordinances (including zoning); (j) during the construction of the Parking Project, Republic Portfolio Borrower must provide, on a monthly basis, copies of all receipted bills, invoices, lien waivers and other such documents from each of the contractors and materialmen which provided work or services in connection with the Parking Project in excess of $10,000.00 (for each individual contractor or materialman) sufficient to reflect that all materials installed and work and labor performed in connection with the construction of the Parking Project have been paid for in full or will be paid with the next installment payment; (k) upon completion of the Parking Project, Republic Portfolio Borrower must certify that the Parking Project has been completed in all material respects in accordance with the Construction Plans; (l) upon completion of the Parking Project, Republic Portfolio Borrower must provide evidence that no mechanic’s or other liens have been placed against the Republic Portfolio Properties; (m) upon the lender’s request, an opinion of counsel must be delivered that upon completion of the Parking Project, the Republic Portfolio Mortgage Loan will remain a ‘‘qualified mortgage’’ under Section 860G(a)(3) of the Internal Revenue Code; and (n) Republic Portfolio Borrower must deliver a final as-built survey for the Republic Portfolio Mortgaged Properties within one month of the completion of the construction of the Parking Project.

Temporary Construction Easements.    Republic Portfolio Borrower may, without the consent of lender, grant temporary construction easements in the ordinary course of business in connection with any construction on the Republic Portfolio Release Parcel so long as said temporary construction easements do not (a) adversely affect the improvements located on the Republic Portfolio Mortgaged Properties; (b) adversely affect the use or operation of the Republic Portfolio Mortgaged Properties; (c) adversely affect access to the Republic Portfolio Mortgaged Properties; (d) cause the Republic Portfolio Mortgaged Properties to violate zoning laws or regulations or any other applicable law; (e) materially adversely affect the value of the Republic Portfolio Mortgaged Properties; or (f) materially adversely affect the net operating income of the Republic Portfolio Mortgaged Properties.

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VII. Government Property Advisors Portfolio Mortgage Loan

    


Mortgage Loan Information
Cut-off Date Balance: $96,476,000
Loan per Square Foot: $91
% of Initial Mortgage Pool Balance: 3.2%
Shadow Rating (S&P/Moody’s): NAP(1)
Loan Purpose: Refinance
Mortgage Interest Rate: 6.110%
Interest Calculation: Actual/360
First Payment Date: December 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: November 11, 2011
Maturity Balance: $96,476,000
Borrower: 38 limited liability companies, controlled indirectly by the sponsors
Sponsors: D. James Barton and Gregory S. Barton
Prepayment/Defeasance: Defeasance permitted beginning two years after Issue Date Prepayment without penalty permitted one month prior to maturity date.
Up-Front Reserves: Deferred Maintenance Reserve(2)
Ground Rent Reserve(3)
Ongoing Reserves: Replacement Reserve(4)
  TI/LC Reserve(5)
  Tax and Insurance Reserve(6)
Lockbox: Hard(7)
Other Secured Debt: Mezzanine Debt(8)

    


Mortgaged Property Information
Single Asset/Portfolio: Portfolio
Property Type: Office
Location (number of mortgaged properties): AL(1); AZ(3); CA(1); IL(1); MI(3); MO(1); MT(1); NJ(1); NM(1); OH(1); OK(1); PA(2); TX(19); VA(1); WI(1)
Year Built: 1955 to 2005
Year Renovated: NAP(1)
Square Feet: 1,061,763
Usuable Square Feet: 977,589
Occupancy: 99.5%
Occupancy Date: November 1, 2006
Ownership Interest: Fee (37); Leasehold (1)
Property Management: BGP Management, LLC
U/W NCF: $7,160,225
U/W NCF DSCR: 1.20x
Aggregate Appraised Value: $120,595,000
Appraisal As of Date: June – October 2006
Aggregate Cut-off Date LTV Ratio: 80.0%
Aggregate Maturity LTV Ratio: 80.0%
 
(1) NAP means not applicable.
(2) At origination, the Government Property Advisors Portfolio Borrower deposited $393,094 into a deferred maintenance reserve account for scheduled repairs at the Government Property Advisors Portfolio Mortgaged Properties to be made following the origination date.
(3) At origination, the Government Property Advisors Portfolio Borrower deposited $2,800 into a ground rent reserve account for ground rent payments due with respect to the 6451 Boeing Drive mortgaged property.
(4) The Government Property Advisors Portfolio Borrower is required to make monthly escrow deposits into a replacement reserve account in the amount of $17,696 for costs related to replacements and repairs at the Government Property Advisors Portfolio Properties.
(5) The Government Property Advisors Portfolio Borrower is required to make monthly escrow deposits into the TI/LC reserve account in the amount of $44,240 for costs related to tenant improvements and leasing commissions at the Government Property Advisors Portfolio Properties.
(6) The Government Property Advisors Portfolio Borrower is required to make monthly escrow deposits into a tax and insurance reserve account in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums payable during the next ensuing 12 months.
(7) See ‘‘—Lockbox’’ below.
(8) See ‘‘—Mezzanine Loan’’ below.

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Major Tenant Information
Tenant(1) # of
Properties		 Approximate
Square Feet		 % Total Square
Feet		 % Total
Base
Revenues(2)		 Rent PSF(3) Lease Expiration
Date
United States of America: General Services Administration 22 626,226
59.0% 64.4% $ 13.75
Various(4)
State of Texas 14 305,749
28.8% 22.1% $ 9.69
Various(5)
State of Michigan   1 77,674
7.3% 9.1% $ 15.65
2/28/2011(6)
State of Ohio   1 40,708
3.8% 4.4% $ 14.50
6/30/2007(7)
Vacant – 11,406
1.1% – –  
Total 38 1,061,763
100% 100% $ 12.74
 
(1) The four major tenants are ranked by approximate square feet.
(2) The percentages of total base revenues are based on underwritten base rental revenues, excluding vacant space lease-up assumptions.
(3) Reflects in-place underwritten base rent.
(4) The United States of America: General Services Administration leases space allocated to various federal agencies, including the Department of Agriculture Forest Service, the United States Postal Service, the Department of Homeland Security, the United States Customs Service, the Social Security Administration, the Bureau of Land Management, the Internal Revenue Service, the U.S. Drug Enforcement Agency, the Department of Veterans Affairs and the Public Buildings Service. Lease expirations at the 22 properties are as follows: one tenant totaling 55,090 square feet in 2009; two tenants totaling 27,529 square feet in 2010; five tenants totaling 159,026 square feet in 2011; four tenants totaling 227,903 square feet in 2012; one tenant totaling 8,432 square feet in 2013; and nine tenants totaling 148,246 square feet after 2013. These amounts do not reflect early termination options or appropriations termination provisions in the leases.
(5) The State of Texas leases space allocated to various state agencies, including the Department of Human Services, the Department of Family and Protective Services, the Health and Human Services Commission and the Texas Building and Procurement Commission. Lease expirations at the 14 properties are as follows: one tenant totaling 8,344 square feet in 2007; four tenants totaling 106,939 square feet in 2008; three tenants totaling 44,464 square feet in 2009; two tenants totaling 29,597 square feet in 2010, one tenant totaling 45,990 square feet in 2011, and three tenants totaling 70,415 square feet in 2012.
(6) The State of Michigan leases space allocated to the Department of Police.
(7) The State of Ohio leases space allocated to the Department of Administrative Services.

Lease Expiration Information
Year Approximate
Expiring Square
Feet		 As % of Total
Square Feet		 Cumulative % of
Total Square
Feet		 Approximate
Expiring Base
Revenues(2)		 As % of Total
Base Revenues(2)		 Cumulative % of
Total Base
Revenues(2)
2007 49,052
4.6% 4.6% $ 664,799
5.0% 5.0%
2008 106,939
10.1% 14.7% $ 980,228
7.3% 12.3%
2009 99,554
9.4% 24.1% $ 1,173,146
8.8% 21.1%
2010 57,126
5.4% 29.4% $ 847,245
6.3% 27.4%
2011 282,690
26.6% 56.1% $ 3,727,819
27.9% 55.3%
2012 298,318
28.1% 84.2% $ 2,200,280
16.5% 71.8%
2013 8,432
0.8% 85.0% $ 177,344
1.3% 73.1%
After 2013 148,246
14.0% 98.9% $ 3,606,236
26.9% 100.0%
Vacant 11,406
1.1% 100%  
   
Total 1,061,763
100.0%   $ 13,377,097
100.0%  
(1) Lease expiration is based on the actual lease expiration date. Various tenants have termination options resulting in potential lease expiration as follows: 245,354 square feet in 2007, 131,611 square feet in 2008, 99,554 square feet in 2009, 57,126 square feet in 2010, 108,000 square feet in 2011, 298,318 square feet in 2012, 35,311 square feet in 2013, and 75,083 square feet after 2013. Additionally, 13 leases, totaling 296,190 square feet and 22.6% of base rent, are subject to appropriations clauses that allow for termination based on reduced funding and may occur at any time provided written notice to landlord.
(2) Based on in-place underwritten base rental revenues.

The Borrower and Sponsor.    The Government Property Advisors Portfolio Borrower is 38 limited liability companies each of which is indirectly owned and controlled by D. James Barton and Gregory S. Barton. D. James Barton and Gregory S. Barton are principals of Genesis Financial Group (‘‘GFG’’), a real estate firm experienced in development, acquisition, asset management and property management in the federal and state government agency real estate market.

Mortgaged Properties.    The Government Property Advisors Portfolio Mortgaged Properties are comprised of 38 office properties totaling approximately 1,061,763 net rentable square feet (977,589 usable square feet) located in 15 states. The mortgaged properties are generally classified as single-tenant and are leased to various federal and state government agencies of the United States of America: General Services Administration, the State of Texas, the State of Michigan and the State

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of Ohio. Substantially all of the leases allow termination at anytime pursuant to an appropriations clause in the related lease and/or provide the respective tenant with early termination rights after a specified date. The weighted average occupancy of the 38 mortgaged properties, based on allocated loan amounts, is 99.5%. The following table summarizes certain information related to the Government Property Advisors Portfolio Mortgaged Properties.

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Property Name City State Size
(square feet)		 Tenant Allocated
Current
Loan
Balance
4500 1st Avenue South Birmingham AL 178,174
United States Postal Service $ 5,840,000
1728 Paseo San Luis Sierra Vista AZ 8,432
United States of America: General Services Administration (US Drug Enforcement Agency) 1,200,000
2555 East Gila Ridge Road Yuma AZ 32,041
United States of America: Bureau of Land Management 2,880,000
2334 East Highway 80 Douglas AZ 16,151
United States of America: General Services Administration (United States Customs Service) 4,600,000
2345 South 2nd Street El Centro CA 15,310
United States of America: General Services Administration (Social Security Administration and Internal Revenue Service) 2,344,000
230 North Mannheim Road Hillside IL 16,240
United States of America: General Services Administration (Social Security Administration) 2,720,000
4000 Collins Road Lansing MI 77,674
State of Michigan (Department of Police) 7,680,000
3400 Conner Street Detroit MI 14,000
United States of America: General Services Administration (Social Security Administration) 2,440,000
5210 Perry Robinson Circle Lansing MI 19,160
United States of America: General Services Administration (Social Security Administration) 3,360,000
4240 Lee's Summit Road Independence MO 13,330
United States of America: General Services Administration (Social Security Administration) 1,840,000
1101 15th Street North Great Falls MT 48,680
United States of America (Department of Agriculture Forest Service) 2,140,000
1350 Doughty Road Egg Harbor Township NJ 12,219
United States of America: General Services Administration (Public Buildings Service) 1,360,000
2909 West Second Street Roswell NM 39,444
United States of America: Department of Interior Bureau of Land Management 3,760,000
13430 Yarmouth Drive Pickerington OH 40,708
State of Ohio (Department of Administrative Services) 2,920,000
2400 East Jackson Hugo OK 6,610
United States of America: General Services Administration (Social Security Administration) 1,112,000
1781 McKees Rocks Road McKees Rocks PA 48,159
United States of America: General Services Administration (US Drug Enforcement Agency) 11,040,000
301 North Elmire Street Sayre PA 21,217
United States of America: General Services Administration (Department of Veterans Affairs) 2,160,000
3000 East Villa Maria Bryan TX 28,750
State of Texas (Health and Human Services Commission) 1,200,000
7400 Diana El Paso TX 21,472
State of Texas (Department of Human Services) 1,632,000
2505 Stone Hollow Brenham TX 10,368
State of Texas (Health and Human Services Commission and Department of Family and Protective Services 528,000
2400 Osborn Lane Bryan TX 13,914
State of Texas (Texas Building and Procurement Commission) 640,000
317 Casa Drive Copperas Cove TX 8,344
State of Texas (Health and Human Services Commission and Department of Family and Protective Services) 456,000
703 Church Street East Bernard TX 7,204
United States Postal Service 840,000
2520 South 1 Road Edinburg TX 46,690
State of Texas (Health and Human Services Commission) 2,824,000
7450 John White Boulevard Fort Worth TX 23,467
State of Texas (Texas Building and Procurement Commission) 1,360,000
1545 Hawkins Boulevard El Paso TX 55,090
United States of America: General Services Administration (Department of Homeland Security) 4,312,000
103 Park Hill Drive Hamilton TX 5,865
State of Texas (Health and Human Services Commission and Department of Family and Protective Services) 152,000
2110 Telephone Road Houston TX 26,800
State of Texas (Health and Human Services Commission) 1,608,000
11307 Roszell San Antonio TX 66,050
State of Texas (The Texas Department of Human Services) 4,624,000
6451 Boeing Drive El Paso TX 25,531
United States of America: General Services Administration (Department of Homeland Security) 5,200,000
2010 La Salle Waco TX 16,980
State of Texas (Health and Human Services Commission) 936,000
1460 Northwest 19th Street Paris TX 36,580
State of Texas (Health and Human Services Commission and Department of Family and Protective Services) 2,200,000
1735 Coffee Port Road Brownsville TX 14,512
United States of America: General Services Administration (Social Security Administration) 2,000,000
40090 Hempstead Road Waller TX 8,695
United States Postal Service 1,120,000
605 West 4th Street Cameron TX 8,125
State of Texas (Health and Human Services Commission and Department of Family and Protective Services) 280,000
1320 East Highway 84 Teague TX 3,750
State of Texas (Health and Human Services Commission) 104,000
17283 General Puller Highway Deltaville VA 4,415
United States Postal Service 504,000
6300 West Fond Du Lac Milwaukee WI 21,612
United States of America: General Services Administration (Social Security Administration) 4,560,000

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The Mortgage Loan.    The Government Property Advisors Portfolio Mortgage Loan was originated on November 10, 2006, and has a cut-off date principal balance of $96,476,000. The Government Property Advisors Portfolio Mortgage Loan is a five-year interest only balloon loan with a stated maturity date of November 11, 2011. The Government Property Advisors Portfolio Mortgage Loan accrues interest on an actual/360 basis at an interest rate, in the absence of default, of 6.11% per annum. On the eleventh day of each month, up to but not including the stated maturity date, Government Property Advisors Portfolio Borrower is required to make monthly debt service payments of interest only on the Government Property Advisors Portfolio Mortgage Loan. The principal balance of the Government Property Advisors Portfolio Mortgage Loan plus all accrued and unpaid interest thereon is due on the stated maturity date.

The Government Property Advisors Portfolio Borrower is prohibited from voluntarily prepaying the Government Property Advisors Portfolio Mortgage Loan, in whole or in part, prior to the monthly payment date immediately prior to the Maturity Date. The Government Property Advisors Portfolio Borrower may, at any time on or subsequent to the monthly payment date immediately prior to the maturity date, elect to prepay the Government Property Advisors Portfolio Mortgage Loan, in whole only (but not in part).

The Government Property Advisors Portfolio Borrower may defease the Government Property Advisors Portfolio Mortgage Loan in whole or in part at any time after the second anniversary of the Issue Date, and by doing so obtain the release of some or all of the Government Property Advisors Portfolio Mortgaged Properties. A defeasance will be effected by the Government Property Advisors Portfolio Borrower pledging substitute collateral that consists of securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, and (ii) not subject to prepayment, call or early redemption that produce payments which replicate the payment obligations of the Government Property Advisors Portfolio Borrower under the Government Property Advisors Portfolio Mortgage Loan and are sufficient to pay off the defeased portion of the Government Property Advisors Portfolio Mortgage Loan in its entirety on the stated maturity date. The Government Property Advisors Portfolio Borrower’s right to defease the Government Property Advisors Portfolio Mortgage Loan is subject to, among other things, S&P and Fitch each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings in effect prior to such defeasance. In the event that the Government Property Advisors Portfolio Borrower defeases less than all of the Government Property Advisors Portfolio Mortgage Loan, then the amount of such defeasance shall not be less than 125% of the allocated portion of the Government Property Advisors Portfolio Mortgage Loan related to the applicable Government Property Advisors Portfolio Mortgaged Property to be released.

Substitution Provisions.    The Government Property Advisors Portfolio Borrower may elect to substitute one or more individual properties and obtain the release of one or more individual properties from the lien of the Government Property Advisors Portfolio Mortgage Loan provided that certain conditions are satisfied including, without limitation, (i) that no event of default has occurred and is continuing, (ii) that certain debt service coverage ratio and loan-to-value conditions in the loan documents are satisfied in connection with the substitution, and (iii) under certain circumstances as set forth in the loan documents, receipt of a rating agency confirmation that the ratings will not be qualified, downgraded or withdrawn as a result of such substitution. In addition, such substitutions are further subject to the limitation that the allocated loan amount of the property to be released from the lien of the Government Property Advisors Portfolio Mortgage Loan, when aggregated with the allocated loan amount of all other individual properties which are or were released from the lien of the Government Property Advisors Portfolio Mortgage Loan do not constitute more than ten percent (10%) of the original outstanding principal balance of the Government Property Advisors Portfolio Mortgage Loan in any one (1) calendar year or thirty percent (30%) of the original outstanding principal balance of the Government Property Advisors Portfolio Mortgage Loan in the aggregate throughout the term of the Government Property Advisors Portfolio Mortgage Loan. The substitute property is required to be no less favorable than the replaced property when consideration is given to the following factors, taken as a whole (i) market or geographic area in which the substitute property is located, including vacancy, absorption rates and other customary factors relating to such area, (ii) the relative quality of construction and use of the improvements and (iii) the length and quality of the lease or leases at the substitute property. Tenants

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under such leases are required to be either federal or state governmental authorities or entities which have a long term unsecured debt rating of not less than ‘‘A’’ by S&P.

Lockbox.    The Government Property Advisors Portfolio Borrower has established a lockbox account with National City Bank into which the Government Property Advisors Portfolio Borrower and the manager of the Government Property Advisors Portfolio Mortgaged Property are required to cause all tenants of the Government Property Advisors Portfolio Mortgaged Property to deposit the rents under their applicable leases. The available funds in the lockbox account are swept daily to the Government Property Advisors Portfolio Borrower, unless a trigger event shall have occurred and be continuing, in which event, all available funds in the lockbox account will be applied to make required deposits to the tax and insurance escrow fund, to pay the monthly debt service payment on the Government Property Advisors Portfolio Mortgage Loan, to make required deposits to the rollover, replacement and required repair reserves and any other amounts due and payable by the Government Property Advisors Portfolio Borrower on the Government Property Advisors Portfolio Mortgage Loan and any funds remaining to be released to the Government Property Advisors Portfolio Borrower. A trigger event is a debt service coverage ratio of less than 1.10x or an event of default under the Government Property Advisors Portfolio Mortgage Loan.

Terrorism Insurance.    The Government Property Advisors Portfolio Borrower is required to obtain and maintain insurance on the Government Property Advisors Portfolio Mortgaged Property against acts of terrorism, provided such insurance is available at a cost not in excess of an annual premium equal to two times the cost of maintaining the insurance required by the loan documents during the prior calendar year. Insurance against acts of terrorism is defined as insurance that does not include exclusions for loss, cost, damage or liability caused by ‘‘terrorism’’ or ‘‘terrorist acts’’. Such insurance currently provides coverage for certified acts of terrorism, as defined in the Terrorism Risk Insurance Act of 2002 (‘‘TRIA’’), subject to applicable deductibles under TRIA.

Ground Lease.    One property of the Government Property Advisors Portfolio Mortgaged Properties is leased by the Government Property Advisors Portfolio Borrower pursuant to a ground lease which, by its terms, will expire in 2019. The lender has certain rights to cure defaults under the ground lease but is not entitled to a new lease if the applicable ground lease is terminated for any reason. In the event that the Government Property Advisors Portfolio Borrower is not able to obtain a new ground lease as set forth in the loan documents the Government Property Advisors Portfolio Borrower is required to deposit into a reserve account with lender an amount equal to the allocated loan amount applicable to the ground leased property or deposit all excess cash flow from the Government Property Advisors Portfolio Mortgaged Properties in a reserve account with the lender until the lender has accumulated therein an amount equal to the allocated loan amount applicable to the ground leased property, such amount to be applied to the Government Property Advisors Portfolio Mortgage Loan on the stated maturity date.

Mezzanine Loan.    A mezzanine loan in the aggregate maximum principal amount of $20,020,671 was made by GSA III INVESTMENTS, LLC, a Delaware limited liability company (the ‘‘Government Property Advisors Portfolio Mezzanine Lender’’), to Barton Government Portfolio, LLC, a Delaware limited liability company. The Government Property Advisors Portfolio Mezzanine Lender is an affiliate of Rubicon America Trust, an Australian property trust. The mezzanine loan accrues interest at a fixed rate per annum equal to 10%, compounded monthly, as to a portion of the mezzanine loan equal to $12,421,285 and a fixed rate per annum equal to 7%, compounded monthly, as to the balance of the mezzanine loan in the principal amount of $7,599,386. In addition, the mezzanine loan contains an obligation of the mezzanine borrower to pay to the Government Property Advisors Portfolio Mezzanine Lender, as additional interest fifty percent (50%) of the excess cash flow after payment of all operating expenses and debt service and other expenses on the Government Property Advisors Portfolio Mortgage Loan and the Government Property Advisors Portfolio Mezzanine Loan and after certain other deductions. The mezzanine loan matures on November 11, 2011. The mezzanine loan is secured by pledges of 100% of the direct and indirect equity interests in the Government Property Advisors Portfolio Borrower. The mezzanine loan may not be prepaid in whole or in part prior to October 11, 2011. The Government Property Advisors Portfolio Mezzanine Loan is subject to an intercreditor agreement between the mortgagee and the Government Property Advisors Portfolio Mezzanine Lender. The intercreditor agreement provides, among other things, that (a) the Government Property Advisors

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Portfolio Mezzanine Lender will have certain cure rights to cure defaults under the Government Property Advisors Portfolio Mortgage Loan, (b) the Government Property Advisors Portfolio Mezzanine Lender may not amend or modify the Government Property Advisors Portfolio Mortgage Loan in certain respects without the consent of the mortgagee, (c) the Government Property Advisors Portfolio Mezzanine Lender is not permitted to transfer more than 49% of its beneficial interest in the Government Property Advisors Portfolio Mezzanine Loan unless such transfer is to a transferee meeting certain requirements or unless a confirmation from each rating agency that such action will not result in a downgrade, qualification or withdrawal of any of the ratings assigned to the 2006-C7 certificates has been received, and (d) if the Government Property Advisors Portfolio Mortgage Loan is accelerated or becomes specially serviced mortgage loan or if the mortgagee exercise any right or remedy under the related loan documents with respect to the Government Property Advisors Portfolio Borrowers or the Government Property Advisors Portfolio Mortgaged Property, the Government Property Advisors Portfolio Mezzanine Lender has the right to purchase the mortgage loan, in whole but not in part, for a price generally equal to the outstanding principal balance thereof, together with all accrued interest thereon, and any advances made by the mortgagee or its servicer under the subject mortgage loan and any interest thereon.

Renovation Reserve.    In the case of the Roswell, New Mexico property included in the Government Property Advisors Portfolio, observations of the exterior and interior walls revealed apparent signs of cracking and movement that could indicate excessive settlement or an improperly installed foundation system. The engineering firm noted additional evidence of foundation movement, including cracking of drywall, and binding of doorways and recommended further investigation to determine the extent and causes of the observed foundation movement indicators. A deferred maintenance reserve was funded at origination, which included 125% of the currently estimated costs of renovations to address these matters. To the extent it is determined that additional funds will be necessary to complete such renovations, excess cash flow from the entire Government Property Advisors Portfolio will be reserved until 125% of the newly estimated cost of renovations is escrowed.

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VIII. The Arizona Retail Portfolio Mortgage Loan


Loan Information
Cut-off Date Principal Balance: $86,000,000
Loan per Square Foot: $143
% of Initial Mortgage Pool Balance: 2.8%
Shadow Rating (S&P/Moody's): NAP(1)
Loan Purpose: Refinance
Mortgage Interest Rate: 6.180% per annum
Interest Calculation: Actual/360
First Payment Date: December 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: November 11, 2016
Maturity Balance: $86,000,000
Borrowers: BPRE 51 Thunderbird, LLC, BPRE Casa Grande Center, LLC, BPRE Chandler Mercado, LLC, BPRE Elliot & McClintock, LLC, BPRE Fairway Center, LLC, BPRE Greenway Village, LLC, BPRE Glendale Square, LLC, BPRE Higley & Pecos, LLC, BPRE Longmore & Southern, LLC, BPRE McQueen Guadalupe North, LLC, BPRE Scottsdale Promenade, LLC, BPRE Sunflower Plaza, LLC, BPRE Tempe Scottsdale, LLC and BPRE Union Crossing, LLC
Sponsors: Alex Papakyriakou and Ron N. Barness
Defeasance/Prepayment: Defeasance in whole or in part permitted two years after Issue Date. Partial defeasance permitted in connection with release of certain individual properties. Prepayment without penalty permitted two months prior to maturity date.
Up-Front Reserves: Deferred Maintenance Reserve(2)
Ongoing Reserves: Tax and Insurance Reserve(3)
  Replacement Escrow Reserve(4)
  Rollover Escrow Reserve(5)
Lockbox: Hard(6)
Other Secured Debt: NAP(1)

Mortgaged Property Information
Single Asset/Portfolio: Portfolio
Property Type: Unanchored (12 properties),
Single Tenant (1 property),
Shadow Anchored (1 property)
Location: Various, Arizona
Year Built: 1964-2006
Year Renovated: NAP(1)
Square Feet: 600,178
Occupancy: 89.9%(7)
Ownership Interest: Fee
Property Management: RBI Management Services, L.L.C., an affiliate of the borrower
U/W NCF: $6,446,213(7)
U/W NCF DSCR: 1.20x(7)
Aggregate Appraised Value: $107,700,000
Appraisal As of Date: July-August 2006
Aggregate Cut-off Date LTV Ratio: 79.9%
Aggregate Maturity LTV Ratio: 79.9%
   
(1) NAP means not applicable.
(2) At closing, the Arizona Retail Portfolio Borrower deposited $268,520 into a reserve for deferred maintenance costs at the Arizona Retail Portfolio Properties.
(3) The Arizona Retail Portfolio Borrower is required to make monthly payments equal to one-twelfth of the annual amount into the tax and insurance reserve.
(4) The Arizona Retail Portfolio Borrower is required to make monthly deposits into a replacement reserve account in the amount of $8,056 for costs relating to replacements and repairs at the Arizona Retail Portfolio Properties.
(5) The Arizona Retail Portfolio Borrower is required to make monthly deposits into a rollover reserve account in the amount of $29,766 for costs relating to lease rollovers at the Arizona Retail Portfolio Properties.
(6) See ‘‘—Lockbox’’ below.
(7) Occupancy, U/W NCF and U/W NCDF DSCR were calculated including nine (9) recently executed leases totaling 28,875 square feet, with respect to which the tenants have not yet taken occupancy. The sponsors have guaranteed the amount of $4,680,456, which represents the loan proceeds allocable to the net cash flow differential between the current in-place net cash flow and the projected net cash flow including the recently executed leases. The guaranteed amount decreases as these tenants take occupancy and commence paying full unabated rent. The current Occupancy and U/W NCF DSCR, calculated without these leases are 84.3% and 1.13x, respectively.

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Arizona Retail Portfolio Tenant Information for Top Five Tenants (1)
Tenant Approximate
Square Feet		 % Total
Square Feet		 % Total Base
Revenues(1)(2)		 Lease
Expiration Date
Claim Jumper Restaurant L.L.C. 14,000
2.3% 4.8% 11/30/2022
Basha's Store #50 43,723
7.3% 3.7% 6/11/2007
Asiana Market 35,534
5.9% 3.4% 12/30/2010
Record Town USA,LLC
dba FYE Music and Movies		 9,400
1.6% 3.1% 1/31/2011
Cornerstone Productions, Inc.
(dba TGI Friday's)		 9,100
1.5% 3.1% 6/30/2010
Others (2) 409,868
68.3% 82.0%  
Vacant 78,553
13.1%             
Total 600,178
100% 100%  
(1) The percentages of total base rent are based on underwritten in-place base rental revenues, which includes 28,875 square feet of executed leases where the tenants thereunder have not yet taken occupancy.
(2) There are 167 tenants with 409,868 square feet accounting for 68.3% of the space and 82.0% of the base rent with lease expirations between August 31, 2006 and June 6, 2020.

Arizona Retail Portfolio Lease Expiration Schedule
Year Approximate
Expiring Square
Feet		 As % of
Total
Square Feet		 Cumulative
% of
Total
Square Feet		 Approximate
Expiring
Base
Revenues(1)		 As % of
Total Base
Revenues(1)		 Cumulative
% of
Total Base
Revenues(1)
2006 17,025
2.8% 2.8% $ 289,727
4.0% 4.0%
2007 110,902
18.5% 21.3% $ 1,176,122
16.1% 20.0%
2008 82,503
13.7% 35.1% $ 1,248,557
17.1% 37.1%
2009 111,436
18.6% 53.6% $ 1,571,455
21.5% 58.6%
2010 105,530
17.6% 71.2% $ 1,404,575
19.2% 77.8%
2011 41,483
6.9% 78.1% $ 859,423
11.8% 89.6%
2012 16,016
2.7% 80.8% $ 168,144
2.3% 91.9%
2013 0
0.0% 80.8% $ 0
0.0% 91.9%
2014 0
0.0% 80.8% $ 0
0.0% 91.9%
2015 and Beyond 36,370
6.1% 86.9% $ 593,219
8.1% 100.0%
Vacant 78,553
13.1% 100.0%  
            
Total 600,178
100%   $ 7,311,223
100%  
(1) Based on in-place underwritten base rental revenues.

The Borrower and Sponsor.    The Arizona Retail Portfolio Borrower collectively consists of BPRE 51 Thunderbird, LLC, BPRE Casa Grande Center, LLC, BPRE Chandler Mercado, LLC, BPRE Elliot & McClintock, LLC, BPRE Fairway Center, LLC, BPRE Greenway Village, LLC, BPRE Glendale Square, LLC, BPRE Higley & Pecos, LLC, BPRE Longmore & Southern, LLC, BPRE McQueen Guadalupe North, LLC, BPRE Scottsdale Promenade, LLC, BPRE Sunflower Plaza, LLC, BPRE Tempe Scottsdale, LLC and BPRE Union Crossing, LLC, each a Delaware limited liability company and each a single purpose bankruptcy-remote entity, and is sponsored and controlled by Alex Papakyriakou and Ron N. Barness.

The Mortgage Loan.    The Arizona Retail Portfolio Mortgage Loan was originated on October 17, 2006 and has a cut-off date principal balance of $86,000,000. The Arizona Retail Portfolio Mortgage Loan is a ten-year loan with a maturity date of November 11, 2016. The Arizona Retail Portfolio Mortgage Loan accrues interest on an actual/360 Basis in the absence of default at a fixed rate of 6.180% per annum. On the eleventh day of each month during the term of the Arizona Retail Portfolio Mortgage Loan, the Arizona Retail Portfolio Borrower is required to make payments of interest only calculated on the outstanding balance of the Arizona Retail Portfolio Mortgage Loan. The principal balance of the Arizona Retail Portfolio Mortgage Loan, plus all accrued and unpaid interest thereon, is due on the stated maturity date.

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The Arizona Retail Portfolio Borrower may defease the Arizona Retail Portfolio Mortgage Loan, in whole or in part, on any due date after the expiration of two years following the Issue Date (the ‘‘Arizona Retail Portfolio Defeasance Lockout Period’’). In connection with a defeasance of the entire loan, the Arizona Retail Portfolio Borrower will obtain the release of all the Arizona Retail Portfolio Mortgaged Properties. A defeasance in whole will be effected by the Arizona Retail Portfolio Borrower's pledging substitute collateral that consists of non-callable fixed rate United States Treasury obligations that produce payments which replicate the payment obligations of the Arizona Retail Portfolio Borrower under the Arizona Retail Portfolio Mortgage Loan and that are sufficient to pay off the Arizona Retail Portfolio Mortgage Loan in its entirety on the stated maturity date. The right of the Arizona Retail Portfolio Borrower to defease the Arizona Retail Portfolio Mortgage Loan in whole is subject to, among other things, S&P and Fitch each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency.

The Arizona Retail Portfolio Borrower may partially defease the Arizona Retail Portfolio Mortgage Loan and obtain the release of an individual Arizona Retail Portfolio Mortgaged Property (other than the Scottsdale Promenade Premises, the Union Crossing Premises, the Cooper Village Premises and the Chandler Mercado Premises) on any due date after the end of the Arizona Retail Portfolio Defeasance Lockout Period, provided that (i) the debt service coverage ratio for the Arizona Retail Portfolio Mortgaged Properties remaining after the release of an Arizona Retail Portfolio Mortgaged Property is not less than 1.45x; and (ii) the loan-to value ratio for the Arizona Retail Portfolio Mortgaged Properties remaining after the release of an individual Arizona Retail Portfolio Mortgaged Property does not exceed 80%. Such partial defeasance will be effected by the Arizona Retail Portfolio Borrower's defeasing an amount (an ‘‘Arizona Retail Portfolio Partial Defeasance Amount’’) equal to 125% of the allocated loan amount for such Arizona Retail Portfolio Mortgaged Property (the ‘‘Arizona Retail Portfolio Release Amount’’) and pledging substitute collateral that consists of non-callable United States Treasury obligations that produce payments which replicate the payment obligations of the Arizona Retail Portfolio Borrower with respect to the Arizona Retail Portfolio Partial Defeasance Amount and that are sufficient to pay off the Arizona Retail Portfolio Partial Defeasance Amount in its entirety on the stated maturity date. The right of the Arizona Retail Portfolio Borrower to defease the Arizona Retail Portfolio Mortgage Loan in part is also subject to, among other things, S&P and Fitch each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the rating then assigned to any class of series 2006-C7 certificates by such rating agency.

The Mortgaged Properties.    The Arizona Retail Portfolio Mortgage Loan is secured by a first priority mortgage lien on the fee simple interest in the Arizona Retail Portfolio Mortgaged Properties. The Arizona Retail Portfolio Mortgaged Properties are comprised of the Arizona Retail Portfolio Borrower's fee interest retail shopping centers located in Arizona (collectively, the ‘‘Arizona Retail Portfolio Shopping Centers’’). The Arizona Retail Portfolio Shopping Centers have an aggregate of 600,178 square feet of gross leasable area. As of October 17, 2006, based on allocated loan amount, the weighted average occupancy of the Arizona Retail Portfolio Shopping Centers, calculated including 28,875 square feet of recently executed leases with respect to which the tenants have not yet taken occupancy, was 89.9% and, calculated not including such leases, was 84.3%.

Lockbox.    The Arizona Retail Portfolio Borrower is required to cause the tenants to deposit all rents derived from each Arizona Retail Portfolio Mortgaged Property directly into a segregated lockbox account under the control of the related mortgagee; provided that prior to the occurrence of a sweep period under the Arizona Retail Portfolio Mortgage Loan, the funds on deposit in the lockbox account will be swept on each business day to an account controlled and maintained by the Arizona Retail Portfolio Borrower. Following the occurrence of a sweep period, funds on deposit in the lockbox account will no longer be swept to an account maintained and controlled by the Arizona Retail Portfolio Borrower, but will instead be swept on a daily basis to a cash collateral account under the sole control of the related mortgagee, until the event which caused the sweep period is cured or ceases to exist, as provided for in the loan documents. During the existence of a sweep period, funds in the cash collateral account will be applied as follows, at the related mortgagee's option: first, to the payment of the Arizona Retail Portfolio Borrower's real estate tax and insurance reserve obligation; second, to the payment of debt service; third, to the payment of the Arizona Retail Portfolio Borrower's monthly capital expenditure reserve obligation; fourth, to the payment of the Arizona Retail Portfolio Borrower's monthly tenant improvement and leasing commission reserve obligation; fifth, to the payment of the Arizona Retail Portfolio Borrower's monthly operating expenses; and sixth, to the payment of other amounts due in respect of the Arizona Retail Portfolio Mortgage Loan. A sweep period means the period of time from and after the earliest to occur of (i) the date on which the debt service coverage ratio is less than 1.05x as of the end of any two consecutive calendar quarters and continuing until the debt service coverage ratio is not less than 1.05x for 2 consecutive calendar quarters (provided that such reversing event may only occur once during the term), (ii) an

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event of default under the property management agreement, (iii) an event of default under the Arizona Retail Portfolio Loan, or (iv) for so long as the debt service coverage ratio guaranty as described below is in place, the aggregate net worth of the sponsors being below $50,000,000.

Terrorism Coverage.    The Arizona Retail Portfolio Borrower is required to maintain commercial property and business interruption insurance, which includes coverage against losses resulting from perils and acts of terrorism.

Additional Guarantees:

•  The sponsors provided a guarantee of up to $10,000,000 of the Arizona Retail Portfolio Loan amount until the Arizona Retail Portfolio Mortgaged Properties achieve a debt service coverage ratio of 1.40x.
•  The sponsors provided a guarantee of up to $4,680,456 until the Arizona Retail Portfolio Borrower delivers executed tenant estoppel certificates from certain tenants that have signed leases and are either not in occupancy and/or not paying full unabated rent for their demised premises stating that (x) the applicable tenant is in actual physical occupancy and commenced the payment of full unabated rent for the demised premises, (y) all free rent and reduced rent periods under the applicable lease have expired, and (z) neither tenant nor landlord is in default under the applicable lease. The guarantee will be reduced proportionately upon receipt of each such tenant estoppel certificate.
•  The sponsor provided a guarantee of all monetary obligations under three master leases representing approximately 85,000 square feet of the Arizona Retail Portfolio Mortgaged Properties.
•  Upon an event of default following an insured casualty, the sponsors provided a guaranty of the payment of the applicable allocated loan amounts together with the proportionate yield maintenance premium, if applicable, as and when due less any insurance proceeds received by lender as a result of an insured casualty at seven (7) of the subject properties. The affected properties are (i) Cooper Village Premises, (ii) Elliot/McClintock Premises, (iii) Higley & Pecos Premises, (iv) Union Crossings Premises, (v) Greenway Village Premises, (vi) Longmore & Southern Premises, and (vii) Scottsdale Promenade Premises.

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IX. The Midtown Plaza Mortgage Loan


Mortgage Loan Information
Cut-off Date Principal Balance: $65,000,000
Loan per Square Foot: $132
% of Initial Mortgage Pool Balance: 2.2%
Shadow Rating (S&P/Fitch): NAP(1)
Loan Purpose: Acquisition
Mortgage Interest Rate: 5.762% per annum
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: Interest Only
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: October 11, 2011
Maturity Balance: $65,000,000
Borrower: Midtown Plaza (Buildings), L.P. and 1372 Peachtree, L.P.
Sponsor: Tishman Speyer Real Estate Venture VI, L.P., and an affiliate of Lehman Brothers
Defeasance/Prepayment: Defeasance permitted two years after Issue Date.
Partial prepayment permitted at any time only with release of development parcel, and if prior to 12 months prior to maturity date, with penalty. Prepayment with penalty permitted twelve months prior to maturity date. Prepayment without penalty permitted six months prior to maturity date.
Up-Front Reserves: Unfunded Tenant Obligations Reserve(2)
Ongoing Reserves: Unfunded Tenant Obligations Reserve(2)
  Tax and Insurance Reserve(3) Replacement Reserve(4)
  Leasing Reserve(5)
Lockbox: Hard(6)
Other Secured Debt: $6,814,159 Unfunded Mezzanine Financing(7)

Mortgaged Property Information
Single Asset/Portfolio: Single Asset
Property Type: Class A Office
Location: Atlanta, Georgia
Year Built: 1984 and 1985
Year Renovated: NAP(1)
Square Feet: 494,012(8)
Occupancy: 88.6%
Occupancy Date: September 1, 2006
Ownership Interest: Fee
Property Management: Tishman Speyer Properties, L.P., an affiliate of the borrower
U/W NCF: $5,317,074(9)
U/W NCF DSCR: 1.40x(10)
Cut-off Date U/W NCF DSCR: 1.40x(10)
Appraised Value: $94,090,000(11)
Appraisal As of Date: October 5, 2006(12)
Cut-off Date LTV Ratio: 69.1%
Maturity LTV Ratio: 69.1%
 
(1) NAP means not applicable.
(2) At closing, the Midtown Plaza Borrower deposited $749,751 into an unfunded tenant obligations reserve account for tenant allowances, tenant improvements, and leasing commissions at the Midtown Plaza Mortgaged Property. In addition, $41,090 will be deposited monthly into this account.
(3) The Midtown Plaza Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Midtown Plaza Mortgaged Property. Notwithstanding the foregoing, so long as an approved blanket insurance policy covering the Midtown Plaza Mortgaged Property, the monthly insurance escrow payment will not be required.
(4) The Midtown Plaza Borrower is required to make monthly deposits into the replacement reserve account in the amount of $6,164 for costs related to replacements and repairs at the Midtown Plaza Mortgaged Property.
(5) The Midtown Plaza Borrower is required to deposit into the leasing reserve any lease termination payments in excess of $500,000 to be used for tenant improvements, leasing commissions and legal expenses related to leases at the Midtown Plaza Mortgaged Property.
(6) See ‘‘—Lockbox’’ below.
(7) Reflects the portion of a $35,000,000 unfunded mezzanine facility allocated to the Midtown Plaza Mortgaged Property. See ‘‘—Mezzanine Financing’’ below.
(8) In addition, the collateral includes a 0.69 acre development parcel that can be developed into approximately 300,000 square feet of office or residential space.
(9) Reflects in-place U/W NCF. Projected U/W NCF based on assumed mark to market adjustments applied to below market tenant leases and certain other lease-up assumptions is $5,670,267.
(10) Based on in place U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $5,670,267 (described in footnote (9) above) is 1.49x.
(11) Aggregate appraised value for the Midtown Plaza office buildings and the development parcel. The office buildings were appraised at a value of $89,750,000 and the developable land was appraised at a value of $4,340,000.
(12) The buildings were appraised as of October 5, 2006 and the development parcel was appraised as of August 1, 2006.

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Major Tenant Information
Tenant(1) Approximate
Square
Feet		 % Total
Square
Feet		 % Total Base
Revenues(2)		 Rent PSF(3) Ratings(4) Lease
Expiration
Date
Invesco Institutional 130,390
26.4
%
 34.8
%
 $ 26.23
BBB+/BBB+ 7/31/2008
Shapiro Fussell and Wedge     23,586
4.8
5.8
$ 23.79
NR 9/30/2007
Atlanta Capital Management Co., LLC 22,540
4.6
4.8
$ 20.50
BBB+/NR 12/31/2009
Collier’s Cauble & Company 18,121
3.7
4.4
$ 23.43
NR 12/31/2008
Nelson & Associates 16,324
3.3
3.1
$ 18.80
NR 1/13/2017
Total 210,961
42.7
%
52.9
%
  
   
(1) The five major tenants are ranked by approximate square feet.
(2) The percentages of total base revenues are based on in-place underwritten base rental revenues, excluding vacant lease–up assumptions.
(3) Reflects in-place base rent.
(4) Credit ratings are those by S&P and Fitch, respectively, and may reflect the parent company rating even though the parent company may have no obligations under the related lease if the tenant company is not rated. NR means not rated.

Lease Expiration Information
Year Approximate
Expiring
Square
Feet		 As % of Total
Square
Feet		 Cumulative %
of Total Square
Feet		 Approximate
Expiring Base
Revenues(1)		 As % of
Total Base
Revenues(1)		 Cumulative %
of Total Base
Revenues(1)
2006(2) 29,151
5.9
%
 5.9
%
 $ 448,010
4.6
%
 4.6
%
2007 61,590
12.5
18.4
%
 1,422,055
14.5
19.0
%
2008 171,235
34.7
53.0
%
 4,414,864
44.9
63.9
%
2009 33,025
6.7
59.7
%
 693,774
7.1
70.9
%
2010 33,432
6.8
66.5
%
 757,142
7.7
78.6
%
2011 33,177
6.7
73.2
%
 679,911
6.9
85.5
%
2012 11,253
2.3
75.5
%
 219,434
2.2
87.8
%
2013 7,061
1.4
76.9
%
 136,778
1.4
89.2
%
2014 6,919
1.4
78.3
%
 124,542
1.3
90.4
%
2015 3,588
0.7
79.0
%
 27,986
0.3
90.7
%
2016 and beyond 47,120
9.5
88.6
%
 914,103
9.3
100.0
%
Vacant 56,461
11.4
100.0
%
 0
-
 
Total 494,012
100.0
%
  
$ 9,838,599
100.0
%
  
(1) Based on in-place underwritten base rental revenues.
(2) Includes any month-to-month tenants.

The Borrowers and Sponsor.    The Midtown Plaza Borrowers are Midtown Plaza (Buildings) L.P., a Delaware limited liability company and 1372 Peachtree L.P., a Delaware limited liabilty company. The sponsor of the Midtown Plaza Borrowers is Tishman Speyer Real Estate Venture VI, L.P. Founded in 1978 by Robert Tishman, Tishman Speyer operates from its headquarters in Manhattan and from 17 other offices worldwide including offices in Frankfurt, Berlin, London, Paris, Madrid, Bangalore, São Paulo and Sydney, as well as eight other offices in the United States. Since its formation, Tishman Speyer has developed or acquired a portfolio of over 77 million square feet of constructed area valued at over $24 billion. In addition to well-known developments of high rise office buildings in major urban locations, Tishman Speyer also creates mixed use, retail, residential and entertainment centers, as well as mid and low rise office buildings. An affiliate of the mortgage loan seller is an indirect equity holder in the Midtown Plaza Borrower.

The Mortgage Loan.    The Midtown Plaza Mortgage Loan was originated on October 3, 2006 and has a cut-off date principal balance of $65,000,000. The Midtown Plaza Mortgage Loan is a five-year loan with a stated maturity date of October 11, 2011. The Midtown Plaza Mortgage Loan accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 5.762% per annum. On the eleventh day of each month to but not including the stated maturity date, the Midtown Plaza Borrower is required to make interest-only payments on the Midtown Plaza Mortgage Loan. The principal balance of the Midtown Plaza Mortgage Loan, plus all accrued and unpaid interest thereon, is due and payable on the stated maturity date.

Except as set forth below under ‘‘—Development Parcel Release’’ with respect to the Midtown Plaza Mortgage Loan, the Midtown Plaza Borrower is prohibited from voluntarily prepaying the Midtown Plaza Mortgage Loan, in whole or in part, prior to October 11, 2010. From and after October 11, 2010, the Midtown Plaza Borrower may prepay the Midtown Plaza Mortgage Loan, in whole only, provided that (x) the Mezzanine Facility Loan (as defined below) in an amount equal to a

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release price allocated to the Midtown Plaza Mortgaged Property under the Mezzanine Facility Loan documents is simultaneously prepaid and, (y) for a prepayment of the Midtown Plaza Mortgage Loan made prior to April 11, 2011, the prepayment is accompanied by payment of a yield maintenance premium. From and after April 11, 2011, the Midtown Plaza Borrower may prepay the Midtown Plaza Mortgage Loan in whole only without payment of any yield maintenance premium.

The Midtown Plaza Borrower may defease the Midtown Plaza Mortgage Loan, in whole only, on any monthly payment date following the earlier of (i) the second anniversary of the Issue Date or (ii) the third anniversary of the origination of the Midtown Plaza Mortgage Loan, and by doing so obtain the release of the Midtown Plaza Mortgaged Property. A defeasance will be effected by the Midtown Plaza Borrower's pledging substitute collateral that consists of direct, non-callable, fixed rate obligations that are ‘‘government securities’’ within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, that produce payments which replicate the payment obligations of the Midtown Plaza Borrower under the Midtown Plaza Mortgage Loan and are sufficient to pay off the Midtown Plaza Mortgage Loan in its entirety on April 11, 2011. The Midtown Plaza Borrower's right to defease the entire Midtown Plaza Mortgage Loan is subject to, among other things, (i) the applicable rating agencies each confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency and (ii) the prepayment of the Mezzanine Facility Loan in an amount equal to a release price allocated to the Midtown Plaza Mortgaged Property under the Mezzanine Facility Loan documents.

The Mortgaged Property.    The Midtown Plaza Mortgage Loan is secured by a first priority mortgage lien on the fee simple interest of the Midtown Plaza Borrower in the Midtown Plaza Mortgaged Property, a class A office complex located on Peachtree and West Peachtree Streets in the Midtown office submarket of Atlanta, Georigia. The Midtown Plaza Mortgaged Property is a two building project with an aggregate of 494,012 square feet of net rentable area consisting of a 12-story office building with 225,649 square feet and a 20-story office building with 268,363 square feet. The office buildings are connected by a seven-story parking deck with approximately 1,019 parking spaces. The Midtown Plaza Mortgaged Property also includes a 0.69 acre development site that can accomodate up to 300,000 square feet of office or residential space. The development parcel is currently improved with a vacant 3-story 39,000 square foot office building developed in 1960. The Midtown Plaza Mortgaged Property is leased by multiple tenants. The major tenants at the property are Invesco Institutional, (which is rated BBB+/BBB+ by S&P and Fitch, respectively), with 130,390 square feet (26.4% of the total space) through July 2008, Shapiro Fussell and Wedge, a law firm, leasing 23,586 square feet (4.8% of the total space) through September 2007, and Atlanta Capital Management Co., LLC (which is rated BBB+/NR by S&P and Fitch, respectively), with 22,540 square feet (4.6% of the total space) through December 2009. As of September 1, 2006 occupancy at the Midtown Plaza Mortgaged Property, based on square footage leased, was 88.6%.

Lockbox.    The Midtown Plaza Borrower is required to directly deposit, or cause to be deposited, all rents and other income from the Midtown Plaza Mortgaged Property into a segregated lockbox account controlled by, and pledged to, the lender. All funds on deposit in such lockbox account are required to be allocated on each business day as follows: (a) to the tax account in the amount of the monthly deposit for taxes; (b) to the insurance premium account in the amount of the monthly deposit for insurance premiums if any are required; (c) to the debt service account in the amount of monthly payment of the debt service; (d) to the replacement reserve account in the amount of the monthly replacement reserve deposit; (e) to the unfunded tenant obligations reserve account in the amount of the monthly unfunded tenant obligations reserve deposit; (f) to the lockbox bank in the amount of any outstanding fees and expenses of such bank; (g) to the debt service account in the amount of funds sufficient to pay any interest accruing at the default rate and late payment charges; (h) provided no event of default exists, to the holder of the Mezzanine Facility Loan in an amount equal to the monthly debt service due under the Mezzanine Facility Loan; (i) provided no event of default exists, upon the occurrence of an event of default under the Mezzanine Facility Loan or the failure of a debt service coverage ratio test under the Mezzanine Facility Loan, to the operating expense account in an amount equal to budgeted monthly operating expenses and any extraordinary operating expenses approved by lender for disbursement to the Midtown Plaza Borrower; and (j) provided no event of default exists, all sums on deposit in the lockbox account after the foregoing deposits under clauses (a) through (i) above will be disbursed (A), to the holder of the Mezzanine Facility Loan if the lender has received notice that an event of default exists under the Mezzanine Facility Loan or (B) to the Midtown Plaza Borrower if the lender has not received notice that an event of default exists under the Mezzanine Facility Loan.

Terrorism Coverage.    The Borrower is required to maintain insurance against terrorism, terrorist acts or similar acts of sabotage, but excluding acts of war with coverage amounts of not less than an amount equal to the full insurable value of the Midtown Plaza Mortgaged Property (the ‘‘Terrorism Insurance Required Amount’’) and the business interruption/rent loss insurance required under the loan documents may not contain an exclusion from coverage under such policy for loss incurred as a result of an act of terrorism (but may contain an exclusion for acts of war). Notwithstanding the foregoing sentence, the

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Midtown Plaza Borrower is not be obligated to expend more than (i) $50,000 if the Midtown Plaza Mortgaged Property is controlled by certain individuals affiliated with Tishman Speyer and the Midtown Plaza Borrower maintains the insurance for the Midtown Plaza Mortgaged Property under a blanket policy maintained by the property manager or an entity controlled by one or more designated individuals affiliated with Tishman Speyer or (ii) $100,000 if either (A) the Midtown Plaza Mortgaged Property is not controlled by certain individuals affiliated with Tishman Speyer or (B) the insurance for the Midtown Plaza Mortgaged Property is maintained under a stand alone policy, in any fiscal year on insurance premiums for terrorism insurance, as adjusted to reflect any increase during the preceding year in the consumer price index (the ‘‘Terrorism Insurance Cap’’) and if the cost of the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap, the Midtown Plaza Borrower shall purchase the maximum amount of terrorism insurance obtainable for a premium equal in amount to the Terrorism Insurance Cap.

Mezzanine Financing.    The ‘‘Mezzanine Facility Loan’’ in the maximum principal amount of $35,000,000 was made by the related mortgage loan seller, individually and as the agent for one or more other lenders to certain direct and indirect owners of the Midtown Plaza Borrower together with certain direct and indirect owners of affiliates of the Midtown Plaza Borrower, on a joint and several basis (collectively, the ‘‘Mezzanine Facility Borrower’’. The Mezzanine Facility Loan accrues interest at a floating rate per annum and matures on October 6, 2011. The Mezzanine Facility Loan is secured by pledges of 100% of the equity interests in eight Delaware limited partnerships and eight Delaware limited liability companies. Such pledges include two Delaware limited partnerships and two Delaware limited liability companies which own, indirectly, 100% of the equity interests in the Midtown Plaza Borrower. The balance of the equity interests securing the Mezzanine Facility Loan relate to the owners of 4 other properties owned by affiliates of the Midtown Plaza Borrower (one of which is the Colony Square Mortgaged Property). A default by any Mezzanine Facility Borrower will constitute a default under the Mezzanine Facility Loan and a default by the owner of such other properties owned by affiliates of the Midtown Plaza Borrower under any mortgage loan encumbering such other properties owned by affiliates of the Midtown Plaza Borrower will constitute a default under the Mezzanine Facility Loan.

The Mezzanine Facility Borrower did not receive any proceeds of the Mezzanine Facility Loan at origination, but is entitled to received future facility advances to be used to pay for (i) debt service shortfalls on the Mezzanine Facility Loan, (ii) required repairs, replacements, tenant improvements, tenant allowances, leasing commissions, or legal expenses at the Midtown Plaza Mortgaged Property or certain other properties owned by affiliates of the Midtown Plaza Borrower, (iii) budgeted capital expenditures or other discretionary capital expenditures for the Midtown Plaza Mortgaged Property or certain other properties owned by affiliates of the Borrower, (iv) debt service shortfalls on the Midtown Plaza Mortgage Loan or certain other mortgage loans made by the lender to certain affiliates of the Midtown Plaza Borrower, or (v) with respect to the Midtown Plaza Mortgaged Property and certain other properties owned by affiliates of the Midtown Plaza Borrower, certain costs and expenses of architects, engineers, surveyors and attorneys in connection with the subdivision of a Development Parcel (defined below) (or certain development parcels at certain other properties owned by affiliates of the Borrower), the preparation of surveys, plans and specifications, architectural drawings, site plans, and in obtaining building permits, and variances, together with the cost of such permits and variances and other similar costs.

The Mezzanine Facility Loan may be prepaid in whole or in part at any time by the Mezzanine Facility Borrower. Provided the original Mezzanine Facility Loan has been repaid in full and terminated, the Mezzanine Facility Borrower will be permitted to incur and have outstanding at any given time a single indebtedness not to exceed an aggregate principal amount equal to $35,000,000 extended by a lender (meeting certain qualifications set forth in the Midtown Plaza Mortgage Loan agreement) and secured by first lien pledges of indirect ownership interests in the Midtown Plaza Borrower and certain affiliates of the Midtown Plaza Borrower that own various other properties, provided certain conditions described in the Midtown Plaza Mortgage Loan agreement are satisfied including, but not limited to, the delivery of an intercreditor agreement reasonably satisfactory to the lender and loan-to-value ratio not to exceed 80%.

Mezzanine Intercreditor Agreement.    The mortgage lender has entered into an intercreditor agreement (the ‘‘Intercreditor Agreement’’) with the lender under the Mezzanine Facility Loan (the ‘‘Mezzanine Facility Lender’’), that sets forth the relative priorities between the Midtown Plaza Mortgage Loan and the Mezzanine Facility Loan. The Intercreditor Agreement provides that, among other things:

•  The Mezzanine Facility Loan is generally subordinate to the Midtown Plaza Mortgage Loan in right of payment; provided, however, that so long as no event of default has occurred and is continuing with respect to the Midtown Plaza Mortgage Loan, subject to the terms of the Intercreditor Agreement, the Mezzanine Facility Lender may accept payments due and payable from time to time under the loan documents evidencing or securing the Mezzanine Facility Loan and prepayments of the Mezzanine Facility Loan made in accordance with loan documents evidencing or securing it’s the Mezzanine Facility Loan.

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•  Pursuant to the terms of the Intercreditor Agreement the Mezzanine Facility Lender may not exercise any rights it may have under the Mezzanine Facility loan documents with respect to a foreclosure or other realization upon the collateral for the Mezzanine Facility Loan without obtaining confirmation from the applicable rating agencies that such realization will not result in a downgrade, qualification or withdrawal of the applicable rating or ratings ascribed by such applicable rating agency to any of the series 2006-C7 certificates then outstanding unless (i) the transferee of title to such collateral meets certain standards set forth in the Intercreditor Agreement, (ii) the Midtown Plaza Mortgaged Property is managed by a manager meeting certain standards set forth in the Intercreditor Agreement and (iii) a cash management system meeting the requirements of the Intercreditor Agreement is in place.
•  Upon an ‘‘event of default’’ under the Mezzanine Facility Loan, the Mezzanine Facility Lender will have the right, subject to the terms of the Intercreditor Agreement, to select a replacement manager for the Midtown Plaza Mortgaged Property.
•  The Mezzanine Facility Lender has the right to receive notice of any event of default under the Midtown Plaza Mortgage Loan and the right to cure any monetary default within a period ending 5 business days after the later of receipt of such notice or the expiration of the Borrower’s cure periods under the Midtown Plaza Mortgage Loan documents; provided that the Mezzanine Facility Lender will not have the right to cure with respect to monthly scheduled debt service payments for a period of more than four consecutive months unless the Mezzanine Facility Lender has commenced and is continuing to diligently pursue its rights against the collateral for the Mezzanine Facility Loan. In addition, if the default is of a non-monetary nature, the Mezzanine Facility Lender will have the same amount of time as Borrower’s cure period to cure such non-monetary default plus 10 business days; provided, that, if such non-monetary default is susceptible of cure but cannot reasonably be cured within that period (or is not susceptible of cure without foreclosure on the collateral for the Mezzanine Facility Loan) then, subject to certain conditions, the Mezzanine Facility Lender will be given an additional period of time as is reasonably necessary in the exercise of due diligence to cure such non-monetary default or to pursue such foreclosure.
•  If the Midtown Plaza Mortgage Loan has been accelerated, or any proceeding to foreclose or otherwise enforce the mortgage or other security for the Midtown Plaza Mortgage Loan has been commenced, or if the Midtown Plaza Mortgage Loan is a ‘‘specially serviced’’ loan, then, subject to the terms of the Intercreditor Agreement, the Mezzanine Facility Lender will have the right to purchase the Midtown Plaza Mortgage Loan in whole for a price equal to the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon (including, without limitation, any late charges, default interest, exit fees, advances and post-petition interest), any protective advances made by the mortgagee and any interest on any advances.
•  The loan documents evidencing and securing the Mezzanine Facility Loan generally may be modified without the mortgage lender’s consent, except that certain provisions may not be modified without the Midtown Plaza Mortgage Loan lender’s consent, including, without limitation, a material increase in any monetary obligations of the Mezzanine Facility Borrower. Notwithstanding the foregoing, upon the occurrence of an event of default under the loan documents evidencing or securing the Mezzanine Facility Loan, the Mezzanine Facility Lender will be permitted, subject to the satisfaction of certain conditions, to amend or modify the Mezzanine Facility Loan in connection with a work-out or other surrender, compromise, release, renewal or modification of the Mezzanine Facility Loan.

Development Parcel Release.    The Midtown Plaza Borrower has the right at any time to obtain the release of a specified portion of the Midtown Plaza Mortgaged Property (the ‘‘Development Parcel’’) from the lien of the mortgage upon the satisfaction of certain conditions set forth in the loan agreement, including:

(i)     No event of default has occurred and is continuing;

(ii)    On or prior to the release, payment of the release price of $3,150,000 allocated to the Development Parcel in the loan agreement, together with (A) all accrued and unpaid interest on the amount of principal being prepaid through and including the date of prepayment and, if such prepayment occurs on a date which is not a payment date, all interest which would have accrued on the amount of principal being prepaid after the date of such prepayment to the next payment date, less the amount of investment income that would be earned from investing the amount of the principal prepayment in permitted investments specified by Midtown Plaza Borrower from the date of such prepayment to the next succeeding payment date and (B) if such prepayment is made prior to April 11, 2011, a yield maintenance premium; and

(iii)    The Mezzanine Borrower simultaneously prepays the Mezzanine Facility Loan, in an amount equal to the release price for the Development Parcel as set forth in the Mezzanine Facility Loan documents.

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X. The Martin Resorts Mortgage Loan

    


Mortgage Loan Information
Cut-off Date Principal Balance: $50,000,000
Loan per Room: $133,333
% of Initial Mortgage Pool Balance: 1.7%
Shadow Rating (S&P/Moody's): NAP(1)
Loan Purpose: Refinance
Mortgage Interest Rate: 5.965% per annum
Interest Calculation: Actual/360
First Payment Date: November 11, 2006
Amortization Term: 30 years(2)
Anticipated Repayment Date: NAP(1)
Hyperamortization: NAP(1)
Maturity Date: October 11, 2016
Maturity Balance: $45,410,908
Borrower: Martin Hotel Management Company LLC
Sponsors: Noreen Martin, Laura Martin Sherlock and Julie Martin Westfall
Prepayment/Defeasance: Defeasance permitted two years after Issue Date. Prepayment without penalty permitted three months prior to scheduled maturity date. From and after April 11, 2007, the borrower may obtain a release of any 1 of the 5 Martin Resorts Properties by satisfying certain criteria and paying an adjusted release amount and yield maintenance.
Up-Front Reserves: Paso Robles Reserve(3)
  Collateral Escrow Fund(4)
Ongoing Reserves: Tax and Insurance Reserve(5)
  Replacement Reserve(6)
Lockbox: Hard/Hotel(7)

Mortgaged Property Information
Single Asset/Portfolio: Portfolio
Property Type: Hotel
Location: Various, California
Year Built: 1941-2005
Year Renovated: 2001-2005
Number of Rooms: 375
Weighted Average Occupancy: 71.4%(8)
Occupancy Date: July 31, 2006(8)
Ownership Interest: Fee
Property Management: Martin Resorts, Inc.
Weighted Average ADR: $163.10(9)
Weighted Average RevPAR: $114.60(10)
U/W NCF: $5,627,958(11)
U/W NCF DSCR: 1.57x
Aggregate Appraised Value: $81,700,000(12)
Appraisal As of Date: August 2006
Aggregate Cut-off Date LTV Ratio: 61.2%
Aggregate Maturity LTV Ratio: 55.6%
   
(1) NAP means not applicable.
(2) Payments of interest only are required through and including the payment date in February 2010.
(3) Upon closing, the Martin Resorts Borrower deposited $950,000 into a reserve, which may be replaced by a letter of credit, to be used to pay for any capital improvements required to be performed at the Paso Robles Property and not covered by the replacement escrow fund.
(4) Upon closing, the Martin Resorts Borrower deposited $300,000 into a collateral reserve to be held as additional security for the repayment of the debt.
(5) The Martin Resorts Borrower is required on each monthly payment date to make deposits equal to one-twelfth of the annual amount required into the tax and insurance reserve account.
(6) The Martin Resorts Borrower is required on each monthly payment date to make deposits equal to $41,667 into a replacement reserve, which deposits are capped at $1,000,000.
(7) See ‘‘—Lockbox’’ below.
(8) Weighted Average Occupancy is the average occupancy, weighted based on the allocated loan amounts, of each of the Martin Resorts Mortgaged Properties for the trailing 12 months through July 31, 2006 or, with respect to the Avila Lighthouse Suites property, occupancy is based on the appraiser's analysis of market occupancy, which is higher than the occupancy for the trailing 12 months through July 31, 2006, as the Avila Lighthouse Suites property opened for business in December 2005 or, with respect to the Shore Cliff Lodge property, occupancy is based on an underwritten occupancy of 84.0%, which is below the occupancy based on the trailing 12 months ending July 31, 2006.
(9) Weighted Average ADR is the average daily rate, weighted based on the allocated loan amounts, of each of the Martin Resorts Mortgaged Properties for the 12 months ending June 30, 2006, or, with respect to the Avila Lighthouse Suites property, is based on the competitive set average ADR, as determined by the appraiser, as the Avila Lighthouse Suites mortgaged property, opened for business in December 2005.
(10) Weighted Average RevPAR is the average revenue per available room weighted based on the allocated loan amounts of each of the Martin Resorts Mortgaged Properties for the 12 months ending June 30, 2006, subject to certain occupancy and ADR adjustments as indicated above, and weighted based on allocated loan amount per property.
(11) U/W Net Cash Flow reflects underwritten net cash flow of the Martin Resorts Mortgaged Properties. The U/W Net Cash Flow of the Martin Resorts Mortgaged Properties of $5,627,958 is based on occupancy for the trailing 12 months ended July 31, 2006 and ADR for the trailing 12 months ended June 30, 2006. Except, however, in the case of the Avila Lighthouse Suites mortgaged property, the U/W Net Cash Flow is based on the appraiser's analysis of market occupancy, which is higher than the trailing 12 month occupancy and ADR based on the competitive set, as determined by the appraiser, as the mortgaged property opened for business in December 2005 and, in the case of the Shore Cliff Lodge property, the U/W Net Cash Flow is based on an underwritten occupancy of 84.0%, which is below the occupancy based on the trailing 12 months ending June 30, 2006.
(12) Aggregate of appraised values for the Martin Resorts Mortgaged Properties.

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The Borrower and Sponsor.    Martin Hotel Management Company LLC, a Delaware limited liability company (the ‘‘Martin Resorts Borrower’’), is a single purpose, bankruptcy-remote entity that owns no assets other that the Martin Resorts Mortgaged Properties and related interests and is sponsored by Noreen Martin, Laura Martin Sherlock and Julie Martin Westfall, collectively, the ‘‘Martin Resorts Sponsor’’).

The Mortgage Loan.    The Martin Resorts Mortgage Loan was originated on October 11, 2006, and has a cut-off date principal balance of $50,000,000. The Martin Resorts Mortgage Loan is a ten-year balloon loan with a stated maturity date of October 11, 2016. The Martin Hotel Mortgage Loan accrues interest on an Actual/360 Basis at an interest rate, in the absence of default, of 5.956% per annum. On the eleventh day of each month, payments of interest only are required through and including the payment date occurring in February, 2010. On the eleventh day of each month beginning in March 2010, through but not including the stated maturity date, the Martin Resorts Borrower is required to make constant monthly debt service payment of $298,362.31 (calculated based on a 30-year amortization schedule). The remaining principal balance of the Martin Resorts Mortgage Loan, plus all accrued and unpaid interest thereon, will be due on the stated maturity date.

The Martin Resorts Borrower is prohibited from voluntarily prepaying the Martin Resorts Mortgage Loan in whole or in part prior to August 11, 2016. The Martin Resorts Borrower may defease the Martin Resorts Mortgage Loan, in whole, on any payment date following the second anniversary of the Issue Date. A defeasance of the loan will be effected by the Martin Resorts Borrower's pledging substitute collateral that consists of direct, non-callable United States Treasury obligations that produce payments which replicate the payment obligations of the Martin Resorts Borrower under the Martin Resorts Mortgage Loan and are sufficient to pay, the Martin Resorts Mortgage Loan in its entirety on the stated maturity date. The Martin Resorts Borrower's right to defease the Martin Resorts Mortgage Loan is subject to, among other things, S&P and Fitch confirming that the defeasance would not result in a qualification, downgrade or withdrawal of the ratings then assigned to any class of series 2006-C7 certificates by such rating agency.

Partial Release.    From and after the date that is six (6) months following the origination of the Martin Resorts Mortgage Loan and anytime before one year from the maturity date, the Martin Resorts Borrower may release any one (1) but not more than one (1) of the Martin Hotel Mortgage Loan Properties, provided that, among other things; (i) all accrued and unpaid interest and all other sums due under the Martin Resorts Mortgage Loan have been paid in full on or prior to the partial release date; (ii) the debt service coverage ratio for the Martin Resorts Properties after giving effect to such release is at least equal to the greater of (x) the debt service coverage ratio for the Martin Resorts Properties immediately preceding the release of the individual property and (y) the debt service coverage ratio for the Martin Resorts Properties as of the origination date; (iii) the loan-to-value ratio for the Martin Resorts Properties after giving effect to such release as determined by lender in its sole discretion, is at least equal to the greater of (x) the loan-to-value ratio for the Martin Resorts Properties as of the date of origination and (y) the loan-to-ratio for the Martin Resorts Properties immediately preceding the release of the individual property based on the appraisal delivered to lender in connection with the making of the loan or, at lender's election, as determined in its sole discretion, by an updated appraisal satisfactory to lender in all respects; (iv) the Martin Resorts Borrower pays 125% of the allocated loan amount for the applicable individual property to be released; and (v) the Martin Resorts Borrower pays a yield maintenance fee.

The Mortgaged Properties.    The Martin Resorts Mortgage Loan is secured by a first priority mortgage lien on the fee simple interest of the Martin Resorts Mortgaged Properties. The Martin Resorts Mortgaged Properties consist of 5 hotels containing approximately 375 rooms which were constructed between 1941 and 2005 and renovated between 2001 and 2005. One of the hotels is located in Paso Robles, one in Avila Beach and three in Pismo Beach, California. Two (2) of the Martin Resorts Mortgaged Properties, Shore Cliff Lodge and Shelter Cove Lodge, are flagged ‘‘Best Western.’’ As of June-July 2006, the weighted average occupancy of the Martin Hotel Mortgage Loan Properties was 71.7%


The Martin Resorts Mortgaged Properties(1)
Location # of
Rooms		 Appraised
Value		 Allocated
Loan
Amount
Shelter Cove Lodge 53
$ 13,300,000
$ 9,250,000
Avila Lighthouse Suites 54
19,700,000
10,000,000
Pismo Lighthouse Suites 70
18,400,000
10,750,000
Shore Cliff Lodge 100
13,700,000
9,500,000
Paso Robles Inn 98
16,600,000
10,500,000
Total/Weighted Average 375
$ 81,700,000
$ 50,000,000

Lockbox.    The Martin Resorts Borrower is required to cause the tenants to deposit all rents derived from each Martin Resorts Mortgaged Property directly into a segregated lockbox account under the control of the related mortgagee; Prior to

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the occurrence of a sweep period, the funds on deposit in the lockbox account will be swept each business day to an account controlled and maintained by the Martin Resorts Borrower. Following the occurrence of a sweep period, funds on deposit in the lockbox account will no longer be swept to an account maintained and controlled by the Martin Resorts Borrower, but will instead be swept on a daily basis to a cash collateral account under the sole control of the related mortgagee. During the existence of a sweep period, funds in the cash collateral account will be applied as follows, at the related mortgagee's option: first, to the payment of the Martin Resorts Borrower's real estate tax and insurance reserve obligation; second, to the payment of debt service; third, to the payment of the Martin Resorts Borrower's monthly capital expenditure reserve obligation; fourth, to the payment of the Martin Resorts Borrower's monthly operating expenses and fifth, to the Martin Resorts Borrower. A sweep period means the period of time from and after the earliest to occur of (i) the date on which the debt service coverage ratio is less than 1.10x based on a 30 year amortization schedule as of the end of any calendar quarter, (ii) an event of default under the property management agreement, (iii) an event of default under the Martin Resorts Loan, and/or (iv) three (3) months prior to the Maturity Date.

Property Management.    The Martin Resorts Properties are managed by Martin Resorts, Inc. (the ‘‘Martin Resorts Manager’’). The management agreement generally provides for a management fee of 4% of revenues per annum which is subordinated to the Martin Resorts Mortgage Loan. The management of the Martin Resorts Properties will be performed by either the Martin Resorts Manager, 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 Martin Resorts Properties, provided that the borrower must 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 Martin Resorts Mortgage Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Martin Resorts Mortgage Loan.

Terrorism Coverage.    The Martin Resorts Properties are required to maintain commercial property and business interruption insurance, which includes coverage against losses resulting from perils and acts of terrorism.

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Loan Combinations

General.    The mortgage pool will include six (6) mortgage loans that are each part of a separate Loan Combination. Each of those Loan Combinations consists of the particular mortgage loan that we intend to include in the trust and one or more other mortgage loans that we will not include in the trust. Each mortgage loan comprising a particular Loan Combination is evidenced by a separate promissory note. The aggregate debt represented by the entire Loan Combination, however, is secured by the same mortgage(s) or deed(s) of trust on the related mortgaged real property or properties. The mortgage loans constituting a particular Loan Combination are obligations of the same borrower(s) and are cross-defaulted. The allocation of payments to the respective mortgage loans comprising a Loan Combination, whether on a senior/ subordinated or a pari passu basis (or some combination thereof), is either effected through a co-lender agreement or other intercreditor arrangement to which the respective holders of the subject promissory notes are parties and/or may be reflected in the subject promissory notes and/or a common loan agreement. Such co-lender agreement or other intercreditor arrangement will, in general, govern the respective rights of the noteholders, including in connection with the servicing of the respective mortgage loans comprising a Loan Combination. Further, each such co-lender agreement or other intercreditor arrangement will generally prohibit the transfer of the ownership of any mortgage loan that is part of a Loan Combination to any person or entity other than: (i) institutional lenders, institutional investors, investment funds or other substantially similar institutions that, in each such case, exceeds a minimum net worth, surplus or shareholder equity requirement and are regularly engaged in the business of making or owning mortgage loans similar to the underlying mortgage loans; (ii) affiliates of the foregoing; or (iii) a trustee of a rated securitization trust.

The table below identifies each underlying mortgage loan that is part of a Loan Combination.


Underlying Mortgage Loans That are
Part of a Loan Combination		 Related Pari Passu
Non-Trust Loans(1)		 Related Senior
Non-Trust Loans(2)		 Related Subordinate
Non-Trust Loans(3)		 U/W NCF DSCR and
Original LTV of
Entire Loan
Combination
Mortgaged Property Name
(as identified on
Annex A-1 to this
Prospectus Supplement)		 Cut-off
Date
Principal
Balance		 % of
Initial
Mortgage
Pool
Balance		 Original
Principal
Balance		 Non-Trust
Loan
Noteholder		 Original
Principal
Balance		 Non-Trust
Loan
Noteholder		 Original
Principal
Balance		 Non-Trust
LoanNoteholder		 U/W NCF
DSCR		 Original
LTV
Ratio
1. 1211 Avenue of the Americas(4) $ 275,000,000
9.1% $ 400,000,000
LB-UBS 2006-C6 Commercial Mortgage Trust NAP NAP NAP NAP 1.86x 42.5%
2. Extendicare
Portfolio(5) 		$ 250,000,000
8.3% $ 250,000,000
Our Affiliate (8) NAP NAP NAP NAP 2.72x 63.7%
3. Reston Town
Center(6) 		$ 121,500,000
4.0% NAP NAP NAP NAP $ 89,750,000
Third Party
Institutional Investor (8)		 1.58x 55.3%
4. Triangle Town Center Subordinate Tranche(7) $ 29,000,000
1.0% NAP NAP $127,034,076
    
    
    
$43,965,924
    
    
    		 LB-UBS 2006-C1 Commercial Mortgage Trust
    
UBS Mortgage Loan Seller or its affiliate		 NAP NAP 1.05x 70.2%
5. Park Place LaPalma $ 8,223,932
0.3% NAP NAP NAP NAP $ 535,000
CBA – Mezzanine Finance, LLC 1.08x 81.9%
6. Gaffney Portfolio $ 5,325,698
0.2% NAP NAP NAP NAP $ 350,000
CBA – Mezzanine Finance, LLC 1.14x 81.1%
(1) Reflects those Non-Trust Loans (the ‘‘Pari Passu Non-Trust Loans’’) that are, in each case, entitled to payments of interest and principal on a pro rata and pari passu basis with the related underlying mortgage loan that is part of the same Loan Combination.
(2) Reflects those Non-Trust Loans (the ‘‘Senior Non-Trust Loans’’) that are, in each case, (i) prior to the occurrence of certain material uncured events of default, entitled to monthly payments of principal and interest on a senior, but pro rata, basis with the related underlying mortgage loan in the subject Loan Combination; and (ii) following and during the continuance of certain material uncured events of default with respect to the subject Loan Combination, entitled to payment of all accrued interest (other than Default Interest) and the total outstanding principal balance of the Senior Non-Trust Loans in the subject Loan Combination prior to payments of principal and interest being made with respect to the subject underlying mortgage loan.

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(3) Reflects those Non-Trust Loans (the ‘‘Subordinate Non-Trust Loans’’) that are, in each case: (i) prior to the occurrence of certain material uncured events of default, entitled to monthly payments of principal and interest on a subordinate, but pro rata, basis with the underlying mortgage loan and any Pari Passu Non-Trust Loan(s) in the subject Loan Combination; and (ii) following and during the continuance of certain material uncured events of default with respect to the subject Loan Combination, generally entitled to payments of principal and interest only following payment of all accrued interest (other than Default Interest) and the total outstanding principal balance of the underlying mortgage loan and any Pari Passu Non-Trust Loan(s) in the subject Loan Combination.
(4) The 1211 Avenue of the Americas Mortgage Loan is one of two (2) mortgage loans comprising the 1211 Avenue of the Americas Loan Combination that includes: (a) the 1211 Avenue of the Americas Mortgage Loan; and (b) the 1211 Avenue of the Americas Non-Trust Loan, with an original principal balance of $400,000,000, which is a Pari Passu Non-Trust Loan. The aggregate cut-off date principal balance of the 1211 Avenue of the Americas Loan Combination is $675,000,000.
(5) The Extendicare Portfolio Mortgage Loan is one of two (2) mortgage loans comprising the Extendicare Portfolio Loan Combination that includes: (a) the Extendicare Portfolio Mortgage Loan; and (b) the Extendicare Portfolio Non-Trust Loan, with an original principal balance of $250,000,000, which is a Pari Passu Non-Trust Loan. The aggregate cut-off date principal balance of the Extendicare Portfolio Loan Combination is $500,000,000.
(6) The Reston Town Center Mortgage Loan is one of two (2) mortgage loans comprising the Reston Town Center Loan Combination that includes: (a) the Reston Town Center Mortgage Loan; and (b) the Reston Town Center Non-Trust Loan, with an original principal balance of $89,750,000, which is a Subordinate Non-Trust Loan. The aggregate cut-off date principal balance of the Reston Town Center Loan Combination is $211,250,000.
(7) The Triangle Town Center Subordinate Tranche Mortgage Loan is one of three (3) mortgage loans comprising the Triangle Town Center Loan Combination that includes: (a) the Triangle Town Center Subordinate Tranche Mortgage Loan; (b) the Triangle Town Center Note A Senior Non-Trust Loan, with an original principal balance of $127,034,076, which is a Senior Non-Trust Loan; and (c) the Triangle Town Center Note B-1 Senior Non-Trust Loan, with an original principal balance of $43,965,924, which is a Senior Non-Trust Loan. The Triangle Town Center Subordinate Tranche Mortgage Loan is, in general, subordinate to both of the Triangle Town Center Senior Non-Trust Loans. The Triangle Town Center Note B-1 Senior Non-Trust Loan is, in general, subordinate to the Triangle Town Center Note A Senior Non-Trust Loan. The aggregate cut-off date principal balance of the Triangle Town Center Loan Combination is $200,000,000.
(8) Expected to be included in a separate commercial mortgage securitization.

Set forth below is a brief description of the co-lender arrangement regarding the underlying mortgage loans that are each part of a Loan Combination.

The 1211 Avenue of the Americas Loan Combination.    The 1211 Avenue of the Americas Mortgage Loan is part of a Loan Combination comprised of two (2) mortgage loans that are both secured by the 1211 Avenue of the Americas Mortgaged Property, identified in this prospectus supplement as the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan. The 1211 Avenue of the Americas Mortgage Loan will be serviced, along with the 1211 Avenue of the Americas Non-Trust Loan, under the series 2006-C6 pooling and servicing agreement, which is the governing document for the securitization transaction involving the 1211 Avenue of the Americas Non-Trust Loan. See ‘‘—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan’’ above for a more detailed description of the 1211 Avenue of the Americas Mortgage Loan. See also ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement for a more detailed description of certain rights of the 1211 Avenue of the Americas Non-Trust Loan Noteholder.

Co-Lender Agreement.    The 1211 Avenue of the Americas Co-Lender Agreement, dated as of September 11, 2006, between the two holders of the mortgage loans comprising the 1211 Avenue of the Americas Loan Combination, generally provides that:

•  Consent Rights.    Subject to certain limitations, the related Loan Combination Controlling Party will have the ability to advise and direct the series 2006-C6 master servicer and/or the 2006-C6 special servicer with respect to certain specified servicing actions regarding the 1211 Avenue of the Americas Loan Combination, including those involving foreclosure or material modification of the 1211 Avenue of the Americas Loan Combination. As of any date of determination, the Loan Combination Controlling Party for the 1211 Avenue of the Americas Loan Combination will be the holder of the 1211 Avenue of the Americas Mortgage Loan and the holder of the 1211 Avenue of the Americas Non-Trust Loan, acting jointly (directly or through representatives, which representative, in the case of the 1211 Avenue of the Americas Mortgage Loan will be, in accordance with the series 2006-C7 pooling and servicing agreement, the series 2006-C7 controlling class representative); provided that, in the event that the holders of the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan have not, within the requisite time period, directly or through representatives, executed a consent with respect to any advice, consent or direction regarding a specified servicing action, the series 2006-C6 special servicer or master servicer, as applicable, will implement such servicing action as it deems to be in accordance with the servicing standard set forth in the series 2006-C6 pooling and servicing agreement, and the decision of such series 2006-C6 special servicer or master servicer, as applicable, will be binding on all such parties.

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Priority of Payments.    Pursuant to the 1211 Avenue of the Americas Co-Lender Agreement, all amounts received with respect to the 1211 Avenue of the Americas Loan Combination will generally be allocated between the two (2) mortgage loans comprising the 1211 Avenue of the Americas Loan Combination on a pro rata and pari passu basis.

The Extendicare Portfolio Loan Combination.    The Extendicare Portfolio Mortgage Loan is part of a Loan Combination comprised of two (2) mortgage loans that are both secured by the Extendicare Portfolio Mortgaged Properties, identified in this prospectus supplement as the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan. See ‘‘—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan’’ above for a more detailed description of the Extendicare Portfolio Mortgage Loan. See also ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ in this prospectus supplement for a more detailed description of certain rights of the Extendicare Portfolio Non-Trust Loan Noteholder. The Extendicare Portfolio Non-Trust Loan will be serviced, along with the Extendicare Portfolio Mortgage Loan, under the series 2006-C7 pooling and servicing agreement by the master servicer and the special servicer, generally as if that Non-Trust Loan was a mortgage loan in the trust.

Co-Lender Agreement.    The Extendicare Portfolio Co-Lender Agreement, dated as of November 13, 2006, between the two holders of the mortgage loans comprising the Extendicare Portfolio Loan Combination, generally provides that:

•  Consent Rights.    Subject to certain limitations, the related Loan Combination Controlling Party will have the ability to advise and direct the series 2006-C7 master servicer and/or the 2006-C7 special servicer with respect to certain specified servicing actions regarding the Extendicare Portfolio Loan Combination, including those involving foreclosure or material modification of the Extendicare Portfolio Loan Combination. As of any date of determination, the Loan Combination Controlling Party for the Extendicare Portfolio Loan Combination will be the holder of the Extendicare Portfolio Mortgage Loan and the holder of the Extendicare Portfolio Non-Trust Loan, acting jointly (directly or through representatives, which representative, in the case of the Extendicare Portfolio Mortgage Loan will be, in accordance with the series 2006-C7 pooling and servicing agreement, the series 2006-C7 controlling class representative); provided that, in the event that the holders of the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan have not, within the requisite time period, directly or through representatives, executed a consent with respect to any advice, consent or direction regarding a specified servicing action, the series 2006-C7 special servicer or master servicer, as applicable, will implement such servicing action as it deems to be in accordance with the Servicing Standard, and the decision of such series 2006-C7 special servicer or master servicer, as applicable, will be binding on all such parties.

Priority of Payments.    Pursuant to the Extendicare Portfolio Co-Lender Agreement, all amounts received with respect to the Extendicare Portfolio Loan Combination will generally be allocated between the two (2) mortgage loans comprising the Extendicare Portfolio Loan Combination on a pro rata and pari passu basis.

The Reston Town Center Loan Combination.    The Reston Town Center Mortgage Loan is part of a Loan Combination comprised of two (2) mortgage loans that are both secured by the Reston Town Center Mortgaged Property, identified in this prospectus supplement as the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan. See ‘‘—Significant Underlying Mortgage Loans—The Reston Town Center Mortgage Loan’’ above for a more detailed description of the Reston Town Center Mortgage Loan. See also ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ in this prospectus supplement for a more detailed description of certain rights of the Reston Town Center Non-Trust Loan Noteholder. The Reston Town Center Non-Trust Loan will be serviced, along with the Reston Town Center Mortgage Loan, under the series 2006-C7 pooling and servicing agreement by the master servicer and the special servicer, generally as if that Non-Trust Loan was a mortgage loan in the trust (provided, however, that neither the master servicer nor the trustee will be required to make P&I advances with respect to such Non-Trust Loan).

Co-Lender Agreement.    The holders of the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan are bound by the terms and provisions of the Reston Town Center Co-Lender Agreement, dated as of September 26, 2006. The Reston Town Center Co-Lender Agreement generally includes the following provisions, among others:

•  Consent Rights.    The Loan Combination Controlling Party for the Reston Town Center Loan Combination will have the ability to advise and direct the series 2006-C7 master servicer and/or special servicer with respect to certain specified servicing actions regarding the Reston Town Center Loan Combination, including those involving foreclosure or material modification of the Reston Town Center Mortgage Loan and the Reston Town Center

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  Non-Trust Loan (see ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ in this prospectus supplement), subject to certain conditions described in the Reston Town Center Co-Lender Agreement. As of any date of determination, the Loan Combination Controlling Party for the Reston Town Center Loan Combination will be (A) the Reston Town Center Non-Trust Loan Noteholder or its designee, if and for so long as the unpaid principal balance of the Reston Town Center Non-Trust Loan, net of any existing Appraisal Reduction Amount with respect to the Reston Town Center Loan Combination, is equal to or greater than 25% of an amount equal to (i) the original principal balance of the Reston Town Center Non-Trust Loan, less (ii) any principal payments made by the Reston Town Center Borrower and received on and allocated to the Reston Town Center Non-Trust Loan, and (B) otherwise, the holder of the Reston Town Center Mortgage Loan or its designee (which designee, in accordance with the series 2006-C7 pooling and servicing agreement, will be the series 2006-C7 controlling class representative).
•  Purchase Option.    If and for so long as the Reston Town Center Loan Combination is specially serviced and, further, upon the date when a scheduled payment on the Reston Town Center Loan Combination becomes at least 60 days delinquent, the Reston Town Center Non-Trust Loan Noteholder (or its assignee) will have the option to purchase the Reston Town Center Mortgage Loan at a price generally equal to the unpaid principal balance of the Reston Town Center Mortgage Loan, together with all accrued unpaid interest on the Reston Town Center Mortgage Loan (other than Default Interest) to but not including the date of such purchase, and any servicing compensation, advances and interest on advances payable or reimbursable to any party to the series 2006-C7 pooling and servicing agreement pursuant thereto (but exclusive of any prepayment consideration and late payment charges).
•  Cure Rights.    The Reston Town Center Non-Trust Loan Noteholder has the assignable right to cure (i) a monetary default or a default susceptible to cure by the payment of money, within 10 business days of the later of (a) receipt by the Reston Town Center Non-Trust Loan Noteholder of notice of the subject event of default and (b) the expiration of the applicable grace period for the subject event of default and (ii) a non-monetary default within 30 days of the receipt by the Reston Town Center Non-Trust Noteholder of notice of the subject event of default; provided that no more than (A) three consecutive cure events are permitted, and (B) eight cure events are permitted during the term of the Reston Town Center Loan Combination.
•  Replacement of Special Servicer.    The Reston Town Center Non-Trust Loan Noteholder (for so long as it is the related Loan Combination Controlling Party) may replace the Special Servicer with respect to the Reston Town Center Loan Combination only, subject to satisfaction of the conditions set forth under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Replacement of the Special Servicer’’ in this prospectus supplement.

Priority of Payments.    Pursuant to the Reston Town Center Co-Lender Agreement, following the allocation of payments to each mortgage loan in the Reston Town Center Loan Combination in accordance with the related loan documents, unless there exist either (a) certain monetary events of default as to the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan Noteholder has not cured those defaults or (b) certain non-monetary events of default with respect to the Reston Town Center Mortgage Loan at a time when the Reston Town Center Mortgage Loan is being specially serviced, collections on the Reston Town Center Loan Combination will generally be allocated (after application to certain related unreimbursed or unpaid costs and expenses, including outstanding advances, together with interest thereon, and unpaid servicing compensation) to the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan generally in the following manner:

•  first, to the Reston Town Center Mortgage Loan, in an amount equal to all accrued and unpaid interest (other than Default Interest) on the unpaid principal balance thereof (net of related master servicing fees), until all such interest is paid in full;
•  second, to the Reston Town Center Mortgage Loan, in an amount equal to (a) all scheduled principal payments attributable to the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, (b) all voluntary principal prepayments attributable to the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, (c) all unscheduled principal payments on account of the application of insurance or condemnation proceeds attributable to the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable and (d) on the maturity date, all principal payments attributable to the Reston Town Center Mortgage Loan in accordance with the related

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  loan documents or the Reston Town Center Co-Lender Agreement, as applicable, with (in each case) principal to be attributable to the Reston Town Center Mortgage Loan under the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, on a pro rata basis in accordance with the outstanding principal balance of such mortgage loan relative to the outstanding principal balance of the Reston Town Center Loan Combination;
•  third, to the Reston Town Center Non-Trust Loan, up to the amount of any unreimbursed cure payments made by the Reston Town Center Non-Trust Loan Noteholder with respect to the Reston Town Center Loan Combination pursuant to the Reston Town Center Co-Lender Agreement or the applicable servicing agreement;
•  fourth, to the Reston Town Center Non-Trust Loan, in an amount equal to all accrued and unpaid interest (other than Default Interest) on the unpaid principal balance thereof (net of related master servicing fees), until all such interest is paid in full;
•  fifth, to the Reston Town Center Non-Trust Loan, in an amount equal to (a) all scheduled principal payments attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, (b) all voluntary principal prepayments attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, (c) all unscheduled principal payments on account of the application of insurance or condemnation proceeds attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable and (d) on the maturity date, all principal payments attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, with (in each case) principal to be attributable to the Reston Town Center Non-Trust Loan under the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable, on a pro rata basis in accordance with the outstanding principal balance of such mortgage loan relative to the outstanding principal balance of the Reston Town Center Loan Combination;
•  sixth, to the Reston Town Center Mortgage Loan, any prepayment consideration attributable to the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable;
•  seventh, to the Reston Town Center Non-Trust Loan, any prepayment consideration attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable;
•  eighth, to the Reston Town Center Mortgage Loan, any late payment charges and Default Interest due in respect of the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable (after application as provided in the applicable servicing agreement);
•  ninth, to the Reston Town Center Non-Trust Loan, any late payment charges and Default Interest due in respect of the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable (after application as provided in the applicable servicing agreement); and
•  tenth, for such remaining purposes as are provided in the Reston Town Center Co-Lender Agreement.

Pursuant to the Reston Town Center Co-Lender Agreement, during the existence of: (a) certain monetary events of default with respect to the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan Noteholder has not cured those defaults or (b) certain non-monetary events of default with respect to the Reston Town Center Mortgage Loan at a time when the Reston Town Center Mortgage Loan is being specially serviced, collections on the Reston Town Center Loan Combination will be allocated (after application to certain related unreimbursed or unpaid costs and expenses, including outstanding advances, together with interest thereon, and unpaid servicing compensation) to the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan generally in the following manner:

•  first, to the Reston Town Center Mortgage Loan, in an amount equal to accrued and unpaid interest (excluding Default Interest) on the unpaid principal balance thereof (net of related master servicing fees);
•  second, to the Reston Town Center Mortgage Loan, in an amount equal to the unpaid principal balance thereof, until such principal balance has been reduced to zero;
•  third, to the Reston Town Center Non-Trust Loan, up to the amount of any cure payments made by the Reston Town Center Non-Trust Loan Noteholder with respect to the Reston Town Center Loan Combination pursuant to the Reston Town Center Co-Lender Agreement or the applicable servicing agreement;

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•  fourth, to the Reston Town Center Non-Trust Loan in an amount equal to accrued and unpaid interest (excluding Default Interest) on the unpaid principal balance thereof (net of related master servicing fees);
•  fifth, to the Reston Town Center Non-Trust Loan in an amount equal to the unpaid principal balance thereof, until such principal balance has been reduced to zero;
•  sixth, to the Reston Town Center Mortgage Loan, any prepayment consideration attributable to the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable;
•  seventh, to the Reston Town Center Non-Trust Loan, any prepayment consideration attributable to the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable;
•  eighth, to the Reston Town Center Mortgage Loan, any late payment charges and Default Interest due in respect of the Reston Town Center Mortgage Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable (after application as provided in the applicable servicing agreement);
•  ninth, to the Reston Town Center Non-Trust Loan, any late payment charges and Default Interest due in respect of the Reston Town Center Non-Trust Loan in accordance with the related loan documents or the Reston Town Center Co-Lender Agreement, as applicable (after application as provided in the applicable servicing agreement);
•  tenth, to the Reston Town Center Mortgage Loan, any other amounts paid by the related borrower and due in respect of the Reston Town Center Mortgage Loan;
•  eleventh, to the Reston Town Center Non-Trust Loan, any other amounts paid by the related borrower and due in respect of the Reston Town Center Non-Trust Loan; and
•  twelfth, for such remaining purposes as are provided in the Reston Town Center Co-Lender Agreement.

The Triangle Town Center Loan Combination.    The Triangle Town Center Loan Combination is comprised of three (3) mortgage loans that are each secured by the same mortgage instruments on the related mortgaged real properties: (i) the Triangle Town Center Subordinate Tranche Mortgage Loan; (ii) the Triangle Town Center Note B-1 Senior Non-Trust Mortgage Loan, which is generally senior in right of payment to the Triangle Town Center Subordinate Tranche Mortgage Loan; and (iii) the Triangle Town Center Note A Senior Non-Trust Mortgage Loan, which is generally senior in right of payment to the Triangle Town Center Subordinate Tranche Mortgage Loan and the Triangle Town Center Note B-1 Senior Non-Trust Mortgage Loan. The Triangle Town Center Loan Combination will be serviced under the series 2006-C1 pooling and servicing agreement. See ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ for a more detailed description of the servicing of the Triangle Town Center Loan Combination.

Co-Lender Agreement.    The holders of the Triangle Town Center Subordinate Tranche Mortgage Loan and the Triangle Town Center Non-Trust Loans are bound by the terms and provisions of a Co-Lender Agreement, dated as of January 6, 2005, as modified by a Noteholders Priority Agreement dated in November 2006 (collectively, the ‘‘Triangle Town Center Co-Lender Agreement’’), which generally provides that:

•  Consent Rights.    The Loan Combination Controlling Party for the Triangle Town Center Loan Combination will have the ability to advise and direct the series 2006-C1 master servicer and/or special servicer with respect to certain specified servicing actions regarding the Triangle Town Center Loan Combination, including those involving foreclosure or material modification of the related underlying mortgage loan and the related Non-Trust Loans. As of any date of determination, the Loan Combination Controlling Party will be: (A) the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or its designee (which designee, in accordance with the series 2006-C7 pooling and servicing agreement, will be the series 2006-C7 controlling class representative), if and for so long as the unpaid principal balance of the Triangle Town Center Subordinate Tranche Mortgage Loan, net of any existing Appraisal Reduction Amount with respect to the Triangle Town Center Loan Combination, is equal to or greater than 25.0% of the original principal balance of the Triangle Town Center Subordinate Tranche Mortgage Loan; (B) the holder of the Triangle Town Center Note B-1 Senior Non-Trust Loan or its designee, if and for so long as the aggregate unpaid principal balance of the Triangle Town Center Note B-1 Senior Non-Trust Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan, net of any existing Appraisal Reduction Amount with respect to the Triangle Town Center Loan Combination, is equal to or greater than 25.0% of the aggregate original principal balance of the Triangle Town Center Note B-1 Senior Non-Trust Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan; and (C) otherwise, the holder of the Triangle Town Center Note A Senior Non-Trust Loan.

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•  Purchase Option.    If and for so long as the Triangle Town Center Loan Combination is specially serviced and, further, upon the date when a scheduled payment on such Loan Combination becomes at least 60 days delinquent, the Loan Combination Controlling Party will have the option to purchase the Triangle Town Center Note A Senior Non-Trust Loan, provided that if the Loan Combination Controlling Party is the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or its designee, the Loan Combination Controlling Party or its designee will also be required to purchase the Triangle Town Center Note B-1 Senior Non-Trust Loan, at a price generally equal to the unpaid principal balance of the Triangle Town Center Note A Senior Non-Trust Loan (and, if the Loan Combination Controlling Party is the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or its designee, the Triangle Town Center Note B-1 Senior Non-Trust Loan), together with all accrued unpaid interest thereon (other than Default Interest) to but not including the date of such purchase, and any servicing compensation, advances and interest on advances payable or reimbursable to any party to the series 2006-C1 pooling and servicing agreement pursuant thereto (but exclusive of any prepayment consideration and late payment charges); provided that, if the Loan Combination Controlling Party is the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or its designee or the holder of the Triangle Town Center Note B-1 Senior Non-Trust Loan or its designee, and if the Loan Combination Controlling Party does not exercise such purchase option within 45 days, then the other such holder will have the right to exercise such purchase option, subject to the terms of the Triangle Town Center Co-Lender Agreement.
•  Cure Rights.    The related Loan Combination Controlling Party has the assignable right to cure a monetary default or a default susceptible to cure by the payment of money, within 10 business days of the later of (a) receipt by the Loan Combination Controlling Party of notice of the subject event of default and (b) the expiration of the applicable grace period for the subject event of default; provided that no more than (x) three consecutive cure events are permitted, (y) seven cure events are permitted during the term of the Triangle Town Center Loan Combination and (z) four cure events, whether or not consecutive, in any 12 month period are permitted. In addition, for so long as the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or the Triangle Town Center Note B-1 Senior Non-Trust Loan is the Loan Combination Controlling Party, if such Loan Combination Controlling Party does not exercise such cure right within eight (8) business days of the later of (a) receipt by the Loan Combination Controlling Noteholder of notice of the subject event of default and (b) the expiration of the applicable grace period for the subject event of default, the other such holder shall have such right to cure such default within the remaining two business days of the time limits set forth in the first sentence of this paragraph.
•  Replacement of Special Servicer.    The related Loan Combination Controlling Party may replace the series 2006-C1 special servicer with respect to the Triangle Town Center Loan Combination only, subject to satisfaction of the conditions set forth in the series 2006-C1 pooling and servicing agreement.

Priority of Payments.    Pursuant to the Triangle Town Center Co-Lender Agreement, following the allocation of payments to each mortgage loan in the subject Loan Combination in accordance with the related loan documents, unless there exist either (a) certain monetary events of default as to the Triangle Town Center Note A Senior Non-Trust Loan (and the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or the Triangle Town Center Note B-1 Senior Non-Trust Loan has not cured those defaults) or (b) certain non-monetary events of default with respect to the related underlying mortgage loan at a time when the Triangle Town Center Note A Senior Non-Trust Loan is being specially serviced, collections on the Triangle Town Center Loan Combination will generally be allocated (after application to certain related unreimbursed or unpaid costs and expenses, including outstanding advances, together with interest thereon, and unpaid servicing compensation) to the Triangle Town Center Subordinate Tranche Mortgage Loan, the Triangle Town Center Note A Senior Non-Trust Loan and the Triangle Town Center Note B-1 Senior Non-Trust Loan generally in the following manner:

•  first, to the Triangle Town Center Note A Senior Non-Trust Loan, in an amount equal to all accrued and unpaid interest (other than Default Interest) on the unpaid principal balance thereof (net of related master servicing fees), until all such interest is paid in full;
•  second, to the Triangle Town Center Note A Senior Non-Trust Loan, in an amount equal to (a) its pro rata share, based on principal balances, of all scheduled principal payments received with respect to the Triangle Town Center Loan Combination, (b) its pro rata share, based on principal balances, of all voluntary principal prepayments

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  received with respect to the Triangle Town Center Loan Combination, (c) its pro rata share, based on principal balances, of all unscheduled principal payments on account of the application of insurance or condemnation proceeds received with respect to the Triangle Town Center Loan Combination, and (d) its pro rata share, based on principal balances, of the principal portion of any balloon payment received with respect to the Triangle Town Center Loan Combination;
•  third, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, up to the amount of any cure payments made by the holder of the Triangle Town Center Note B-1 Senior Non-Trust Loan;
•  fourth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, in an amount equal to all accrued and unpaid interest (other than Default Interest) on the unpaid principal balance thereof (net of related master servicing fees), until all such interest is paid in full;
•  fifth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, in an amount equal to (a) its pro rata share, based on principal balances, of all scheduled principal payments received with respect to the Triangle Town Center Loan Combination, (b) its pro rata share, based on principal balances, of all voluntary principal prepayments received with respect to the Triangle Town Center Loan Combination, (c) its pro rata share, based on principal balances, of all unscheduled principal payments on account of the application of insurance or condemnation proceeds received with respect to the Triangle Town Center Loan Combination, and (d) its pro rata share, based on principal balances, of the principal portion of any balloon payment received with respect to the Triangle Town Center Loan Combination;
•  sixth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, up to the amount of any cure payments made by the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan;
•  seventh, to the Triangle Town Center Subordinate Tranche Mortgage Loan, in an amount equal to all accrued and unpaid interest (other than Default Interest) on the unpaid principal balance thereof (net of related master servicing fees), until all such interest is paid in full;
•  eighth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, in an amount equal to (a) its pro rata share, based on principal balances, of all scheduled principal payments received with respect to the Triangle Town Center Loan Combination, (b) its pro rata share, based on principal balances, of all voluntary principal prepayments received with respect to the Triangle Town Center Loan Combination, (c) its pro rata share, based on principal balances, of all unscheduled principal payments on account of the application of insurance or condemnation proceeds received with respect to the Triangle Town Center Loan Combination, and (d) its pro rata share, based on principal balances, of the principal portion of any balloon payment received with respect to the Triangle Town Center Loan Combination;
•  ninth, to the Triangle Town Center Note A Senior Non-Trust Loan, its pro rata share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  tenth, to the Triangle Town Center Note A Senior Non-Trust Loan, its pro rata share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination (after application as provided in the applicable servicing agreement);
•  eleventh, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, its pro rata share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  twelfth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, its pro rata share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination (after application as provided in the applicable servicing agreement);
•  thirteenth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, its pro rata share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  fourteenth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, its pro rata share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination (after application as provided in the applicable servicing agreement); and

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•  fifteenth, to the Triangle Town Center Note A Senior Non-Trust Loan, the Triangle Town Center Note B-1 Senior Non-Trust Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan, pro rata and pari passu (calculated based on their respective principal balances), any remaining amount allocated between such mortgage loans.

Pursuant to the Triangle Town Center Co-Lender Agreement, following the allocation of payments to each mortgage loan in the subject Loan Combination in accordance with the related loan documents, during the existence of either (a) certain monetary events of default as to the Triangle Town Center Note A Senior Non-Trust Loan (and the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan or the Triangle Town Center Note B-1 Senior Non-Trust Loan has not cured those defaults) or (b) certain non-monetary events of default with respect to the related underlying mortgage loan at a time when the Triangle Town Center Note A Senior Non-Trust Loan is being specially serviced, collections on the Triangle Town Center Loan Combination will generally be allocated (after application to certain related unreimbursed or unpaid costs and expenses, including outstanding advances, together with interest thereon, and unpaid servicing compensation) to the Triangle Town Center Subordinate Tranche Mortgage Loan, the Triangle Town Center Note A Senior Non-Trust Loan and the Triangle Town Center Note B-1 Senior Non-Trust Loan generally in the following manner:

•  first, to the Triangle Town Center Note A Senior Non-Trust Loan, in an amount equal to accrued and unpaid interest (excluding Default Interest) on the unpaid principal balance thereof (net of related master servicing fees);
•  second, to the Triangle Town Center Note A Senior Non-Trust Loan, in an amount equal to the unpaid principal balance thereof, until such principal balance has been reduced to zero;
•  third, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, up to the amount of any cure payment made by the holder of the Triangle Town Center Note B-1 Senior Non-Trust Loan;
•  fourth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, in an amount equal to accrued and unpaid interest (excluding Default Interest) on the unpaid principal balance thereof (net of related master servicing fees);
•  fifth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, in an amount equal to the unpaid principal balance thereof, until such principal balance has been reduced to zero;
•  sixth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, up to the amount of any cure payment made by the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan;
•  seventh, to the Triangle Town Center Subordinate Tranche Mortgage Loan, in an amount equal to accrued and unpaid interest (excluding Default Interest) on the unpaid principal balance thereof (net of related master servicing fees);
•  eighth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, in an amount equal to the unpaid principal balance thereof, until such principal balance has been reduced to zero;
•  ninth, to the Triangle Town Center Note A Senior Non-Trust Loan, its pro rate share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  tenth, to the Triangle Town Center Note A Senior Non-Trust Loan, its pro rate share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination;
•  eleventh, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, its pro rate share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  twelfth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, its pro rate share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination;
•  thirteenth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, its pro rate share, based on principal balances, of any prepayment consideration actually paid with respect to the Triangle Town Center Loan Combination;
•  fourteenth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, its pro rate share, based on principal balances, of any late payment charges and Default Interest received with respect to the Triangle Town Center Loan Combination;

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•  fifteenth, to the Triangle Town Center Note A Senior Non-Trust Loan, its pro rata share, based on principal balances, of any other amounts paid by the related borrower;
•  sixteenth, to the Triangle Town Center Note B-1 Senior Non-Trust Loan, its pro rata share, based on principal balances, of any other amounts paid by the related borrower;
•  seventeenth, to the Triangle Town Center Subordinate Tranche Mortgage Loan, its pro rata share, based on principal balances, of any other amounts paid by the related borrower; and
•  eighteenth, to the Triangle Town Center Note A Senior Non-Trust Loan, the Triangle Town Center Note B-1 Senior Non-Trust Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan, pro rata and pari passu (calculated based on their respective principal balances), any remaining amount allocated between such mortgage loans.

The MezzCap Loan Combinations.    There are two (2) underlying mortgage loans, which respectively represent 0.3% and 0.2% of the Initial Mortgage Pool Balance, that are secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Park Place LaPalma and Gaffney Portfolio, respectively. In each case, the related borrower has encumbered the subject mortgaged real property with junior debt, which constitutes the related Subordinate Non-Trust Loan. In each case, the aggregate debt consisting of the underlying mortgage loan and the related Subordinate Non-Trust Loan, which two mortgage loans constitute a Loan Combination, is secured by a single mortgage or deed of trust on the subject mortgaged real property. We intend to include each of the underlying mortgage loans in the trust fund. Each of those Subordinate Non-Trust Loans was sold immediately after origination to CBA-Mezzanine Capital Finance, LLC, and will not be included in the trust fund. We refer to each of those Loan Combinations as a ‘‘MezzCap Loan Combination.’’

In the case of each MezzCap Loan Combination, the underlying mortgage loan and related Subordinate Non-Trust Loan are cross-defaulted. Each such Subordinate Non-Trust Loan has the same maturity date and prepayment structure as the related underlying mortgage loan. For purposes of the information presented in this prospectus supplement with respect to each underlying mortgage loan that is part of a MezzCap Loan Combination, unless the context clearly indicates otherwise, the loan-to-value ratio and debt service coverage ratio information reflects only that underlying mortgage loan and does not take into account the related Subordinate Non-Trust Loan.

In the case of each MezzCap Loan Combination, the trust, as the holder of the related underlying mortgage loan, and the holder of the related Subordinate Non-Trust Loan are parties to an intercreditor agreement, which we refer to as a Co-Lender Agreement. The servicing and administration of each underlying mortgage loan (and, to the extent described below, the related Subordinate Non-Trust Loan) that is part of a MezzCap Loan Combination will be performed by the master servicer (and, in the case of the related Subordinate Non-Trust Loan, on behalf of the holder of that loan). The master servicer will be required to collect payments with respect to any Subordinate Non-Trust Loan following the occurrence of certain events of default with respect to the related MezzCap Loan Combination set forth in the related Co-Lender Agreement, each of which events of default is referred to as a MezzCap Material Default. The following describes certain provisions of the Co-Lender Agreements for the MezzCap Loan Combinations.

Priority of Payments.    The rights of the holder of each Subordinate Non-Trust Loan that is part of a MezzCap Loan Combination to receive payments of interest, principal and other amounts are subordinated to the rights of the holder of the related underlying mortgage loan to receive such amounts. So long as an MezzCap Material Default has not occurred or, if an MezzCap Material Default has occurred but is no longer continuing with respect to a MezzCap Loan Combination, the borrower under the subject MezzCap Loan Combination will be required to make separate payments of principal and interest to the holder of the related underlying mortgage loan and Subordinate Non-Trust Loan. Escrow and reserve payments will be made to the master servicer on behalf of the trust as the holder of the underlying mortgage loans. Any voluntary principal prepayments will be applied as provided in the related loan documents; provided that any prepayment resulting from the payment of insurance proceeds or condemnation awards or accepted during the continuance of an event of default will be applied as though there were an existing MezzCap Material Default. If a MezzCap Material Default occurs and is continuing with respect to a MezzCap Loan Combination, then all amounts tendered by the borrower on the related Subordinate Non-Trust Loan will be subordinated to all payments due with respect to the subject underlying mortgage loan and the amounts with respect to the applicable MezzCap Loan Combination will be paid in the following manner:

•  first, to the master servicer, the special servicer or the trustee, up to the amount of any unreimbursed costs and expenses paid by such entity, including unreimbursed advances and interest thereon;
•  second, to the master servicer and the special servicer, in an amount equal to the accrued and unpaid servicing fees and/or other compensation earned by them;

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•  third, to the subject underlying mortgage loan, in an amount equal to interest (other than default interest) due with respect to the subject underlying mortgage loan;
•  fourth, to the subject underlying mortgage loan, in an amount equal to the principal balance of the subject underlying mortgage loan until paid in full;
•  fifth, to the subject underlying mortgage loan, in an amount equal to any prepayment premium, to the extent actually paid, allocable to the subject underlying mortgage loan;
•  sixth, to the related Subordinate Non-Trust Loan up to the amount of any unreimbursed costs and expenses paid by the holder of the related Subordinate Non-Trust Loan;
•  seventh, to the related Subordinate Non-Trust Loan, in an amount equal to interest (other than default interest) due with respect to the related Subordinate Non-Trust Loan;
•  eighth, to the related Subordinate Non-Trust Loan, in an amount equal to the principal balance of the related Subordinate Non-Trust Loan until paid in full;
•  ninth, to the related Subordinate Non-Trust Loan, in an amount equal to any prepayment premium, to the extent actually paid, allocable to the related Subordinate Non-Trust Loan;
•  tenth, to the subject underlying mortgage loan and the related Subordinate Non-Trust Loan, in that order, in an amount equal to any unpaid default interest accrued on the subject underlying mortgage loan and the related Subordinate Non-Trust Loan, respectively; and
•  eleventh, to the subject underlying mortgage loan and the related Subordinate Non-Trust Loan, pro rata, based upon the initial principal balances, any amounts actually collected that represent late payment charges, other than a prepayment premium or default interest, that are not payable to the applicable master servicer, the special servicer or the trustee; and
•  twelfth, any excess, to the subject underlying mortgage loan and the related Subordinate Non-Trust Loan, pro rata, based upon the initial principal balances.

Notwithstanding the foregoing, amounts payable with respect to a Subordinate Non-Trust Loan that is part of a MezzCap Loan Combination will not be available to cover all costs and expenses associated with the related underlying mortgage loan. Unless an MezzCap Material Default exists with respect to a MezzCap Loan Combination, payments of principal and interest with respect to the related Subordinate Non-Trust Loan will be made directly by the borrower to the holder of the related Subordinate Non-Trust Loan and, accordingly, will not be available to cover certain expenses that, upon payment out of the trust fund, will constitute Additional Trust Fund Expenses. For example, a Servicing Transfer Event could occur with respect to a MezzCap Loan Combination, giving rise to special servicing fees, at a time when no MezzCap Material Default exists. In addition, following the resolution of all Servicing Transfer Events (and presumably all MezzCap Material Defaults) with respect to a MezzCap Loan Combination, workout fees would be payable. The special servicer has agreed that special servicing fees, workout fees and principal recovery fees earned with respect to any Subordinate Non-Trust Loan that is part of a MezzCap Loan Combination will be payable solely out of funds allocable thereto. However, special servicing compensation earned with respect to an underlying mortgage loan that is part of a MezzCap Loan Combination, as well as interest on related advances and various other servicing expenses, will be payable out of collections allocable to that underlying mortgage loan and/or general collections on the mortgage pool if collections allocable to the related Subordinate Non-Trust Loan are unavailable or insufficient to cover such items.

If, after the expiration of the right of the holder of any Subordinate Non-Trust Loan that is part of a MezzCap Loan Combination to purchase the related underlying mortgage loan (as described below), the related underlying mortgage loan or the subject Subordinate Non-Trust Loan is modified in connection with a workout so that, with respect to either the related underlying mortgage loan or the subject Subordinate Non-Trust 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 that MezzCap Loan Combination, then all payments to the trust, as the holder of the related underlying mortgage loan, will be made as if the workout did not occur and the payment terms of the related underlying mortgage loan will remain the same. In that case, the holder of the subject Subordinate Non-Trust Loan will be required to bear the full economic effect of all waivers, reductions or deferrals of amounts due on either the related underlying mortgage loan or the subject Subordinate Non-Trust Loan attributable to the workout (up to the outstanding principal balance, together with accrued interest, of the subject Subordinate Non-Trust Loan).

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So long as a MezzCap Material Default has not occurred with respect to a MezzCap Loan Combination, the master servicer will have no obligation to collect payments with respect to the related Subordinate Non-Trust Loan. A separate servicer of that Subordinate Non-Trust Loan will be responsible for collecting amounts payable in respect of that Subordinate Non-Trust Loan. That servicer will have no servicing duties or obligations with respect to the related underlying mortgage loan or the related mortgaged real property. If an MezzCap Material Default occurs with respect to a MezzCap Loan Combination, the master servicer or the special servicer, as applicable, will (during the continuance of that MezzCap Material Default) collect and distribute payments for both the related underlying mortgage loan and the related Subordinate Non-Trust Loan according to the sequential order of priority provided for in the related Co-Lender Agreement.

Consent Rights.    Subject to certain limitations with respect to modifications and certain rights of the holder of a Subordinate Non-Trust Loan that is part of a MezzCap Loan Combination to purchase the related underlying mortgage loan (as discussed in the next paragraph and under ‘‘—Purchase Option’’ below), the holder of that Subordinate Non-Trust Loan has no voting, consent or other rights with respect to the master servicer’s or special servicer’s administration of, or the exercise of its rights and remedies with respect to, the related MezzCap Loan Combination.

In the case of each MezzCap Loan Combination, the ability of the master servicer or the special servicer, as applicable, to enter into any assumption, amendment, deferral, extension, increase or waiver of any term or provision of the related Subordinate Non-Trust Loan, the related underlying mortgage loan or the related loan documents, is limited by the rights of the holder of the related Subordinate Non-Trust Loan to approve modifications and other actions as contained in the related Co-Lender Agreement; provided that the consent of the holder of a Subordinate Non-Trust Loan will not be required in connection with any modification or other action with respect to the related MezzCap Loan Combination after the expiration of the right of the holder of the related Subordinate Non-Trust Loan to purchase the related underlying mortgage loan; and provided, further, that no consent or failure to provide consent of the holder of the related Subordinate Non-Trust Loan may cause the master servicer or special servicer to violate applicable law or any term of the series 2006-C7 pooling and servicing agreement, including the Servicing Standard. The holder of a Subordinate Non-Trust Loan that is part of the MezzCap Combination may not enter into any assumption, amendment, deferral, extension, increase or waiver of the subject Subordinate Non-Trust Loan or the related loan documents without the prior written consent of the trustee, as holder of the related underlying mortgage loan, acting through the master servicer and/or the special servicer as specified in the series 2006-C7 pooling and servicing agreement.

Purchase Option.    In the case of each MezzCap Loan Combination, upon the occurrence of any one of certain defaults that are set forth in the related Co-Lender Agreement, the holder of the related Subordinate Non-Trust Loan will have the right to purchase the related underlying mortgage loan at a purchase price determined under the related Co-Lender Agreement and generally equal to the sum of (a) the outstanding principal balance of the related underlying mortgage loan, (b) accrued and unpaid interest on the outstanding principal balance of the related underlying mortgage loan (excluding any default interest or other late payment charges), (c) any unreimbursed servicing advances made by the master servicer, the special servicer or the trustee with respect to the related mortgaged real property, together with any advance interest thereon, (d) reasonable out-of-pocket legal fees and costs incurred in connection with enforcement of the subject MezzCap Loan Combination by the master servicer or the special servicer in accordance with its duties and related to an event of default, (e) any interest on any unreimbursed P&I advances made by the master servicer or the trustee with respect to the related underlying mortgage loan, (f) any related master servicing fees, primary servicing fees, special servicing fees and trustee’s fees payable under the series 2006-C7 pooling and servicing agreement, and (g) out-of-pocket expenses incurred by the trustee, the special servicer or the master servicer with respect to the subject MezzCap Loan Combination together with advance interest thereon.

Additional Loan and Property Information

Delinquency and Loss Information.    Except as described in the next paragraph, none of the mortgage loans that we intend to include in the trust were, as of the cut-off date, or have been at any time since origination, 30 days or more delinquent with respect to any monthly debt service payment due thereunder. There has been no forgiveness of interest or principal with respect to the mortgage loans that we intend to include in the trust.

Tenant Matters.    Described and listed below are special considerations regarding tenants at the mortgaged real properties for the mortgage loans that we intend to include in the trust—

•  Two hundred ten (210) of the mortgaged real properties, securing 53.7% of the Initial Mortgage Pool Balance and 62.6% of the Initial Loan Group 1 Balance, respectively, are, in each case, a retail property, an office property or an industrial/warehouse property that has space leased to one or more major tenants that each occupies at least 25% of the net rentable area of the particular property.

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•  One hundred forty-one (141) of the mortgaged real properties, securing 10.1% of the Initial Mortgage Pool Balance, and 11.8% of the Initial Loan Group 1 Balance, respectively, are entirely or substantially leased to a single tenant.
•  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.
•  One (1) of the mortgaged real properties, securing 0.5% of the Initial Mortgage Pool Balance and 3.2% of the Initial Loan Group 2 Balance is a multifamily rental property that has a material concentration of military personnel. Each of those mortgaged real properties could be adversely affected by the closing of the local military base.
•  Thirteen (13) of the mortgaged real properties, securing 1.0% of the Initial Mortgage Pool Balance, respectively, and 6.7% of the Initial Loan Group 2 Balance, respectively, are each a multifamily rental property that has a material tenant concentration of students. These mortgaged real properties may experience more fluctuations in occupancy rate than other types of properties.
•  Certain tenant leases at the mortgaged real properties have terms that are shorter than the terms of the related mortgage loans and, in some cases, significantly shorter. For example, see also ‘‘Description of the Mortgage Pool —Significant Underlying Mortgage Loans’’ and the footnotes to Annex A-1 to this prospectus supplement.
•  Several anchors at the retail properties do not have operating covenants or those covenants have lapsed.
•  Certain of the mortgaged real properties used for multifamily rental purposes are located in states and/or municipalities where laws or ordinances impose limitations on increases in rent on the rental units of such mortgaged real properties.
•  Three (3) of the mortgaged real properties, securing 0.6% of the Initial Mortgage Pool Balance and 4.0% of the Initial Loan Group 2 Balance, are each a multifamily rental property that, receives rent subsidies from the United States Department of Housing and Urban Development under its Section 8 Housing Assistance Program. Also, in the case of the Royal Crest Apartments mortgage loan, securing 0.2% of the Initial Mortgage Pool Balance and 1.4% of the Initial Loan Group 2 Balance, the mortgaged real property is subject to a requirement that at least 20% of the mortgaged property be reserved for low income tenants, provided that this requirement will cease to apply to the Mortgaged Property after a foreclosure, condemnation or similar event.
•  There may be one or more cases in which the sole tenant or a significant tenant of a related mortgaged property is an agency of the United States Federal Government or a state or local government. Typically the terms of such tenancies are prescribed by the Government Services Administration or the applicable state authority and may contain few or no limitations on the ability of such tenant to terminate the lease and/or vacate the premises and cease the payment of rent.

Leasehold Mortgages.    Six (6) of the mortgage loans that we intend to include in the trust, representing 4.9% of the Initial Mortgage Pool Balance, and 5.6 of the Initial Loan Group 1 Balance and 0.6% of the Initial Loan Group 2 Balance, respectively, as identified on Annex A-1 under the heading ‘‘Ownership Interest’’ as leaseholds are secured by a mortgage lien on the related borrower’s leasehold interest (but not by the underlying fee interest) in all or a material portion of the related mortgaged real property. In each of those cases, the related ground lease, taking into account all exercised extension options and all options that may be exercised by the lender (if not already exercised by the borrower), expires more than 10 years after the stated maturity of the related mortgage loan and the related lessor has agreed to give the holder of that mortgage loan notice of, and the right to cure, any default or breach by the lessee.

Purchase Options.    With respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Sharp Rees-Stealy Medical Office Building, which mortgage loan represents 0.5% of the Initial Mortgage Pool Balance and 0.6% of the Initial Loan Group 1 Balance, the lease between the related borrower and the sole tenant at the mortgaged property gives the tenant an option to purchase the related mortgaged property. If the tenant delivers notice of its intent to exercise this option: (a) a hard lockbox is triggered; and (b) the loan must be prepaid in its entirety with the applicable prepayment consideration on the applicable purchase date. The borrower and the related guarantor are personally liable for the difference between the purchase price and the amount required to satisfy the mortgage loan, including any prepayment consideration.

With respect to the General McMullen Self Storage mortgage loan, representing 0.1% of the Initial Mortgage Pool Balance and 0.1% of the Loan Group 1 Balance respectively, one of the tenants, who is also the property manager, has a purchase option to buy the property with 90 days notice at fair market value.

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Rights of First Refusal.    With respect to the mortgage loan secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Park Meadows Village and Mrs. Winners, representing 0.1% of the Initial Mortgage Pool Balance, and 0.1% of the Initial Loan Group 1 Balance, each of the leases between the related borrowers and tenants requires that, in the event the borrowers negotiate a sale of the mortgaged property with a third party, the borrowers are required to provide the related tenant with an opportunity to purchase the mortgaged property at such negotiated price. If such tenant does not accept an offer submitted to it by the borrower within the time period specified in the lease, such right of first refusal shall be considered waived as to that offer; provided, however, that the right of first refusal will be a continuing right as to any subsequent or modified purchase offer. The foregoing right of first purchase will be inapplicable to a transfer of the mortgaged property upon foreclosure of the related mortgage, a transfer upon a deed in lieu of foreclosure, or any other enforcement action under the mortgage but generally will be applicable to any subsequent transfers. With respect to the Walgreens Seguin underlying mortgage loan, representing 0.1% of the Initial Mortgage Pool Balance and 0.2% of the Initial Loan Group 1 Balance, respectively, the Walgreen's lease contains a right of first offer which does not exempt from its application a foreclosure or deed in lieu of foreclosure. The related borrower has covenanted to provide an SNDA from Walgreen's which will exclude a foreclosure and deed in lieu of foreclosure from the application of the right of first offer.

Other Financing.    In the case of the underlying mortgage loans described under ‘‘Description of the Mortgage Pool— Loan Combinations’’ above in this prospectus supplement, the mortgaged real property or properties that secure each such underlying mortgage loan also secure one or more related mortgage loans that are not included in the trust. See ‘‘Risk Factors —Some of the Mortgaged Real Properties Are or May Be Encumbered by Additional Debt and the Ownership Interests in Some Borrowers Have Been or May Be Pledged to Secure Debt Which, in Either Case, May Reduce the Cash Flow Available to the Subject Mortgaged Real Property’’ in this prospectus supplement, ‘‘—Significant Underlying Mortgage Loans —The 1211 Avenue of the Americas Mortgage Loan,’’ ‘‘—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan,’’ ‘‘—Significant Underlying Mortgage Loans—The Reston Town Center Mortgage Loan’’ and ‘‘Description of the Mortgage Pool—Loan Combinations’’ above.

In addition, with respect to the First and Main North, representing 0.6% of the Initial Mortgage Pool Balance and 0.7% of the Initial Loan Group 1 Balance, the borrower is permitted to incur additional secured debt subject to certain loan to value and debt service coverage ratios as well as a subordination and standstill agreement acceptable to the lender.

Except as disclosed under this ‘‘—Other Financing’’ subsection, including as described in the second succeeding paragraph, we are not aware of any other mortgage loans that we intend to include in the trust, as to which there is any additional secured debt encumbering the related mortgaged real property. However, the direct or indirect equity interests in borrowers under some of the underlying mortgage loans have been or are permitted to be pledged to secure mezzanine or affiliate debt. ‘‘Mezzanine debt’’ is debt secured by the principal’s direct ownership interest in a related borrower, and the affiliate debt referred to in this ‘‘—Other Financing’’ section is secured by an entity’s indirect ownership interest in a related borrower.

With respect to the 520 Madison Avenue Mortgage Loan, which mortgage loan represents 15.7% of the Initial Mortgage Pool Balance and 18.3% of the Initial Loan Group 1 Balance, respectively, there are two mezzanine loans secured by a pledge of 100% of the direct and indirect equity interests in the related borrower in the aggregate amount of $50,000,000 (Mezzanine A) and $75,000,000 (Mezzanine B), as further described under ‘‘—Significant Underlying Mortgage Loans—The 520 Madison Ave Mortgage Loan— Mezzanine Financing’’ in this prospectus supplement.

With respect to the 1211 Avenue of the Americas Mortgage Loan, which mortgage loan represents 9.1% of the Initial Mortgage Pool Balance and 10.6% of the Initial Loan Group 1 Balance, respectively, as of the cut-off date, there are three mezzanine loans secured by a pledge of 100% of the direct and indirect equity interests in the related borrower in the aggregate amount of $275,000,000 and an unfunded junior mezzanine facility of $25,000,000, as further described under ‘‘—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan—Mezzanine Financing’’ in this prospectus supplement.

With respect to the Colony Square Mortgage Loan and the Midtown Plaza Mortgage Loan, which mortgage loans together represent 3.8% and 2.2%, respectively, of the Initial Mortgage Pool Balance and 4.5% and 2.5%, respectively, of the Initial Loan Group 1 Balance, there is a joint mezzanine facility loan secured by a pledge of the indirect equity interests in the related borrowers (together with its indirect equity interests in other affiliated borrowers) in the aggregate amount of $35,000,000, as further described under ‘‘—Significant Underlying Mortgage Loan—The Colony Square Mortgage Loan—Mezzanine Financing’’ and ‘‘—Significant Underlying Mortgage Loans—The Midtown Plaza Mortgage Loan—Mezzanine Financing’’ in this prospectus supplement.

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With respect to the Government Property Advisors Portfolio Mortgage Loan, which mortgage loan represents 3.2% of the Initial Mortgage Pool Balance and 3.7% of the Initial Loan Group 1 Balance, respectively, there is mezzanine financing secured by pledges of equity interests in the related borrower in the maximum aggregate principal amount of $20,020,671 as further described under ‘‘—Significant Underlying Mortgage Loans—The Government Advisors Mortgage Loan—Mezzanine Financing’’ in this prospectus supplement.

With respect to the 175 Fulton Avenue mortgage loan, which mortgage loan represents 0.7% of the Initial Mortgage Pool Balance and 0.8% of the Initial Loan Group 1 Balance, respectively, there is one mezzanine loan secured by a pledge of 100% of the direct and indirect equity interests in the related borrower in the aggregate amount of $3,650,000. The related mezzanine intercreditor agreement provides that (i) the mezzanine lenders are restricted in their ability to transfer their loans, (ii) any foreclosure of the mezzanine loan must comply with the relevant rating agency requirements, (iii) the lender is restricted from modifying the mortgage loan in certain ways without the consent of the mezzanine lenders, (iv) the mezzanine loan documents can be modified in certain ways without the consent of the lender and (v) the mezzanine lenders will have certain cure and purchase and cure rights with respect to the mortgage loan.

The table below identifies, by property or portfolio name set forth on Annex A-1 to this prospectus supplement, those mortgage loans, collectively representing 25.3% of the Initial Mortgage Pool Balance, 28.3% of the Initial Loan Group 1 Balance, and 6.8% of the Initial Loan Group 2 Balance, respectively, for which the owners of the related borrowers are permitted to pledge their ownership interests in the borrower as collateral for mezzanine debt. The incurrence of this mezzanine indebtedness is generally subject to certain conditions, that may include any one or more of the following conditions:

•  consent of the mortgage lender;
•  satisfaction of loan-to-value tests, which provide that the aggregate principal balance of the related mortgage loan and the subject mezzanine debt may not exceed a specified percentage and debt service coverage tests, which provide that the combined debt service coverage ratio of the related mortgage loan and the subject mezzanine loan may not be less than a specified amount;
•  subordination of the mezzanine debt pursuant to a subordination and intercreditor agreement; and/or
•  confirmation from each rating agency that the mezzanine financing will not result in a downgrade, qualification or withdrawal of the then current ratings of the offered certificates.

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Mortgaged Property Name Mortgage Loan
Cut-off Date
Balance		 Maximum
Combined LTV
Ratio Permitted		 Minimum
Combined
DSCR Permitted
1211 Avenue of the Americas $ 275,000,000.00
59.8
%
 1.29
x
Reston Town Center 121,500,000.00
75.0
1.25
Colony Square 116,000,000.00
80.0
N/A
Midtown Plaza 65,000,000.00
80.0
N/A
Santa Maria Plaza 23,500,000.00
80.0
1.20
Citizens Ohio Portfolio 2 9,205,035.00
95.0
1.00
Citizens Michigan Portfolio 5 8,556,920.00
95.0
1.00
Felton's Shopping Center 8,500,000.00
85.0
1.15
Melbourne Village 8,400,000.00
85.0
1.15
Citizens Illinois Portfolio 3 7,878,479.00
95.0
1.00
Citizens Illinois Portfolio 1 7,708,684.39
95.0
1.00
Park Place Plaza 7,200,000.00
85.0
1.15
Citizens Northeast Portfolio 7,076,077.00
95.0
1.00
Preston Racquet Club 5,850,000.00
85.0
1.15
Town West Plaza 5,458,000.00
85.0
1.15
Shenandoah Woods 5,200,000.00
85.0
1.15
Fond du Lac Plaza 5,059,000.00
85.0
1.15
Citizens New York Portfolio 4 4,864,987.00
95.0
1.00
Citizens 15 Portfolio 4,861,024.00
95.0
1.00
Citizens New York Portfolio 1 4,677,051.00
95.0
1.00
Chillicothe Plaza 4,550,000.00
85.0
1.10
Southern Oaks 4,400,000.00
85.0
1.15
Citizens 4 Portfolio 4,278,447.00
95.0
1.00
Lemon Bay 4,100,000.00
85.0
1.15
Citizens New York Portfolio 3 4,088,893.00
95.0
1.00
Citizens 27 Portfolio 3,586,021.00
95.0
1.00
Hidden Pines 3,475,000.00
85.0
1.15
Citizens 22 Portfolio 3,386,165.00
95.0
1.00
Citizens New York Portfolio 2 3,360,685.00
95.0
1.00
Parkview Apartments 3,200,000.00
85.0
1.15
Citizens 21 Portfolio 3,119,763.00
95.0
1.00
Shelley Station 2,800,000.00
85.0
1.15
Citizens 13 Portfolio 2,745,130.00
95.0
1.00
Citizens 14 Portfolio 2,599,151.00
95.0
1.00
Unity Pointe 2,440,000.00
85.0
1.15
Ashley Square 2,420,000.00
85.0
1.15
Crossroads Shopping Center 2,300,000.00
85.0
1.15
Inglewood Village 2,300,000.00
85.0
1.15
Citizens 28 Portfolio 2,216,075.00
95.0
1.00

While a mezzanine lender has no security interest in or rights to the related mortgaged real properties, a default under the mezzanine loan could cause a change in control in the mortgage borrower as a result of the realization on the pledged ownership interests by the mezzanine lender. See ‘‘Risk Factors—Risks Relating to the Mortgage Loans—A Borrower’s Other Loans May Reduce the Cash Flow Available to the Mortgaged Real Property Which May Adversely Affect Payment on Your Certificates; Mezzanine Financing Reduces a Principal’s Equity in, and Therefore Its Incentive to Support, a Mortgaged Real Property’’ in this prospectus supplement.

Furthermore, in connection with most of the underlying mortgage loans for which mezzanine financing is permitted as referenced above in this section, if the mezzanine financing bears interest at a floating rate, lender may determine the debt service average ratio on the basis of a market-based constant reasonably determined by lender.

In addition, with respect to the Extendicare Portfolio Mortgage Loan, representing 8.3% of the Initial Mortgage Pool Balance and 9.6% of the Initial Loan Group 1 Balance, the ultimate owner of the related borrower has a revolving loan in place in the maximum principal amount of $120,000,000, secured by a pledge of the direct and indirect equity in the operators of the related mortgaged real properties and the indirect equity in the related borrower and the related master tenant, as

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further described under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan—Revolving Loan’’ below in this prospectus supplement.

In addition, in the case of some of the other mortgage loans that we intend to include in the trust, one or more of the principals of the related borrower may have incurred or may in the future also incur mezzanine or affiliate debt.

Except as disclosed under this ‘‘—Other Financing’’ subsection, we are not aware of any other mezzanine or affiliate debt affecting borrowers under the mortgage loans that we intend to include in the trust.

In addition, some of the borrowers under the mortgage loans that we intend to include in the trust have incurred or may, in the future, be permitted to incur unsecured debt, including loans from members or partners, that is in addition to customary trade debt and equipment financing. For example, with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Phoenicia Specialty Foods, representing 0.2% of the Initial Mortgage Pool Balance, and 0.3% of the Initial Loan Group 1 Balance, the related borrower has unsecured intercompany debt in the amount of approximately $1,200,000.00.

Additional debt, in any form, may cause a diversion of funds from property maintenance and increase the likelihood that the borrower will become the subject of a bankruptcy proceeding. See ‘‘Risk Factors—Additional Secured Debt Increases the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates; Co-Lender, Intercreditor and Similar Agreements May Limit a Mortgage Lender’s Rights’’ in the accompanying base prospectus.

Zoning and Building Code Compliance.    In connection with the origination of each mortgage loan that we intend to include in the trust, the related originator generally examined whether the use and occupancy of the mortgaged real property were in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may have been in the form of legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports and/or representations by the related borrower.

Where the property as currently operated is a permitted nonconforming use and/or structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, the related originator—

•  determined that any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring;
•  determined that casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by the originator to be sufficient to pay off the related mortgage loan in full;
•  determined that the mortgaged real property, if permitted to be repaired or restored in conformity with current law, would in the originator’s judgment constitute adequate security for the related mortgage loan; and/or
•  required law and ordinance insurance.

See ‘‘Risk Factors—Many of the Mortgaged Real Properties Are Legal Nonconforming Uses or Legal Nonconforming Structures’’ in this prospectus supplement. See also ‘‘Risk Factors—Some of the Mortgaged Real Properties May Not Comply With All Applicable Zoning Laws and/or Local Building Codes or with the Americans With Disabilities Act of 1990’’ in this prospectus supplement, and ‘‘Risk Factors—Changes in Zoning Laws May Adversely Affect the Use or Value of a Real Property’’ in the accompanying base prospectus.

Outstanding building and/or fire code violations, in addition to other zoning violations, may exist with respect to some of the mortgaged real properties that secure the underlying mortgage loans. In some, but not all, of those circumstances, the borrower under the related mortgage loan has agreed to cure such violations within a set period of time from the date of the closing of such mortgage loan; however, there can be no assurance that the borrowers will comply with their obligations to cure any such violations with respect to the related mortgaged real properties.

In addition, certificates of occupancy or other evidence of compliance with zoning and building codes may not be available for all or for certain portions of some of the mortgaged real properties which secure mortgage loans included in the trust.

Further, some of the mortgaged real properties securing mortgage loans that we intend to include in the trust may comply currently with applicable zoning or land-use ordinances by virtue of certain contractual arrangements or agreements.

However, if those contractual arrangements or agreements are breached or otherwise terminated, then the related mortgaged real property or properties may no longer be in compliance.

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Lockboxes.    One hundred forty-eight (148) mortgage loans that we intend to include in the trust, representing approximately 89.1% of the Initial Mortgage Pool Balance, generally provide that rents and certain other income derived from the related mortgaged real properties will be paid, currently or upon the occurrence of a triggering event, into one of the following types of lockboxes:


Type of Lockbox Number of
Mortgage
Loans		 % of Initial
Mortgage
Pool Balance
Hard 14
53.5%
Springing Soft 89
25.7%
Springing Hard 44
9.2%
Soft 1
0.7%
•  Hard Lockbox.    Tenants are directed to pay rents directly to a lockbox account controlled by the lender (or, with respect to multifamily rental properties and mobile home park properties, income is collected and deposited in the lockbox account by an unaffiliated property manager). In most of the cases described in the preceding sentence: (a) until the occurrence of a triggering event, funds deposited into the lockbox account are disbursed to or at the direction of the borrower on a daily or other periodic basis or the related borrower has withdrawal rights, and the borrower is obligated to pay, among other things, debt service payments, taxes and insurance, reserves and other amounts due under the related mortgage loan; and (b) following the occurrence of a triggering event and requisite notice to the depository, funds on deposit in the lockbox account are required to be disbursed by the lender in accordance with the related loan documents to satisfy the borrower’s obligation to pay certain of the items described in clause (a) above, with the remainder disbursed to the borrower. In a few of the cases described in the second preceding sentence, funds on deposit in the lockbox account are required (without the requirement of a triggering event) to be disbursed by the lender in accordance with the related loan documents to satisfy the borrower’s obligation to pay, among other things, current debt service payments, taxes and insurance, reserve account deposits and operating expenses, with the remainder disbursed to the borrower.
•  Hard/Hotel Lockbox.    With respect to hospitality properties only, cash or ‘‘over-the-counter’’ receipts are deposited into the lockbox account by a property manager (which may be affiliated with the borrower), while credit card receivables are deposited directly into a lockbox account) controlled by the lender. In most of the cases described in the preceding sentence: (a) until the occurrence of a triggering event, funds deposited into the lockbox account are disbursed to or at the direction of the borrower on a daily or other periodic basis or the related borrower has withdrawal rights, and the borrower is obligated to pay, among other things, debt service payments, taxes and insurance, reserves and other amounts due under the related mortgage loan; and (b) following the occurrence of a triggering event and requisite notice to the depository, funds on deposit in the lockbox account are required to be disbursed by the lender in accordance with the related loan documents to satisfy the borrower’s obligation to pay the items described in clause (a) above, with the remainder disbursed to the borrower. In very few of the cases described in the second preceding sentence, funds on deposit in the lockbox account are required to be disbursed by the lender in accordance with the related loan documents to satisfy the borrower’s obligation to pay, among other things, current debt service payments, taxes and insurance, reserve account deposits and operating expenses, with the remainder disbursed to the borrower.
•  Springing Hard Lockbox.    Either—
1.  income is collected by the borrower or the property manager (which may be an affiliate of the borrower) and paid into a lockbox account or tenants are directed to pay rents directly to a lockbox account that is, in each case, controlled by the borrower, or by both the borrower and the lender and, following the occurrence of a triggering event, that existing lockbox account or another lockbox account is established as a Hard Lockbox with lender cash management; or
2.  a lockbox account is not in place on the closing date and the related mortgage loan documents provide for the establishment, in certain cases upon lender’s request, following the occurrence of certain triggering events, of a Hard Lockbox with lender cash management.
•  Soft Lockbox.    Income is collected by the borrower or an affiliated property manager and paid into a lockbox account that otherwise satisfies the description for a Hard Lockbox.

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•  Springing Soft Lockbox.    A lockbox account is not in place on the closing date and the related mortgage loan documents provide for the establishment, in certain cases upon lender’s request, following the occurrence of certain triggering events, of a Soft Lockbox as described in the preceding bullet.

For the purposes of the foregoing lockbox definitions, examples of triggering events may include one or more of the following:

1.  a failure to pay the related mortgage loan in full on or before any related anticipated repayment date;
2.  a decline, by more than a specified amount, in the net operating income of the related mortgaged real property;
3.  a failure to meet a specified debt service coverage ratio;
4.  a discontinuation of operations, lease default, lease termination, lease non-renewal or similar event involving one or more major tenants; and/or
5.  an event of default under the mortgage loan.

Property, Liability and Other Insurance.    Although exceptions exist, such as in cases where tenants maintain insurance or are permitted to self-insure, the loan documents for each of the mortgage loans that we intend to include in the trust generally require the related borrower to maintain or cause to be maintained with respect to the corresponding mortgaged real property the following insurance coverage:

•  property insurance in an amount that generally is, subject to a customary deductible, at least equal to the lesser of—
1.  the outstanding principal balance of the subject underlying mortgage loan (together with, in the case of an underlying mortgage loan that is part of a Loan Combination, the Non-Trust Loan(s) that are part of that Loan Combination), and
2.  the full insurable value or the full insurable replacement cost of the improvements located on the insured property;
•  if any portion of the improvements at the property was in an area identified in the federal register by the Federal Emergency Management Agency as having special flood hazards, flood insurance meeting the requirements of the Federal Insurance Administration guidelines, if available, in an amount that is equal to the least of—
1.  the outstanding principal balance of the subject underlying mortgage loan (together with, in the case of an underlying mortgage loan that is part of a Loan Combination, the Non-Trust Loan(s) that are part of that Loan Combination),
2.  the full insurable value of the improvements on the insured property that are located in the area identified as having specific flood hazards,
3.  the maximum amount of insurance available under the National Flood Insurance Act of 1968, and
4.  the full insurable replacement cost of the improvements located on the mortgaged real property;
•  comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the insured property, in such an amount as is generally required by reasonably prudent commercial lenders with respect to properties similar to the mortgaged real properties in similar locales; and
•  business interruption or rent loss insurance in an amount not less than the projected rental income or revenue from the insured property for at least 12 months.

With respect to most of the mortgage loans that we intend to include in the trust, the related loan documents generally provide for at least one of the following: (a) the related borrower is required to maintain full or partial insurance coverage for property damage to the related mortgaged real property against certain acts of terrorism (except that the requirement to obtain such insurance coverage may be subject to, in certain instances, the commercial availability of that coverage, certain limitations with respect to the cost thereof and/or whether such hazards are at the time commonly insured against for property similar to such mortgaged real properties and located in or around the region in which such mortgaged real property is located); (b) the related borrower is required to provide such additional insurance coverage as the lender may reasonably require to protect its interests or to cover such hazards as are commonly insured against for similarly situated properties (except that the related borrower may object to the reasonableness of having to maintain insurance against acts of terrorism); (c) a credit-rated tenant is obligated to restore the related mortgaged real property in the event of a casualty; or (d) a

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principal of the related borrower is responsible for losses resulting from terrorist acts which are not otherwise covered by insurance. Such policies generally do not provide coverage for biological, chemical or nuclear events or domestic terrorism.

The mortgaged real properties for the mortgage loans that we intend to include in the trust, including certain of those properties located in California, are generally not insured against earthquake risks. However, if a mortgaged real property was located in California or in seismic zones 3 or 4 and seismic reports obtained in connection with the origination of the mortgage loan concluded that the mortgaged real property was likely to experience a probable maximum or bounded loss in excess of 20% of the estimated replacement cost of the improvements as a result of an earthquake, the borrower or a tenant occupying the entire mortgaged real property was required to obtain earthquake insurance. It should be noted, however, that because the seismic assessments may not necessarily have used the same assumptions in assessing probable maximum loss, it is possible that some of the mortgaged real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.

Eighty-four (84) of the mortgaged real properties, securing 15.2% of the Initial Mortgage Pool Balance, 11.7% of the Initial Loan Group 1 Balance, and 36.1% of the Initial Loan Group 2 Balance, respectively, are located in Florida, Texas or Louisiana, states that have historically been at greater risk than other states regarding other acts of nature, such as hurricanes and tornadoes. The related mortgage loan documents with respect to most of those mortgaged real properties, together with the related mortgage loan documents with respect to a significant number of mortgaged real properties located in various other states, require the related borrower to maintain windstorm insurance.

Various forms of insurance maintained with respect to any of the mortgaged real properties for the underlying mortgage loans, 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. 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. See ‘‘Risk Factors—Lack of Insurance Coverage Exposes a Trust to Risk for Particular Special Hazard Losses’’ in the accompanying base prospectus.

The applicable originator and its successors and assigns are the beneficiaries under separate title insurance policies with respect to each mortgage loan that we intend to include in the trust. Each title insurer may enter into such co-insurance and reinsurance arrangements with respect to the title insurance policy as are customary in the title insurance industry. Subject to standard exceptions and/or exclusions, including those regarding claims made in the context of insolvency proceedings, each title insurance policy will provide coverage to the trustee for the benefit of the series 2006-C7 certificateholders for claims made against the trustee regarding the priority and validity of the borrowers’ title to the subject mortgaged real property.

Assessments of Property Condition

Property Inspections.    Each of the mortgaged real properties securing a mortgage loan that we intend to include in the trust was inspected in connection with the origination or acquisition of that mortgage loan to assess its general condition.

Appraisals.    Each of the mortgaged real properties securing a mortgage loan that we intend to include in the trust was appraised by a state certified appraiser or an appraiser belonging to the Appraisal Institute. Those appraisals were conducted in accordance with the Appraisal Foundation’s Uniform Standards of Professional Appraisal Practices. Each of those appraisals was conducted within approximately 12 months of the origination of the related mortgage loan that we intend to include in the trust and generally have not been updated. Each of the resulting appraisal reports or a separate letter contains a statement by the appraiser stating that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. We have not independently verified the accuracy of that statement with respect to any of those properties. The primary purpose of each of those appraisals was to provide an opinion of the fair market value of the related mortgaged real property. There can be no assurance that another appraiser would have arrived at the same opinion of value. The dates of the subject appraisals, or appraisal updates, and the resulting appraised values are shown on Annex A-1 to this prospectus supplement.

Environmental Assessments.    With respect to each of the mortgaged real properties securing the underlying mortgage loans, a third-party consultant conducted a Phase I environmental site assessment, updated a previously conducted Phase I environmental site assessment or conducted a transaction screen, as described under ‘‘Risk Factors—Lending on Income-Producing Real Properties Entails Environmental Risks’’ in this prospectus supplement.

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The above-described environmental assessments may have identified various adverse or potentially adverse environmental conditions at the respective mortgaged real properties. If the particular condition is significant, then this could result in a claim for damages by any party injured by the condition. In addition, in certain cases the environmental consultant recommended that action be taken in respect of a materially adverse or potentially material adverse environmental condition at the related mortgaged real property. Further, in certain cases, the environmental assessments described above identified potential and, in some cases, serious environmental problems, at properties adjacent or otherwise near to the related mortgaged real properties. See ‘‘Risk Factors—Lending on Income-Producing Real Properties Entails Environmental Risks’’ in this prospectus supplement for a discussion of certain environmental conditions identified at some of the mortgaged real properties securing mortgage loans that we intend to include in our trust.

The information provided by us in this prospectus supplement regarding environmental conditions at the respective mortgaged real properties is based on the results of the environmental assessments referred to above and has not been independently verified by us, the underwriters or any of our or their respective affiliates.

Environmental Insurance.    As discussed above, certain mortgaged real properties securing the underlying mortgage loans may, in each case, be covered by a secured creditor impaired property policy. Each of these policies provides coverage for the following losses, subject to the applicable deductible, policy terms and exclusions, individual and policy aggregate limits, and further subject to the conditions and limitations set forth below:

1.  With respect to secured creditor impaired property policies which provide full loan balance coverage, if during the term of the policy there is an event of default under the subject mortgage loan and a pollution condition that was discovered prior to or during the default, or that was disclosed to the insurer prior to the effective date of the policy, and the holder of the note has not foreclosed on the collateral, the insurer will (if the pollution condition exists at the time of default) indemnify the trust for the outstanding balance on the date of default, including interest from the date of default until the date that the outstanding balance is paid, interest on any advances of scheduled payments made by the trust after the date of default as well as advances and interest on advances for property protection for up to 10% of the outstanding balance on the date of default. Under the policy, a ’’pollution condition’’ is the presence of hazardous substances on, under or emanating from the property in concentrations or amounts exceeding the maximum levels allowed by applicable environmental laws or a government order or directive. With respect to certain other secured creditor impaired property policies, policy terms may limit the coverage under such policies to the lesser of actual losses resulting from such pollution condition or the amount of the related mortgage loan.
2.  If the trust becomes legally obligated to pay for claims for bodily injury, property damage or clean-up costs resulting from pollution conditions on, under or emanating from the property that are made against the insured and reported to the insurer during the policy period, the insurer will defend against and pay such claims.
3.  If the trust incurs clean-up costs after enforcing the related mortgage, the insurer will pay for clean-up costs sustained as a result of pollution conditions on, under or emanating from the property provided that the trust reports the pollution conditions to the appropriate governmental agency in accordance with applicable environmental laws in effect at the time of the discovery of the pollution conditions.

The secured creditor impaired property policies described above require that the insured or the party having direct responsibility for administering or servicing the trust provide the insurer with written notice of a claim as soon as possible but no later than 45 days after first learning of the default and pollution condition or loss. In addition to other excluded matters, the policy does not cover claims arising out of the presence of lead-based paint or asbestos, penalties arising out of violations of law or clean-up costs that are voluntarily incurred. The environmental insurance may be provided under a blanket insurance policy covering other real properties, some of which may not secure loans in the trust. See ‘‘—Property, Liability and Other Insurance’’ above.

The premium for the secured creditor impaired property policies described above has been paid in full as of the Issue Date.

Engineering Assessments.    In connection with the origination process, various engineering firms inspected the respective mortgaged real properties securing the mortgage loans that we intend to include in the trust, to assess the structure, exterior walls, roofing, interior structure and mechanical and electrical systems. The resulting reports indicated deferred maintenance items and/or recommended capital improvements with respect to some of those mortgaged real properties. In cases where the cost of repair was deemed material, the related borrowers were generally required to deposit with the lender an amount generally equal to 125% of the engineering firm’s estimated cost of the recommended repairs, corrections or replacements to assure their completion.

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Assignment of the Underlying Mortgage Loans

On or before the Issue Date, we will acquire, pursuant to one or more mortgage loan purchase agreements—

•  88 mortgage loans, with an aggregate cut-off date principal balance of $1,996,897,422, from the Lehman Mortgage Loan Seller,
•  57 mortgage loans, with an aggregate cut-off date principal balance of $637,523,984, from the UBS Mortgage Loan Seller, and
•  39 mortgage loans, with an aggregate cut-off date principal balance of $385,237,134, from the KeyBank Mortgage Loan Seller.

We will transfer to the trustee, for the benefit of the series 2006-C7 certificateholders, all of the mortgage loans that we so acquire from the Lehman Mortgage Loan Seller, the UBS Mortgage Loan Seller and the KeyBank Mortgage Loan Seller.

In each case, the transferor will assign the subject mortgage loans, without recourse, to the transferee. In connection with the foregoing transfers, the UBS Mortgage Loan Seller will be required to deliver to the trustee, with respect to each UBS Mortgage Loan, the KeyBank Mortgage Loan Seller will be required to deliver to the trustee, with respect to each KeyBank Mortgage Loan, and we will be required to deliver to the trustee, with respect to each Lehman Mortgage Loan, the following documents, among others:

•  either—
1.  the original promissory note(s) evidencing that mortgage loan, or
2.  if any 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 the mortgage instrument;
•  the original or a copy of any separate assignment of leases and rents, together with originals or copies of any intervening assignments of that assignment of leases and rents;
•  either—
1.  an executed assignment of the mortgage instrument in favor of the trustee, in recordable form except for missing recording information relating to a mortgage instrument that has not been returned from the applicable recording office, or
2.  a certified copy of that assignment as sent for recording;
•  either—
1.  an executed assignment of any separate assignment of leases and rents in favor of the trustee, in recordable form except for missing recording information relating to an assignment of leases and rents that has not been returned from the applicable recording office, or
2.  a certified copy of that assignment as sent for recording; and
•  an original or copy of the related policy or certificate of lender’s title insurance policy, or if a title insurance policy has not yet been issued, a ‘‘marked-up’’ commitment for title insurance or a pro forma policy;

provided that, in the case of the Triangle Town Center Subordinate Tranche Mortgage Loan, the UBS Mortgage Loan Seller will only be obligated to deliver, and in the case of the 1211 Avenue of the Americas Mortgage Loan, we will only be obligated to deliver, the original promissory note evidencing that mortgage loan, a copy of the related Co-Lender Agreement and a copy of the agreement governing the servicing of that mortgage loan.

The trustee, either directly or through a custodian, is required to hold all of the documents delivered to it with respect to the underlying mortgage loans, in trust for the benefit of the series 2006-C7 certificateholders and, in the case of a Serviced Loan Combination, also for the benefit of the related Serviced Non-Trust Loan Noteholder(s). 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. None of the trustee, the master servicer, the special servicer or any custodian is under any duty or

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obligation to inspect, review or examine any of the documents relating to the underlying mortgage loans to determine whether the document is valid, effective, enforceable, in recordable form or otherwise appropriate for the represented purpose.

The above loan documents, among others, with respect to the 1211 Avenue of the Americas Mortgage Loan (with the exception of the original mortgage note evidencing the 1211 Avenue of the Americas Mortgage Loan) have been delivered to the trustee under the series 2006-C6 pooling and servicing agreement, which governs the securitization of a pool of commercial and multifamily mortgage loans that includes the 1211 Avenue of the Americas Non-Trust Loan. The above loan documents, among others, with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan (with the exception of the original mortgage note evidencing the Triangle Town Center Subordinate Tranche Mortgage Loan) have been delivered to the trustee under the series 2006-C1 pooling and servicing agreement, which governs the securitization of a pool of commercial and multifamily mortgage loans that includes the Triangle Town Center Note A Senior Non-Trust Loan.

The trustee may appoint, at the trustee’s expense, one or more custodians to hold all or a portion of the mortgage files as agent for the trustee, which custodian may not be the depositor, any mortgage loan seller or any affiliate of any of them. Neither the master servicer nor the special servicer has any duty to verify that any such custodian is qualified to act as such in accordance with the series 2006-C7 pooling and servicing agreement. The trustee may enter into an agreement to appoint a custodian which is not the trustee, so long as that agreement: (a) is consistent with the series 2006-C7 pooling and servicing agreement in all material respects and requires the custodian to comply with all of the applicable conditions of the series 2006-C7 pooling and servicing agreement; (b) provides that if the trustee no longer acts in the capacity of trustee hereunder, the successor trustee or its designee may thereupon assume all of the rights and, except to the extent they arose prior to the date of assumption, obligations of the custodian under the subject agreement or, alternatively, may terminate that agreement without cause and without payment of any penalty or termination fee; and (c) may provide that the related custodian will be entitled to be indemnified out of the assets of the trust fund in connection with losses arising from the performance by such custodian of its duties in accordance with the provisions of the related custodial agreement if and to the extent that such indemnification would be permitted for any other agent of the trustee. See ‘‘Description of the Governing Documents— Rights, Protections, Indemnities and Immunities of the Trustee’’ in the accompanying base prospectus. The appointment of one or more custodians does not relieve the trustee from any of its obligations under the series 2006-C7 pooling and servicing agreement, and the trustee is responsible for all acts and omissions of any custodian. The series 2006-C7 pooling and servicing agreement requires that any custodian engaged by the trustee must maintain a fidelity bond and errors and omissions policy in amounts customary for custodians performing duties similar to those set forth in therein. LaSalle itself will act as initial custodian on behalf of the trustee. See ‘‘Transaction Participants—The Trustee’’ in this prospectus supplement for a discussion of the procedures to be employed by LaSalle in connection with the safekeeping and preservation of the documents with respect to the underlying mortgage loans.

If, as provided in the series 2006-C7 pooling and servicing agreement—

•  any of the above-described documents required to be delivered by us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller to the trustee is not delivered,
•  we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, are notified of the missing document, and
•  either (a) we, in the case of a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, in the case of a UBS Mortgage Loan, and the KeyBank Mortgage Loan Seller, in the case of a KeyBank Mortgage Loan, agree that, or (b) an arbitration panel makes a binding determination that, in the case of (a) or (b), such omission materially and adversely affects the value of the subject underlying mortgage loan, such material and adverse effect to be determined (i) with respect to any notice of a document omission that is delivered within the 24-month period following the Issue Date, as of the pricing date for the series 2006-C4 certificates, and (ii) with respect to any notice of a document omission that is delivered subsequent to the 24-month period following the Issue Date, as of the date of such notice,

then the omission will constitute a ‘‘Material Document Omission’’ as to which the trust will have the rights against us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, that are described under ‘‘—Cures and Repurchases’’ below.

Within a specified period following the later of—

•  the Issue Date, and

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•  the date on which all recording information necessary to complete the subject document is received by the trustee,

one or more independent third party contractors, retained at the expense of us, in the case of the Lehman Mortgage Loans, the UBS Mortgage Loan Seller, in the case of the UBS Mortgage Loans, and the KeyBank Mortgage Loan Seller, in the case of the KeyBank Mortgage Loans, must submit for recording in the real property records of the applicable jurisdiction each of the assignments of recorded loan documents in favor of the trustee described above. Because most of the mortgage loans that we intend to include in the trust are newly originated, many of those assignments cannot be completed and recorded until the related mortgage and/or assignment of leases and rents, reflecting the necessary recording information, is returned from the applicable recording office.

In addition to the foregoing, the UBS Mortgage Loan Seller will be required to deliver to the master servicer with respect to each UBS Mortgage Loan (other than an Outside Serviced Trust Mortgage Loan), the KeyBank Mortgage Loan Seller will be required to deliver to the master servicer with respect to each KeyBank Mortgage Loan, and we will be required to deliver to the master servicer with respect to each Lehman Mortgage Loan (other than an Outside Serviced Trust Mortgage Loan), only the documents required to be included in the related Servicing File for the subject underlying mortgage loan and only to the extent such documents: (a) were delivered in connection with the origination of such underlying mortgage loan, (b) are reasonably necessary for the ongoing administration or servicing of such underlying mortgage loan by the master servicer or the special servicer in connection with its duties under the series 2006-C7 pooling and servicing agreement, and (c) are in our possession or under our control, in the possession or under the control of the UBS Mortgage Loan Seller, or in the possession or under the control of the KeyBank Mortgage Loan Seller, as applicable; except that none of us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller will be required to deliver any draft documents, privileged or other communications or correspondence, credit underwriting or due diligence analyses or information, credit committee briefs or memoranda or other internal approval documents or data or internal worksheets, memoranda, communications or evaluations. With respect to each underlying mortgage loan, within a specified period of time following the Issue Date, the master servicer will be required to certify solely as to its receipt, but not the sufficiency or accuracy, of the documents constituting the Servicing File that are then in its possession. In addition, if any document required to be included in the related Servicing File and delivered to the master servicer with respect to a subject underlying mortgage loan, is not so delivered, and if a written request therefor is not made to us, in the case of a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, in the case of a UBS Mortgage Loan, or the KeyBank Mortgage Loan Seller, in the case of a KeyBank Mortgage Loan, within approximately 18 months of the date of the certification referred to in the preceding sentence, then none of us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, will have any further obligation to deliver such document with respect to the subject mortgage loan. The master servicer will not be under any duty or obligation to inspect, review or examine any of the documents constituting the Servicing File to determine whether they are valid, effective, enforceable or otherwise appropriate for the represented purpose and will not be obligated to pursue any remedies against us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as the case may be, in the event those documents are not delivered.

Representations and Warranties

As of the Issue Date, and subject to certain exceptions (including, without limitation, any conflicting disclosure contained in this prospectus supplement), we will make with respect to each Lehman Mortgage Loan that we include in the trust, the UBS Mortgage Loan Seller will make with respect to each UBS Mortgage Loan that we include in the trust, and the KeyBank Mortgage Loan Seller will make with respect to each KeyBank Mortgage Loan that we include in the trust, representations and warranties generally to the effect described below, together with any other representations and warranties as may be required by the applicable rating agencies:

•  The information pertaining to the mortgage loan set forth in the mortgage loan schedule attached to the series 2006-C7 pooling and servicing agreement, regarding, among other things, its cut-off date principal balance, its mortgage interest rate and the amount of the next monthly payment, will be true and correct in all material respects as of the cut-off date.
•  To the actual knowledge of the representing party, as of the date of its origination, the mortgage loan complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of the mortgage loan, including applicable usury laws.
•  The representing party is the owner of the mortgage loan, has good title to it, has full right, power and authority to sell, assign and transfer the mortgage loan and is transferring the mortgage loan free and clear of any and all liens, pledges, charges and security interests of any nature encumbering the mortgage loan, other than servicing rights.

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•  The proceeds of the mortgage loan have been fully disbursed, except in those cases where the full amount of the mortgage loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related mortgaged real property; and there is no requirement for future advances thereunder.
•  The promissory note, each mortgage instrument and each assignment of leases and rents, if separate from the related mortgage instrument, with respect to the mortgage loan is the legal, valid and binding obligation of the maker thereof, subject to any nonrecourse provisions in the particular document and any state anti-deficiency legislation, and is enforceable in accordance with its terms, except that (1) such enforcement may be limited by (a) bankruptcy, insolvency, receivership, reorganization, liquidation, voidable preference, fraudulent conveyance and transfer, moratorium and/or other similar laws affecting the enforcement of creditors’ rights generally and (b) by general principles of equity, regardless of whether that enforcement is considered in a proceeding in equity or at law, and (2) certain provisions in the subject agreement or instrument may be further limited or rendered unenforceable by applicable law, but subject to the limitations set forth in clause (1) of this bullet, those limitations will not render the subject agreement or instrument invalid as a whole or substantially interfere with the lender’s realization of the principal benefits and/or security provided by the subject agreement or instrument.
•  Subject to the exceptions and limitations on enforceability set forth in the fifth bullet under this ‘‘—Representations and Warranties’’ section, there is no valid offset, defense, counterclaim or right of rescission with respect to the promissory note or any related mortgage instrument or other agreement executed by the related borrower in connection with the mortgage loan.
•  The assignment of each related mortgage instrument in favor of the trustee (or, in the case of the 1211 Avenue of the Americas Mortgage Loan, the trustee under the series 2006-C6 pooling and servicing agreement or, in the case of the Triangle Town Center Subordinate Tranche Mortgage Loan, the trustee under the series 2006-C1 pooling and servicing agreement) constitutes the legal, valid, binding and, subject to the exceptions and limitations set forth in the fifth bullet under this ‘‘—Representations and Warranties’’ section, enforceable assignment of that mortgage instrument to the trustee.
•  Each related mortgage instrument is a valid and, subject to the exceptions and limitations set forth in the fifth bullet under this ‘‘—Representations and Warranties’’ section, enforceable first lien on the related mortgaged real property, which mortgaged real property is free and clear of all encumbrances and liens having priority over or on a parity with the first lien of the mortgage instrument, except for Permitted Encumbrances, and except that the mortgage instrument relating to each underlying mortgage loan that is part of a Loan Combination also secures one or more related Non-Trust Loans that will not be included in the trust. The Permitted Encumbrances do not, individually or in the aggregate, materially and adversely interfere with the benefits of the security intended to be provided by the related mortgage instrument, the current principal use of the related mortgaged real property or the current ability of the related mortgaged real property to generate sufficient cashflow to enable the related borrower to timely pay in full the principal and interest on the subject mortgage loan (other than a balloon payment, which would require a refinancing).
•  All taxes and governmental assessments which, in all such cases, were directly related to the subject mortgaged real property and could constitute liens on the subject mortgaged real property prior to the lien of the related mortgage, and that prior to the cut-off date became due and payable in respect of, and materially affect, any related mortgaged real property, have been paid or are not yet delinquent, or an escrow of funds in an amount sufficient to cover those payments has been established.
•  To the actual knowledge of the representing party, there is no proceeding pending for total or partial condemnation of any related mortgaged real property that materially affects its value, and such related mortgaged real property was free of material damage.
•  A nationally recognized title insurance company has issued an ALTA (or its equivalent) lender’s title insurance policy insuring that the mortgage is a valid first lien on the mortgaged real property subject only to Permitted Encumbrances.
•  To the actual knowledge of the representing party, as of the date of origination of the mortgage loan, except where a tenant is permitted under a lease to insure or self-insure or is required to restore the premises or a related sponsor has agreed to be responsible for certain losses due to windstorm or certain acts of terrorism, all insurance required

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  under the mortgage loan was in full force and effect with respect to each related mortgaged real property; provided that the insurance for acts of terrorism and the amount thereof may be limited by the commercial availability of such coverage, whether the lender may reasonably require such insurance, cost limitations and/or whether such hazards are commonly insured against for similar properties.
•  Other than payments due but not yet 30 days or more delinquent, to the actual knowledge of the representing party, no material default, breach, violation or event of acceleration exists under the related mortgage loan documents, and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration exists under any of such documents.
•  As of the Issue Date, the mortgage loan is not 30 days or more past due in respect of any scheduled payment of principal and/or interest.
•  Subject to certain identified exceptions, the related mortgage loan documents do not provide for or permit, without the prior written consent of the holder of the related mortgage note or the satisfaction of certain conditions in the related mortgage, any related mortgaged real property or any direct controlling interest in the borrower to secure any other promissory note or debt (other than another mortgage loan in the trust or a Non-Trust Loan which is part of a Loan Combination).
•  One or more environmental site assessments, or updates thereof were performed with respect to each the mortgaged real property during the 12-month period preceding the cut-off date and none of the environmental reports reveal any circumstances or conditions that are in violation of any applicable environmental laws, or if such report does reveal such circumstances, then such report also identifies one or more factors mitigating such circumstances. Additionally, the borrower has represented and warranted generally to the effect that, to its knowledge, except as set forth in the environmental reports described above, it has not used, caused or permitted to exist, and will not use, cause or permit to exist, on the mortgaged real property, any hazardous materials in any manner which violates applicable environmental laws.
•  The related mortgage loans documents require the borrower to comply with applicable environmental laws.
•  To the actual knowledge of the representing party, as of the date of origination of the mortgage loan, the related borrower is not a debtor in any bankruptcy, reorganization, insolvency or comparable proceeding.
•  The mortgage loan documents do not provide for any contingent interest in the cash flow of the related mortgaged real property.
•  Subject to certain identified exceptions, the related mortgage loan contains provisions for the acceleration thereof if, without the prior written consent of the lender, confirmation from the applicable rating agencies that the ratings assigned to the series 2006-C7 certificates will not be withdrawn, qualified or downgraded and/or the satisfaction of certain conditions, any related mortgaged real property, or any direct controlling interest in the borrower is directly encumbered in connection with subordinate financing. Subject to certain identified exceptions, the representing party has not consented to such subordinate financing. To the representing party’s knowledge, subject to certain identified exceptions, the related mortgaged real property is not encumbered in connection with subordinate financing and none of the direct controlling equity holders in the related borrower have incurred debt secured by such interest in the related borrower.
•  Subject to certain identified exceptions, and except with respect to transfers of certain non-controlling and/or minority interests in the related borrower as specified in the related mortgage loan documents or with respect to transfers of interests in the related borrower between affiliates, principals and/or immediate family members and with respect to transfers by devise, by descent or by operation of law or otherwise upon the death or incapacity of a person having an interest in the related borrower, the mortgage loan documents contains provisions for the acceleration of the mortgage loan if any related mortgaged real property or interest therein is directly or indirectly transferred or sold without the prior written consent of the lender, rating agency confirmation, or the satisfaction of certain conditions.
•  Subject to certain identified exceptions, none of the material terms of the mortgage loan documents have been waived, modified, altered, satisfied, impaired, canceled, subordinated or rescinded by the mortgage lender, and no material portion of the mortgaged real property has been released from the lien of the related mortgage.

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•  The related mortgage loan documents do not provide for the release from the lien of the mortgage of any material portion of the related mortgaged real property that is necessary to the operation of such mortgaged real property or was given material value in the underwriting of such mortgage loan at origination, without requiring payment of the loan in full, payment of a specified release price, or the delivery of defeasance collateral or acceptable substitute collateral.
•  The borrower has covenanted in the mortgage loan documents to maintain the mortgaged real property in compliance in all material respects with, to the extent it is not grandfathered under, all applicable laws, zoning ordinances, rules, covenants and restrictions affecting the construction, occupancy, use and operation of such mortgaged real property. The representing party has received no notice of any material violation of, to the extent is has not been grandfathered under, such laws, ordinances, rules, covenants and restrictions which is not affirmatively covered by the lender’s title insurance policy.
•  Subject to certain identified exceptions, generally the borrower is obligated by its organizational documents or the related mortgage loan documents or both to be, for the term of the mortgage loan, an entity that is formed or organized solely for the purpose of owning and operating one or more of the mortgaged properties securing such mortgage loan and is prohibited from engaging in any business unrelated to the mortgaged real property, does not have any material assets other than those related to its interest in and operation of the mortgaged real property and may not incur indebtedness other than as permitted by the mortgage loan documents.
•  To the actual knowledge of the representing party, there are no pending actions, suits or proceedings by or before any court or governmental authority against or affecting the borrower or any mortgaged real property the adverse determination of which would materially and adversely affect the value of the mortgaged real property or the ability of the borrower to pay principal, interest or any other amounts due under the mortgage loan.
•  To the actual knowledge of the representing party, the mortgaged real property is not collateral or security for any mortgage loan that is not in the trust, other than a related Non-Trust Loan.
•  None of improvements on the mortgaged real property are located in a flood hazard area as defined by the Federal Insurance Administration, or if any of such improvements are located in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards falling within zones A or V in the national flood insurance program, the borrower is required to maintain flood insurance.
•  One or more engineering assessments, or assessment updates, were performed with respect to the mortgaged real property during the 12-month period preceding the cut-off date and, to the extent the assessments revealed material deficiencies or deferred maintenance the related loan documents provide for reserves, escrows or other security and/or require the borrower to effect repairs.
•  The borrower has represented in the mortgage loan documents that all material licenses, permits and authorizations then required for use of the related mortgaged real property by such borrower, the related lessee, franchisor or operator were issued and were then valid and in full force and effect.
•  Subject to certain identified exceptions, if the mortgage loan is secured in whole or in material part by the interest of the borrower as a lessee under a ground lease but not by the fee interest in that property, then, subject to certain identified exceptions: (a) the ground lease or a memorandum thereof has been recorded; (b) all lessor consents required for the operation of the leasehold mortgage have been or will be obtained; (c) upon a foreclosure of the leasehold mortgage, the ground lease can be assigned to the lender; (d) the ground lease cannot be modified without the lender’s consent; (e) the ground lease is in full force and effect; (f) to the actual knowledge of the representing party, there are no current material defaults under the ground lease; (g) the ground lease—or an estoppel or consent letter—requires notices of default to be delivered to the lender; (h) the lender can enter a new ground lease if the current ground lease is terminated, provided the lender cures any then-existing defaults; (i) the lender will have an opportunity to cure lessee defaults; (j) the ground lease has a current term—including options—which exceeds the mortgage loan maturity date.
•  If the mortgage loan is secured by the interest of the related borrower under a ground lease and also by the fee interest in the same property, then the fee mortgage is a first lien on such fee interest, subject only to Permitted Encumbrances.
•  The mortgaged real property currently does, or, within a time period specified in the mortgage loan documents, constitutes, or will constitute one or more complete separate tax lots.

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•  If the mortgage loan permits defeasance, the mortgage loan documents require the borrower to pay all reasonable costs associated with the defeasance thereof, and provide either that the lender consent in advance, the borrower comply with the requirements set forth therein for defeasance, or defeasance not occur prior to the second anniversary of the Issue Date and then with defeasance collateral consisting of Government Securities sufficient to make all scheduled payments under the mortgage note or, for a partial defeasance, to make all scheduled payments under the mortgage note equal to at least 100% of the allocated loan amount for the portion of the mortgaged real property being released.
•  As of origination, the mortgaged real property is free and clear of mechanics’ and materialmen’s liens that are not bonded, insured against or escrowed for, and no claims exist that under law could give rise to any such lien that would be prior or equal to the lien of the mortgage unless affirmatively covered by the lender’s title insurance policy in any jurisdiction where such coverage is available.

The foregoing representations and warranties are subject to certain exceptions, including, without limitation, any conflicting disclosure contained in this prospectus supplement.

If, as provided in the series 2006-C7 pooling and servicing agreement—

•  there exists a breach of any of the above-described representations and warranties made by us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller,
•  we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, are notified of the breach, and
•  either (a) we, in the case of a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, in the case of a UBS Mortgage Loan, and the KeyBank Mortgage Loan Seller, in the case of a KeyBank Mortgage Loan, agree that, or (b) an arbitration panel makes a binding determination that, in the case of (a) or (b), such breach materially and adversely affects the value of the subject underlying mortgage loan, such material and adverse effect to be determined (i) with respect to any notice of a breach that is delivered within the 24-month period following the Issue Date, as of the pricing date for the series 2006-C7 certificates, and (ii) with respect to any notice of a breach that is delivered subsequent to the 24-month period following the Issue Date, as of the date of such notice,

then that breach will be a ‘‘Material Breach’’ as to which the trust will have the rights against us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, that are described under ‘‘—Cures and Repurchases’’ below.

Cures and Repurchases

If there exists a Material Breach of any of the representations and warranties made by us with respect to any of the Lehman Mortgage Loans, by the UBS Mortgage Loan Seller with respect to any of the UBS Mortgage Loans or by the KeyBank Mortgage Loan Seller with respect to any of the KeyBank Mortgage Loans, as discussed under ‘‘—Representations and Warranties’’ above, or if there exists a Material Document Omission with respect to any Lehman Mortgage Loan, UBS Mortgage Loan or KeyBank Mortgage Loan, as discussed under ‘‘—Assignment of the Underlying Mortgage Loans’’ above, then we, in the case of a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, in the case of a UBS Mortgage Loan, and the KeyBank Mortgage Loan Seller, in the case of a KeyBank Mortgage Loan, will be required either:

•  to cure that Material Breach or Material Document Omission, as the case may be, in all material respects,
•  at our option (in the case of a Lehman Mortgage Loan) or at the option of the UBS Mortgage Loan Seller (in the case of a UBS Mortgage Loan) or at the option of the KeyBank Mortgage Loan Seller (in the case of a KeyBank Mortgage Loan), in the event such party determines that such Material Breach or Material Document Omission cannot be cured, to pay an amount (which would be held in a reserve fund and applied to any losses on and expenses related to the subject underlying mortgage loan) equal to the loss of value directly attributed to such Material Breach or Material Document Omission, provided that there can be no assurance that any such loss of value payment will, in fact, cover the amount of actual losses and expenses incurred by the trust in connection with the subject underlying mortgage loan, including unpaid special servicing compensation and other related costs and expenses, and provided, further, that the foregoing loss of value payment option will not be available if 95% or more of all of the loss of value of the subject underlying mortgage loan was caused by the subject Material Breach or Material Document Omission, as applicable, and the subject Material Breach or Material Document Omission is not capable of being cured, or
•  to repurchase the affected mortgage loan at a price generally equal to the sum of—

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1.  the unpaid principal balance of that mortgage loan at the time of purchase, plus
2.  all unpaid interest, other than Post-ARD Additional Interest and Default Interest, due with respect to that mortgage loan pursuant to the related loan documents through the due date in the collection period of purchase, plus
3.  all unreimbursed servicing advances made under the series 2006-C7 pooling and servicing agreement with respect to that mortgage loan, plus
4.  all unpaid interest accrued on advances made under the series 2006-C7 pooling and servicing agreement with respect to that mortgage loan, plus
5.  subject to certain limitations, to the extent not otherwise covered by clause 4. of this bullet, all unpaid special servicing fees and other Additional Trust Fund Expenses related to that mortgage loan (including any liquidation fee, if payable under the series 2006-C7 pooling and servicing agreement).

The time period within which we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, must complete that cure or repurchase will generally be limited to either (a) 90 days following the date on which we, in the case of a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, in the case of a UBS Mortgage Loan, or the KeyBank Mortgage Loan Seller, in the case of a KeyBank Mortgage Loan, as the case may be, agree that, or (b) 60 days after an arbitration panel makes a binding determination that, in the case of (a) or (b), as applicable, a Material Breach or a Material Document Omission, as the case may be, exists. However, if the responsible party is diligently attempting to correct the problem, then, with limited exception, it will be entitled to as much as an additional 90 days (in the case of clause (a) above in this paragraph) or 45 days (in the case of clause (b) above in this paragraph), or more in the case of a Material Document Omission resulting from the failure of the responsible party to have received the recorded documents, to complete that cure or repurchase.

If a Material Breach or a Material Document Omission exists with respect to any underlying mortgage loan that is cross-collateralized with one or more other mortgage loans in the trust, if the cross-collateralization can be terminated without any adverse tax consequence for the trust, and if the series 2006-C7 controlling class representative so consents, then we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, will be permitted, subject to specified conditions, to repurchase only the affected mortgage loan. Otherwise, the entire cross-collateralized group will be treated as a single mortgage loan for purposes of—

•  determining whether the subject breach or document omission materially and adversely affects the value of that cross-collateralized group, and
•  the application of remedies.

The cure/payment/repurchase obligations of us, the UBS Mortgage Loan Seller and the KeyBank Mortgage Loan Seller described above will constitute the sole remedies available to the series 2006-C7 certificateholders in connection with a Material Breach or a Material Document Omission with respect to any mortgage loan in the trust.

In connection with the enforcement of any cure/payment/repurchase obligations of us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, relating to a Material Breach or a Material Document Omission with respect to any mortgage loan in the trust, the parties to the series 2006-C7 pooling and servicing agreement and/or the applicable mortgage loan purchase agreement have agreed that any claims with respect thereto are to be resolved through non-binding mediation and, if an agreement with respect to the subject Material Breach or a Material Document Omission is not reached through non-binding mediation after a period of approximately 90 days following the commencement thereof, then through a binding arbitration proceeding conducted in accordance with the terms of the pooling and servicing agreement, the applicable mortgage loan purchase agreement and the American Arbitration Association Rules for Large Complex Disputes. We, the UBS Mortgage Loan Seller and the KeyBank Mortgage Loan Seller, as applicable, and the other parties to the series 2006-C7 pooling and servicing agreement and/or the applicable mortgage loan purchase agreement have waived the right to resolve any claim related to the enforcement of any cure/payment/repurchase obligations of us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as applicable, in connection with a Material Breach or a Material Document Omission through the judicial process.

Further, no other person will be obligated to cure, pay loss of value or repurchase any affected mortgage loan in connection with, or otherwise address, a Material Breach or a Material Document Omission, if we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, as the case may be, default on our obligations to do so. There can be no

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assurance that we, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller will have sufficient assets to cure, pay the loss of value or repurchase a mortgage loan if required to do so.

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 underlying mortgage loans on or before the cut-off date. Prior to the Issue Date, 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 Issue Date, 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 underlying 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 copy of the series 2006-C7 pooling and servicing agreement, including the exhibits thereto, will be filed with the SEC as an exhibit to a current report on Form 8-K under the Exchange Act, following the Issue Date. If mortgage loans are removed from or added to the mortgage pool and investors were not otherwise informed, then that removal or addition will be noted in that current report on Form 8-K. In addition, if and to the extent that any material terms of the series 2006-C7 pooling and servicing agreement or the exhibits thereto have not been disclosed in this prospectus supplement, then the series 2006-C7 pooling and servicing agreement, together with such exhibits, will be filed with the SEC as an exhibit to a current report on Form 8-K on the Issue Date. The SEC will make those current reports on Form 8-K and its exhibits available to the public for inspection. See ‘‘Available Information’’ in the accompanying base prospectus.

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TRANSACTION PARTICIPANTS

The Issuing Entity

The issuing entity with respect to the series 2006-C7 certificates will be the LB-UBS Commercial Mortgage Trust 2006-C7, a common law trust created under the laws of the State of New York pursuant to the series 2006-C7 pooling and servicing agreement. LB-UBS Commercial Mortgage Trust 2006-C7 is sometimes referred to in this prospectus supplement as the ‘‘trust’’ or the ‘‘trust fund.’’ We will transfer the underlying mortgage loans to the issuing entity in exchange for the series 2006-C7 certificates being issued to us or at our direction.

The trust’s activities will be limited to the transactions and activities entered into in connection with the securitization described in this prospectus supplement, and except for those activities, the trust will not be authorized and will have no power to borrow money or issue debt, merge with another entity, reorganize, liquidate or sell assets or engage in any business or activities. Consequently, the trust will not be permitted to hold any assets, or incur any liabilities, other than those described in this prospectus supplement. Because the trust will be created pursuant to the series 2006-C7 pooling and servicing agreement, the trust and its permissible activities can only be amended or modified by amending the series 2006-C7 pooling and servicing agreement. See ‘‘Description of the Governing Documents—Amendment’’ in the accompanying base prospectus. The fiscal year end of the trust will be December 31.

The trust will not have any directors, officers or employees. The trustee, the master servicer and the special servicer will be responsible for administration of the trust assets, in each case to the extent of its duties expressly set forth in the series 2006-C7 pooling and servicing agreement. Those parties may perform their respective duties directly or through sub-servicers and/or agents.

Because the issuing entity is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a ‘‘business trust’’ for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the trust would be characterized as a ‘‘business trust.’’

The Depositor

The depositor is Structured Asset Securities Corporation II, a Delaware corporation and a wholly owned, direct subsidiary of Lehman Commercial Paper Inc. Lehman Commercial Paper Inc. is a wholly-owned, direct subsidiary of Lehman Brothers Inc., which is a wholly owned, direct subsidiary of Lehman Brothers Holdings Inc. The depositor’s principal executive offices are located at 745 Seventh Avenue, New York, New York 10019. The depositor is only engaged in the securitization of commercial and multifamily mortgage loans and has been since it was organized in October 2002. See ‘‘The Depositor’’ in the accompanying base prospectus.

The Sponsors

Lehman Brothers Holdings Inc.    Lehman Brothers Holdings Inc. will act as co-sponsor of the series 2006-C7 transaction. Lehman Brothers Holdings Inc., a Delaware corporation (‘‘LBHI’’), was founded in 1850 and its executive offices are located at 745 Seventh Avenue, New York, New York 10019, U.S.A.

LBHI, together with its affiliates, engages in mortgage- and asset-backed securitizations and other structured financing arrangements. LBHI has been engaged in the securitization of assets since 1987 and in the securitization of multifamily and commercial mortgage loans since 1991. LBHI and its affiliates securitized approximately (a) $9.0 billion of multifamily and commercial mortgage loans during fiscal year 2003, (b) $9.7 billion of multifamily and commercial mortgage loans during fiscal year 2004, and (c) $11.4 billion of commercial mortgage loans during fiscal year 2005.

LBHI and its affiliates, directly or through correspondents, also originate multifamily and commercial mortgage loans throughout the United States and abroad and have been engaged in the origination of commercial mortgage loans since 1994. Most of the multifamily and commercial mortgage loans included in commercial mortgage securitizations sponsored by LBHI and its affiliates have been originated, directly or through correspondents, by LBHI or an affiliate.

For further information about LBHI and its affiliates, the general character if its business, its securitization program and a general discussion of LBHI’s procedures for originating or acquiring and securitizing commercial and multifamily mortgage loans, see ‘‘The Sponsor’’ in the accompanying base prospectus.

UBS Real Estate Investments Inc.    UBS Real Estate Investments Inc. will also act as co-sponsor of the series 2006-C7 transaction. UBS Real Estate Investments Inc., a Delaware corporation (‘‘UBSREI’’), has its executive offices located at 1251 Avenue of the Americas, 22nd Floor, New York, New York 10020, U.S.A. UBSREI’s predecessor entity was founded in 1994.

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General Character of UBSREI’s Business.    UBSREI, together with its affiliates, engages in real estate acquisitions and finance, including mortgage-backed securitizations and other structured financing arrangements. UBSREI originates and purchases commercial and multifamily mortgage loans, some of which are originated or purchased primarily for securitization or resale. UBSREI has been an active participant in securitizations of commercial mortgage loans with Lehman Brothers since 2000. UBSREI securitized approximately (a) $2.9 billion of fixed rate commercial mortgage loans in the LB-UBS program during fiscal year 2003, (b) $2.7 billion of fixed rate commercial mortgage loans in the LB-UBS program during fiscal year 2004, and (c) in excess of $4.0 billion of fixed rate commercial mortgage loans in the LB-UBS program during fiscal year 2005 and to date. The statistics set forth in (a), (b) and (c) of the previous sentence do not include whole loan sales or stand-alone securitizations outside the LB-UBS program. In addition to its securitization program with Lehman Brothers, UBSREI acquires commercial real estate and originates fixed and floating rate mortgage loans and mezzanine loans to be held in a portfolio. Most of the commercial mortgage loans included in commercial mortgage securitizations sponsored by UBSREI and its affiliates have been originated by UBSREI, directly or through correspondents.

UBSREI is an indirect subsidiary of UBS AG. UBS AG provides global financing services to corporations, governments and municipalities, institutional clients and individuals worldwide. UBS AG provides a full array of equities and fixed income sales, trading and research, investment banking services and investment management and advisory services. Its has global headquarters in Switzerland, regional headquarters in New York and London, and offices in additional locations throughout the world.

UBSREI’s Securitization Program.    UBSREI engages in mortgage securitizations and other structured financing arrangements. UBSREI has been an active participant in securitizations of commercial mortgage loans with Lehman Brothers since 2000.

UBSREI and its affiliates, directly or through correspondents, also originate multifamily and commercial mortgage loans throughout the United States and abroad. UBSREI, its affiliates and its predecessor entity have been engaged in the origination of commercial mortgage loans since 1994. The commercial mortgage loans originated and securitized by UBSREI and its affiliates include both small balance and large balance fixed-rate and floating-rate loans. Most of the more recent commercial mortgage loans included in commercial mortgage securitizations sponsored by UBSREI and its affiliates have been originated by UBSREI, directly or through correspondents.

In addition, in the normal course of its securitization program, UBSREI and its affiliates, may also acquire mortgage assets from various third party originators. These mortgage loans may have been originated using underwriting guidelines not established by UBSREI or any of its affiliates. The related trust fund may include mortgage loans originated by one or more of these third parties.

UBSREI and its affiliates may also originate mortgage loans in conjunction with third-party correspondents and, in those cases, the third-party correspondents would perform the underwriting based on certain criteria established or reviewed by UBSREI, and UBSREI or an affiliate would originate the subject mortgage loan on a specified closing date prior to inclusion in the subject securitization.

In connection with its commercial mortgage securitization transactions, UBSREI or an affiliate generally transfers the mortgage assets to the depositor, who then transfers such assets to the issuing entity for the related securitization. In return for the transfer of the mortgage assets by the depositor to the issuing entity, the issuing entity issues commercial mortgage pass-through certificates backed by, and supported by the cash flows generated by, those mortgage assets.

Pursuant to a mortgage loan purchase agreement, UBSREI will make certain representations and warranties, subject to certain exceptions set forth therein, to the depositor and will covenant to provide certain documents regarding the mortgage loans for which it acts as mortgage loan seller and, in connection with certain breaches thereof or certain defects with respect thereto, which breaches or defects are determined to have a material adverse effect on the value of the subject mortgage asset or such other standard as is described in the related mortgage loan purchase agreement, may have an obligation to repurchase such mortgage asset from the depositor, cure the subject defect or breach or pay a loss of value amount with respect to the subject defect or breach, as the case may be. See ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans,’’ ‘‘—Representations and Warranties’’ and ‘‘—Cures and Repurchases’’ in this prospectus supplement.

Underwriting Standards.    Set forth below is a discussion of certain general underwriting guidelines of UBSREI with respect to multifamily and commercial mortgage loans originated by UBSREI. In the case of a multifamily or commercial mortgage loan originated by UBSREI through a correspondent, that correspondent generally collects certain relevant information for analysis by UBSREI, and assists in the origination of the subject mortgage loan on documents approved by UBSREI. The underwriting guidelines described below generally do not apply to mortgage loans acquired by UBSREI or its affiliates from third-party originators.

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Notwithstanding the discussion below, given the unique nature of commercial mortgage properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship, performance history and/or other factors. Consequently, there can be no assurance that the underwriting of any particular commercial or multifamily mortgage loan will conform to the general guidelines described in this ‘‘—Underwriting Standards’’ section.

A.    Loan Analysis:    UBSREI generally performs both a credit analysis and a collateral analysis with respect to each multifamily and commercial mortgage loan. The credit analysis of the borrower generally includes a review of third-party credit reports or judgment, lien, bankruptcy and pending litigation searches. Generally, borrowers are required to be single-purpose entities, although exceptions are made, particularly with respect to mortgage loans that are in the amount of $15,000,000 or less. The collateral analysis generally includes an analysis, in each case to the extent available and applicable, of the historical property operating statements, rent rolls and a review of certain significant tenant leases. UBSREI’s credit underwriting also generally includes a review of third-party appraisals, as well as environmental reports, building condition reports and seismic reports, if applicable.

B.    Loan Approval:     Prior to commitment, all multifamily and commercial mortgage loans to be originated by UBSREI must be approved by a loan committee which includes senior personnel from UBSREI or its affiliates. The committee may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.

C.    Debt Service Coverage Ratio:    UBSREI’s underwriting includes a calculation of the Debt Service Coverage Ratio (the ‘‘DSCR’’) in connection with the origination of a loan. The DSCR will generally be calculated based on the underwritten net cash flow from the property in question as determined by UBSREI and payments on the loan based on actual principal and/or interest due on the loan.

However, underwritten net cash flow 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 collateral.

For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, UBSREI may utilize annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy, including, without limitation, one or more of the following:

•  the assumption that a particular tenant at the subject mortgaged real property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged real property or is out for signature will be executed and the related tenant will take occupancy and commence paying rent on a future date;
•  the assumption that a portion of the currently vacant and unleased space at the subject mortgaged real property will be leased at current market rates to tenants that will take occupancy and commence paying rent;
•  the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged real property; and
•  various additional lease-up assumptions and other assumptions regarding the payment of rent not currently being paid.

There is no assurance that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance.

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D.    Loan-to-Value Ratio:    UBSREI’s underwriting also generally includes a calculation of the loan-to-value ratio of a prospective multifamily or commercial mortgage loan in connection with the origination of the mortgage loan. 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 or pari passu loans that are secured by the related real property collateral, to
•  the estimated value of the related real property collateral based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation.

E.    Additional Debt:    Certain mortgage loans may have or permit in the future certain additional subordinate debt, whether secured or unsecured. It is possible that UBSREI will be the lender on that additional debt.

The debt service coverage ratios described above under ‘‘—Debt Service Coverage Ratio’’ may be lower based on the inclusion of the payments related to such additional debt and the loan-to-value ratios described under ‘‘—Loan-to-Value Ratio’’ may be higher based on the inclusion of the amount of any such additional debt.

F.    Assessments of Property Condition:    As part of the underwriting process, UBSREI will obtain the property assessments and reports described below.

(1)  Appraisals:    UBSREI will generally require independent appraisals or an update of an independent appraisal in connection with the origination of each mortgage loan that meet the requirements of the ‘‘Uniform Standards of Professional Appraisal Practice’’ as adopted by the Appraisal Standards Board of the Appraisal Foundation, or the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. In some cases, however, UBSREI may establish the value of the subject real property collateral based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
(2)  Environmental Assessment:    UBSREI will, in most cases, require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, UBSREI may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, UBSREI might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water will usually be conducted only at multifamily rental properties and only when UBSREI or the environmental consultant believes that such an analysis is warranted under the circumstances.

Depending on the findings of the initial environmental assessment, UBSREI may require additional environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral, an environmental insurance policy or a guaranty with respect to environmental matters.

(3)  Engineering Assessment:    In connection with the origination process, UBSREI will, in most cases, require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, UBSREI will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.
(4)  Seismic Report:    If the subject real property collateral includes any material improvements and is located in California or in seismic zones 3 or 4, UBSREI may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, UBSREI may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price. It should be noted, however, that because the seismic assessments may not necessarily have used the same assumptions in assessing probable maximum loss, it is possible that some of the real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.

G.    Zoning and Building Code Compliance:    In connection with the origination of a multifamily or commercial mortgage loan, UBSREI will generally examine whether the use and occupancy of the related real property collateral is in

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material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.

H.    Escrow Requirements:    Based on its analysis of the real property collateral, the borrower and the principals of the borrower, UBSREI may require a borrower under a multifamily or commercial mortgage loan to fund various escrows for taxes and/or insurance, capital expenses, replacement reserves and/or environmental remediation. UBSREI conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by UBSREI. Furthermore, UBSREI may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed.

Notwithstanding the foregoing discussion under this ‘‘—Underwriting Standards’’ section, the depositor may purchase mortgage loans for inclusion in a trust fund which vary from, or do not comply with, UBSREI’s underwriting guidelines. In addition, in some cases, UBSREI and/or its affiliates may not have strictly applied these underwriting guidelines as the result of a case by case permitted exception based upon other compensating factors.

KeyBank National Association.    KeyBank National Association (‘‘KeyBank’’) is a co-sponsor of the series 2006-C7 transaction and is one of the mortgage loan sellers. KeyBank is the seller of 39 of the underlying mortgage loans, with an aggregate cut-off date principal balance of $385,237,134, all of which loans were underwritten and originated by KeyBank.

KeyBank is a national banking association that is a wholly-owned subsidiary of KeyCorp (NYSE: KEY). KeyBank is the parent of KeyCorp Real Estate Capital Markets, Inc., a primary servicer, and is an affiliate of McDonald Investments Inc., one of the underwriters. KeyBank maintains its primary offices at Key Tower, 127 Public Square, Cleveland, Ohio 44114, and its telephone number is (216) 689-6300. KeyBank has approximately 950 banking centers located in 13 states. As of September 30, 2006, KeyBank had total assets of approximately $91.772 billion, total liabilities (including minority interest in consolidated subsidiaries) of approximately $84.771 billion and approximately $7.001 billion in stockholder’s equity.

KeyBank provides financial services, including commercial real estate financing, throughout the United States. In 2005, KeyBank’s Real Estate Capital Group originated a total of $16.6 billion in construction, development, permanent and private equity loans from 32 offices nationwide. Of this total, $2.7 billion was originated for sale through commercial mortgage-backed securities (CMBS) transactions, acquisition by Fannie Mae or Freddie Mac, or sale to life insurance companies and pension funds.

KeyBank began selling commercial mortgage loans into CMBS transactions in 2000. KeyBank’s commercial mortgage loans that are originated for sale into a CMBS transaction (or through a sale of whole loan interests to third party investors) are generally fixed rate and are secured primarily by retail, office, multifamily, industrial, self-storage, and hospitality properties. As of December 31, 2005, KeyBank had originated approximately $6.3 billion of commercial mortgage loans that have been securitized in 28 securitization transactions. The following table sets forth information for the past three years regarding the amount of commercial mortgage loans that KeyBank (i) originated for the purposes of securitization in CMBS transactions and (ii) actually securitized in CMBS transactions (which amounts include mortgage loans that were originated or purchased by KeyBank).


Year Loans
Originated		 Loans
Securitized
2005 (in billions) $ 1.385
$ 1.323
2004 (in billions) $ 1.213
$ 1.099
2003 (in billions) $ 1.057
$ 1.062

Generally, KeyBank originates the commercial mortgage loans that it contributes to CMBS transactions. However, if KeyBank purchases mortgage loans from third-party originators (which mortgage loans may have been originated using underwriting guidelines not established by KeyBank), KeyBank re-underwrites those mortgage loans and performs other procedures to ascertain the quality of those mortgage loans, which procedures are subject to approval by a credit officer of KeyBank.

KeyBank originates commercial mortgage loans and, together with other sponsors or loan sellers, participates in a securitization by transferring the mortgage loans to an unaffiliated securitization depositor, which then transfers the mortgage loans to the issuing entity for the related securitization. KeyBank initially selects the mortgage loans that it will contribute to the securitization, but it has no input on the mortgage loans contributed by other sponsors or loan sellers. KeyBank

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generally participates in securitizations with multiple mortgage loan sellers and an unaffiliated depositor. KeyBank’s wholly-owned subsidiary, KeyCorp Real Estate Capital Markets, Inc., acts as the primary servicer of KeyBank’s commercial mortgage loans that are securitized and, in most cases, acts as a master servicer for securitizations in which KeyBank participates. Other than the securitization of commercial mortgage loans, KeyBank securitizes federal and private student loans that it originates or purchases from third parties.

Pursuant to a mortgage loan purchase agreement, KeyBank will make certain representations and warranties, subject to certain exceptions set forth therein, to the depositor and will covenant to provide certain documents regarding the mortgage loans for which it acts as mortgage loan seller and, in connection with certain breaches thereof or certain defects with respect thereto, which breaches or defects are determined to have a material adverse effect on the value of the subject mortgage asset or such other standard as is described in the related mortgage loan purchase agreement, may have an obligation to repurchase such mortgage asset from the depositor, cure the subject defect or breach or pay a loss of value amount with respect to the subject defect or breach, as the case may be. See ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans,’’ ‘‘—Representations and Warranties’’ and ‘‘—Cures and Repurchases’’ in this prospectus supplement.

KeyBank’s Underwriting Standards.    Set forth below is a general discussion of certain of KeyBank’s underwriting guidelines for originating commercial mortgage loans. KeyBank also generally applies these underwriting guidelines when it re-underwrites commercial mortgage loans acquired from third-party originators. KeyBank generally does not outsource to third parties any credit underwriting decisions or originating duties other than those services performed by providers of environmental, engineering and appraisal reports and other related consulting services.

The underwriting and origination procedures and credit analysis described below may vary from one commercial mortgage loan to another based on the unique circumstances of the related commercial property (including its type, current use, size, location, market conditions, tenants and leases, performance history and/or other factors), and KeyBank may, on a case-by-case basis, permit exceptions to its underwriting guidelines based upon other compensating factors. Consequently, there can be no assurance that the underwriting of any particular underlying mortgage loan sold into this transaction by KeyBank strictly conformed to the general guidelines described in this ‘‘—KeyBank’s Underwriting Standards’’ section.

A.    Loan Analysis:    KeyBank generally performs both a credit analysis and a collateral analysis for each commercial mortgage loan as well as a site inspection of the related real property collateral. The credit analysis of the borrower generally includes a review of third-party credit reports and/or judgment, lien, bankruptcy and pending litigation searches as well as searches to determine OFAC and PATRIOT Act compliance. Generally, borrowers of loans greater than $4.0 million are required to be special-purpose entities, although exceptions are made on a case-by-case basis. The collateral analysis generally includes an analysis, in each case to the extent available and applicable, of the historical property operating statements, rent rolls and a review of certain significant tenant leases. KeyBank’s credit underwriting also generally includes a review of third-party appraisals, as well as environmental reports, property condition reports and seismic reports, if applicable.

B.    Loan Approval:    Prior to commitment, all commercial mortgage loans to be originated or purchased by KeyBank must be approved by a dedicated credit officer of KeyBank. The credit officer may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.

C.    Debt Service Coverage Ratio and Loan-to-Value Ratio:    KeyBank’s underwriting includes a calculation of the debt service coverage ratio (‘‘DSCR’’) in connection with the origination of a commercial mortgage loan. The DSCR will generally be calculated based on the underwritten net cash flow from the subject property as determined by KeyBank and payments on the mortgage loan based on actual principal and/or interest due on the mortgage loan. However, underwritten net cash flow is a subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral, and there is no assurance that those assumptions or adjustments will, in fact, be consistent with actual property performance. KeyBank’s underwriting also generally includes a calculation of the loan-to-value ratio of a prospective commercial mortgage loan in connection with its origination. In general, the loan-to-value ratio of a commercial mortgage loan at any given time is the ratio, expressed as a percentage, of (i) the then outstanding principal balance of the mortgage loan, to (ii) the estimated value of the related real property collateral based on an appraisal. See also the definition of ‘‘U/W Net Cash Flow’’ in the glossary to this prospectus supplement and Annex A-1 to this prospectus supplement.

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D.    Property Assessments:    As part of its underwriting process, KeyBank will obtain the following property assessments.

(1)  Appraisals:    KeyBank will require independent appraisals in connection with the origination of each commercial mortgage loan that meet the requirements of the ‘‘Uniform Standards of Professional Appraisal Practice’’ as adopted by the Appraisal Standards Board of the Appraisal Foundation and the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
(2)  Environmental Assessment:    KeyBank will require a Phase I environmental assessment with respect to the real property collateral for a prospective commercial mortgage loan. However, when circumstances warrant, KeyBank may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Depending on the findings of the initial environmental assessment, KeyBank may require additional environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral, an environmental insurance policy or a guaranty with respect to environmental matters.
(3)  Property Condition Assessment:    KeyBank will require that an engineering firm inspect the real property collateral for any prospective commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, KeyBank will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.
(4)  Seismic Report: If the subject real property collateral includes any material improvements and is located in California or in seismic zones 3 or 4, KeyBank may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, KeyBank may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price.

G.    Zoning and Building Code Compliance:    KeyBank will generally examine whether the use and occupancy of the subject real property collateral securing a commercial mortgage loan is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering, appraisal or consulting reports; and/or representations by the related borrower.

H.    Escrow Requirements:    Based on its analysis of the real property collateral, the borrower and the principals of the borrower, KeyBank may require a borrower under a commercial mortgage loan to fund various escrows for taxes and/or insurance, capital expenses, replacement reserves, potential re-tenanting expenses and/or environmental remediation. KeyBank conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by KeyBank. Furthermore, KeyBank may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed.

Notwithstanding the foregoing discussion under this ‘‘—KeyBank’s Underwriting Standards’’ section, the depositor may purchase underlying mortgage loans for inclusion in the trust fund that vary from, or do not comply with, KeyBank’s underwriting guidelines.

Mortgage Loan Sellers

LBHI, or an affiliate thereof, UBSREI and KeyBank are the mortgage loan sellers for the series 2006-C7 securitization transaction. LBHI is our affiliate and an affiliate of Lehman Brothers Inc., one of the underwriters, UBSREI is an affiliate of UBS Global Asset Management (US) Inc., one of the underwriters, KeyBank is the parent of KRECM, a primary servicer and an affiliate of McDonald Investments Inc., one of the underwriters. See ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans’’ for further information on our acquisition of the underlying mortgage loans.

The Servicers

General.    The parties primarily responsible for servicing the underlying mortgage loans include the master servicer and the special servicer. The obligations of the master servicer and the special servicer are set forth in the series 2006-C7 pooling and servicing agreement, and are described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement’’ in this prospectus

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supplement and ‘‘Description of the Governing Documents’’ in the accompanying base prospectus. In addition, as permitted under the series 2006-C7 pooling and servicing agreement, the master servicer and/or special servicer may delegate their respective servicing obligations to one or more sub-servicers. With respect to most of the underlying mortgage loans, the master servicer is responsible for master servicing and primary servicing functions and the special servicer is responsible for special servicing functions. However, with respect to certain underlying mortgage loans or groups of underlying mortgage loans, including all the KeyBank Mortgage Loans, the master servicer has engaged or will engage a sub-servicer, and the master servicer will be responsible for overseeing the obligations of the related sub-servicer and aggregating relating collections and reports with the remaining mortgage pool. See ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Sub-Servicers’’ in this prospectus supplement.

The Initial Master Servicer.

Wachovia Bank, National Association (‘‘Wachovia’’) will be the master servicer under the series 2006-C7 pooling and servicing agreement. Wachovia is a national banking association organized under the laws of the United States of America and is a wholly owned subsidiary of Wachovia Corporation. Wachovia’s principal servicing offices are located at NC 1075, 8739 Research Drive URP4, Charlotte, North Carolina 28262.

Wachovia has been servicing commercial and multifamily mortgage loans in excess of ten years. Wachovia’s primary servicing system runs on EnableUs (formerly known as McCracken) Strategy software, and Wachovia reports to trustees in the CMSA format. The table below sets forth information about Wachovia’s portfolio of master or primary serviced commercial and multifamily mortgage loans as of the dates indicated:


Commercial and Multifamily Mortgage Loans As of
December 31,
2003		 As of
December 31,
2004		 As of
December 31,
2005		 As of
June 30,
2006
By Approximate Number 10,015
15,531
17,641
18,888
By Approximate Aggregate Unpaid Principal
Balance (in Billions)		 $ 88.6
$ 141.3
$ 182.5
$ 207.6

Within this portfolio, as of June 30, 2006, are approximately 16,198 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $174.4 billion related to commercial mortgage-backed securities or commercial real estate collateralized debt obligation securities. In addition to servicing loans related to commercial mortgage-backed securities and commercial real estate collateralized debt obligation securities, Wachovia also services whole loans for itself and a variety of investors. The properties securing loans in Wachovia’s servicing portfolio as of June 30, 2006 were located in all 50 states, the District of Columbia, Guam, Mexico, Virgin Islands and Puerto Rico and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.

Wachovia utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows Wachovia to process mortgage servicing activities including but not limited to: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports.

The table below sets forth information regarding the aggregate amount of principal and interest advances and property protection advances (i) made by Wachovia on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations master serviced by Wachovia and (ii) outstanding as of the dates indicated:


Date Securitized Master
Serviced Portfolio
(UPB) *		 Outstanding Advance
(P&I and PPA) *		 Outstanding Advances
as % of UPB
December 31, 2003 $ 74,461,414,561
$ 84,616,014
0.1%
December 31, 2004 $ 113,159,013,933
$ 129,858,178
0.1%
December 31, 2005 $ 142,222,662,628
$ 164,516,780
0.1%
* ‘‘UPB’’ means unpaid principal balance, ‘‘P&I’’ means principal and interest advances and ‘‘PPA’’ means property protection advances.

Pursuant to an interim servicing agreement between Wachovia and the UBS Mortgage Loan Seller, Wachovia acts as primary servicer with respect to mortgage loans owned by the UBS Mortgage Loan Seller from time to time, including, prior

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to their inclusion in the trust, some or all of the underlying mortgage loans being contributed by the UBS Mortgage Loan Seller. There are currently no outstanding property protection advances made by Wachovia on those underlying mortgage loans being contributed by the UBS Mortgage Loan Seller that were serviced by Wachovia prior to their inclusion in the trust. Pursuant to an interim servicing agreement between Wachovia and the Lehman Mortgage Loan Seller, Wachovia acts as primary servicer with respect to mortgage loans owned by the Lehman Mortgage Loan Seller from time to time, including, prior to their inclusion in the trust, some or all of the underlying mortgage loans being contributed by the Lehman Mortgage Loan Seller. There are currently no outstanding property protection advances made by Wachovia on those underlying mortgage loans being contributed by the Lehman Mortgage Loan Seller that were serviced by Wachovia prior to their inclusion in the trust.

Wachovia is rated by Fitch and S&P as a primary servicer and master servicer. Wachovia’s ratings by each of these agencies is outlined below:


  Fitch S&P
Primary Servicer CPS2+ Strong
Master Servicer CMS2 Strong

The short-term debt ratings of Wachovia are A-1+ by S&P, P-1 by Moody’s, F1+ by Fitch.

Wachovia has developed policies, procedures and controls relating to its servicing functions to maintain compliance with applicable servicing agreements and servicing standards, including procedures for handling delinquent loans during the period prior to the occurrence of a special servicing transfer event. Wachovia’s servicing policies and procedures are updated periodically to keep pace with the changes in the commercial mortgage-backed securities industry and have been generally consistent for the last three years in all material respects. The only significant changes in Wachovia’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. Wachovia may perform any of its obligations under the series 2006-C7 pooling and servicing agreement through one or more third-party vendors, affiliates or subsidiaries. Wachovia may engage third-party vendors to provide technology or process efficiencies. Wachovia monitors its third-party vendors in compliance with its internal procedures and applicable law. Wachovia has entered into contracts with third-party vendors for the following functions:

• monitoring and applying interest rate changes with respect to adjustable rate mortgage loans in accordance with loan documents
• provision of Strategy and Strategy CS software
•  identification, classification, imaging and storage of documents
•  analysis and determination of amounts to be escrowed for payment of taxes and insurance
•  entry of rent roll information and property performance data from operating statements
•  tracking and reporting of flood zone changes
•  tracking, maintenance and payment of rents due under ground leases
•  abstracting of insurance requirements contained in loan documents
•  comparison of insurance certificates to insurance requirements contained in loan documents and reporting of expiration dates and deficiencies, if any
•  abstracting of leasing consent requirements contained in loan documents
•  legal representation
•  assembly of data regarding buyer and seller (borrower) with respect to proposed loan assumptions and preparation of loan assumption package for review by Wachovia
•  maintenance and storage of letters of credit
•  tracking of anticipated repayment dates for loans with such terms
•  reconciliation of deal pricing, tapes and annexes prior to securitization
•  entry of new loan data and document collection

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•  initiation of loan payoff process and provision of payoff quotes
•  printing, imaging and mailing of statements to borrowers
•  performance of property inspections
•  performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes
•  review of financial spreads performed by sub-servicers
•  review of borrower requests for disbursements from reserves for compliance with loan documents, which are submitted to Wachovia for approval
•  performance of UCC searches and filing of UCCs

Wachovia may also enter into agreements with certain firms to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on certain loans. Generally, all amounts received by Wachovia on the underlying mortgage loans are initially deposited into a common clearing account with collections on other mortgage loans serviced by Wachovia and are then allocated and transferred to the appropriate account described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Accounts’’ in this prospectus supplement within the time required by the Series 2006-C7 Pooling and Servicing Agreement. On the day any amount is to be disbursed by Wachovia, that amount is transferred to a common disbursement account prior to disbursement.

Wachovia will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, Wachovia may have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent Wachovia performs custodial functions as the master servicer, documents will be maintained in a manner consistent with the Servicing Standard.

There are no legal proceedings pending against Wachovia, or to which any property of Wachovia is subject, that are material to the series 2006-C7 certificateholders, nor does Wachovia have actual knowledge of any proceedings of this type contemplated by governmental authorities.

The information set forth in this prospectus supplement concerning Wachovia has been provided by it.

Wachovia is also the master servicer under both (a) the series 2006-C1 pooling and servicing agreement, which governs the servicing of the Triangle Town Center Loan Combination, and (b) the series 2006-C6 pooling and servicing agreement, which governs the servicing of the 1211 Avenue of the Americas Loan Combination.

The Initial Special Servicer.

LNR Partners, Inc. (‘‘LNR Partners’’), a Florida corporation and a subsidiary of LNR Property Holdings, Ltd. (‘‘LNR’’), will initially be appointed as special servicer for the mortgage pool. The principal executive offices of LNR Partners are located at 1601 Washington Avenue, Suite 700, Miami Beach, Florida 33139 and its telephone number is (305)-695-5600. LNR through its subsidiaries, affiliates and joint ventures, is involved in the real estate investment, finance and management business and engages principally in:

•  acquiring, developing, repositioning, managing and selling commercial and multifamily residential real estate properties,
•  investing in high-yielding real estate loans, and
•  investing in, and managing as special servicer, unrated and non-investment grade rated commercial mortgaged backed securities (‘‘CMBS’’).

LNR Partners and its affiliates have substantial experience in working out loans and in performing the other obligations of the special servicer as more particularly described in the series 2006-C7 pooling and servicing agreement, including, but not limited to, processing borrower requests for lender consent to assumptions, leases, easements, partial releases and expansion and/or redevelopment of the mortgaged properties. LNR Partners and its affiliates have been engaged in the special servicing of commercial real estate assets for over 13 years. The number of CMBS pools specially serviced by LNR Partners and its affiliates has increased from 46 in December 1998 to 184 as of March 31, 2006. More specifically, LNR Partners (and its predecessors in interest) acted as special servicer with respect to: (a) 84 domestic CMBS pools as of December 31, 2001, with a then current face value in excess of $53 billion; (b) 101 domestic CMBS pools as of

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December 31, 2002, with a then current face value in excess of $67 billion; (c) 113 domestic CMBS pools as of December 31, 2003, with a then current face value in excess of $79 billion; (d) 134 domestic CMBS pools as of December 31, 2004, with a then current face value in excess of $111 billion; (e) 142 domestic CMBS pools as of December 31, 2005, with a then current face value in excess of $148 billion; and (f) 147 domestic CMBS pools as of March 31, 2006, with a then current face value in excess of $160 billion. Additionally, LNR Partners has resolved over $16.7 billion of U.S. commercial and multifamily loans over the past 13 years, including approximately $1.1 billion of U.S. commercial and multifamily mortgage loans during 2001, $1.9 billion of U.S. commercial and multifamily mortgage loans during 2002, $1.5 billion of U.S. commercial and multifamily mortgage loans during 2003, $2.1 billion of U.S. commercial and multifamily mortgage loans during 2004, $2.4 billion of U.S. commercial and multifamily mortgage loans during 2005 and $0.1 billion for the three months ended March 31, 2006.

LNR or one of its affiliates generally seeks investments where it has the right to appoint LNR Partners as the special servicer. LNR Partners and its affiliates have regional offices located across the country in Florida, Georgia, Texas, Massachusetts, North Carolina and California, and in Europe in London, England, Paris, France and Munich, Germany. As of March 31, 2006, LNR Partners had approximately 180 employees responsible for the special servicing of commercial real estate assets. As of March 31, 2006, LNR Partners and its affiliates specially service a portfolio, which included approximately 21,000 assets in the 50 states and in Europe with a then current face value in excess of $189 billion, all of which are commercial real estate assets. Those commercial real estate assets include mortgage loans secured by the same types of income producing properties as secure the mortgage loans backing the series 2006-C7 certificates. Accordingly, the assets of LNR Partners and its affiliates may, depending upon the particular circumstances, including the nature and location of such assets, compete with the mortgaged real properties securing the underlying mortgage loans for tenants, purchasers, financing and so forth. LNR Partners does not service any assets other than commercial real estate assets.

LNR Partners maintains internal and external watch lists, performs monthly calls with master servicers and conducts overall deal surveillance and shadow servicing. LNR Partners has developed distinct strategies and procedures for working with borrowers on problem loans (caused by delinquencies, bankruptcies or other breaches of the loan documents) designed to maximize value from the assets for the benefit of the certificateholders. These strategies and procedures vary on a case by case basis, and include, but are not limited to, liquidation of the underlying collateral, note sales, discounted payoffs, and borrower negotiation or workout in accordance with the applicable servicing standard. Generally, four basic factors are considered by LNR Partners as part of its analysis and determination of what strategies and procedures to utilize in connection with problem loans. They are (i) the condition and type of mortgaged property, (ii) the borrower, (iii) the jurisdiction in which the mortgaged property is located, and (iv) the actual terms, conditions and provisions of the underlying loan documents. After each of these items is evaluated and considered, LNR Partners' strategy is guided by the relevant servicing standard and all relevant provisions of the applicable pooling and servicing agreement pertaining to specially serviced and REO mortgage loans.

LNR Partners has the highest ratings afforded to special servicers by S&P and Fitch, respectively.

There have not been, during the past three years, any material changes to the policies or procedures of LNR Partners in the servicing function it will perform under the series 2006-C7 pooling and servicing agreement for assets of the same type included in this securitization transaction. LNR Partners has not engaged, and currently does not have any plans to engage, any sub-servicers to perform on its behalf any of its duties with respect to this securitization transaction. LNR Partners does not believe that its financial condition will have any adverse effect on the performance of its duties under the series 2006-C7 pooling and servicing agreement and, accordingly, will not have any material impact on the mortgage pool performance or the performance of the series 2006-C7 certificates. Generally, LNR Partners’ servicing functions under pooling and servicing agreements do not include collection on the pool assets, however LNR Partners does maintain certain operating accounts with respect to REO mortgage loans in accordance with the terms of the applicable pooling and servicing agreements and consistent with the servicing standards set forth in each of such pooling and servicing agreements. LNR Partners does not have any material primary advancing obligations with respect to the CMBS pools as to which it acts as special servicer, except with respect to the obligation to make servicing advances only on specially serviced mortgage loans in four commercial mortgage securitization transactions, and the obligation to make advances of delinquent debt service payments on specially serviced mortgage loans in one commercial mortgage securitization transaction. Under certain circumstances, LNR Partners also has the obligation to make servicing advances and advances of delinquent debt service payments with respect to one collateralized debt obligation transaction.

LNR Partners will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, LNR Partners may have custody of certain of such documents as necessary for enforcement

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actions involving particular mortgage loans or otherwise. To the extent that LNR Partners has custody of any such documents, such documents will be maintained in a manner consistent with the Servicing Standard.

No securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer has experienced an event of default as a result of any action or inaction by LNR Partners as special servicer. LNR Partners has not been terminated as servicer in a commercial mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger. In addition, there has been no previous disclosure of material noncompliance with servicing criteria by LNR Partners with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer.

There are, to the actual current knowledge of LNR Partners, no special or unique factors of a material nature involved in special servicing the particular types of assets included in the subject securitization, as compared to the types of assets specially serviced by LNR Partners in other commercial mortgage backed securitization pools generally, for which LNR Partners has developed processes and procedures which materially differ from the processes and procedures employed by LNR Partners in connection with its specially servicing of commercial mortgaged backed securitization pools generally.

There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against LNR Partners or of which any of its property is the subject, that is material to the series 2006-C7 certificateholders.

LNR Partners is not an affiliate of the depositor, any sponsors, the trust, the master servicer, the trustee or any originator of any of the underlying mortgage loans identified in this prospectus supplement or the borrower under any underlying mortgage loan representing 10% or more of the Initial Mortgage Pool Balance.

LNR Securities Holdings, LLC, an affiliate of LNR Partners, will acquire an interest in one or more classes of the series 2006-C7 certificates. Otherwise, except for LNR Partners acting as special servicer for this securitization transaction, there are no specific relationships that are material involving or relating to this securitization transaction or the securitized mortgage loans between LNR Partners or any of its affiliates, on the one hand, and the depositor, sponsor(s) or the trust, on the other hand, that currently exist or that existed during the past two years. In addition, there are no business relationships, agreements, arrangements, transactions or understandings that have been entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party – apart from the subject securitization transaction – between LNR Partners or any of its affiliates, on the one hand, and the depositor, the sponsor(s) or the trust, on the other hand, that currently exist or that existed during the past two years and that are material to an investor’s understanding of the offered certificates.

LNR Partners is also the special servicer under both (a) the series 2006-C1 pooling and servicing agreement, which governs the servicing of the Triangle Town Center Loan Combination, and (b) the series 2006-C6 pooling and servicing agreement, which governs the servicing of the 1211 Avenue of the Americas Loan Combination.

The Initial Primary Servicer of the KeyBank Mortgage Loans.

KeyCorp Real Estate Capital Markets, Inc. (‘‘KRECM’’) will be a primary servicer in respect of 39 of the underlying mortgage loans, with an aggregate cut-off date principal balance of $385,237,134. KRECM is an Ohio corporation that is a wholly-owned subsidiary of KeyBank National Association, one of the mortgage loan sellers and a sponsor, and an affiliate of McDonald Investments Inc., one of the underwriters. KeyBank National Association and McDonald Investments Inc. are both wholly-owned subsidiaries of KeyCorp. KRECM’s maintains servicing offices at 911 Main Street, Suite 1500, Kansas City, Missouri 64105 and 1717 Main Street, Suite 1000, Dallas, Texas 75201.

KRECM has been engaged in the servicing of commercial mortgage loans since 1995 and commercial mortgage loans originated for securitization since 1998. The following table sets forth information about KRECM’s portfolio of master or primary serviced commercial mortgage loans as of the dates indicated.


Loans 12/31/2003 12/31/2004 12/31/2005 3/31/2006
By Approximate Number: 4,468
5,345
11,218
11,156
By Approximate Aggregate Principal Balance
(in billions):		 $ 25.408
$ 34.094
$ 73.692
$ 76.870

Within this servicing portfolio are, as of December 31, 2005, approximately 9,147 loans with a total principal balance of approximately $55.9 billion that are included in approximately 108 commercial mortgage-backed securitization transactions. KRECM’s servicing portfolio includes mortgage loans secured by multifamily, office, retail, hospitality and other types of

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income-producing properties that are located throughout the United States. KRECM also services newly-originated commercial mortgage loans and mortgage loans acquired in the secondary market for issuers of commercial and multifamily mortgage-backed securities, financial institutions and a variety of investors and other third-parties. Based on the aggregate outstanding principal balance of loans being serviced as of December 31, 2005, the Mortgage Bankers Association of America ranked KRECM the fifth largest commercial mortgage loan servicer in terms of total master and primary servicing volume.

KRECM is approved as a master servicer, primary servicer and special servicer for commercial mortgage-backed securities rated by Moody’s, S&P and Fitch. Moody’s does not assign specific ratings to servicers. KRECM is on S&P’s Select Servicer list as a U.S. Commercial Mortgage Master Servicer, and S&P has assigned to KRECM the rating of STRONG as a master servicer, primary servicer and special servicer. Fitch has assigned to KRECM the ratings of CMS1- as a master servicer, CPS1- as a primary servicer and CSS2+ as a special servicer. S&P’s and Fitch’s ratings of a servicer are based on an examination of many factors, including the servicer’s financial condition, management team, organizational structure and operating history.

No securitization transaction involving commercial mortgage loans in which KRECM was acting as primary servicer has experienced a primary servicer event of default as a result of any action or inaction of KRECM as primary servicer, including as a result of KRECM’s failure to comply with the applicable servicing criteria in connection with any securitization transaction.

KRECM’s servicing system utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows KRECM to process mortgage servicing activities including: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports. KRECM generally uses the CMSA format to report to trustees of commercial mortgage-backed securities (CMBS) transactions and maintains a website (www.Key.com\Key2CRE) that provides access to reports and other information to investors in CMBS transactions for which KRECM is a primary servicer.

KRECM will not have primary responsibility for the custody of original documents evidencing the underlying mortgage loans. Rather, the trustee acts as custodian of the original documents evidencing the underlying mortgage loans. But on occasion, KRECM may have custody of certain original documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent KRECM performs custodial functions as the primary servicer, original documents will be maintained in a manner consistent with the Servicing Standard.

KRECM maintains the accounts it uses in connection with servicing commercial mortgage loans with its parent company, KeyBank National Association. The following table sets forth the ratings assigned to KeyBank National Association’s long-term deposits and short-term deposits.


  S&P Fitch Moody’s
Long-Term Deposits: A A A1
Short-Term Deposits: A-1 F1 P-1

KRECM believes that its financial condition will not have any material adverse effect on the performance of its duties under the series 2006-C7 pooling and servicing agreement and, accordingly, will not have any material adverse impact on the mortgage pool performance or the performance of the series 2006-C7 certificates. There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against KRECM or of which any of its property is the subject, that is material to the series 2006-C7 certificateholders.

KRECM has developed policies, procedures and controls for the performance of its primary servicing obligations in compliance with applicable servicing agreements, servicing standards and the servicing criteria set forth in Item 1122 of Regulation AB. These policies, procedures and controls include, among other things, procedures to (i) notify borrowers of payment delinquencies and other loan defaults, (ii) work with borrowers to facilitate collections and performance prior to the occurrence of a servicing transfer event, and (iii) if a servicing transfer event occurs as a result of a delinquency, loss, bankruptcy or other loan default, transfer the subject loan to the special servicer. KRECM’s servicing policies and procedures for the servicing functions it will perform under the series 2006-C7 pooling and servicing agreement for assets of the same type included in the series 2006-C7 securitization transaction are updated periodically to keep pace with the changes in the CMBS industry. For example, KRECM has, in response to changes in federal or state law or investor requirements, (i) made changes in its insurance monitoring and risk-management functions as a result of the Terrorism Risk Insurance Act of 2002 and (ii) established a website where investors and mortgage loan borrowers can access information regarding their investments and mortgage loans. Otherwise, KRECM’s servicing policies and procedures have been generally consistent for the last three years in all material respects.

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KRECM is, as a primary servicer, generally responsible for primary servicing functions with respect to the underlying mortgage loans it is obligated to service under the 2006-C7 pooling and servicing agreement. However, KRECM will be permitted to appoint one or more subservicers to perform all or any portion of its primary servicing functions under the series 2006-C7 pooling and servicing agreement. In addition, KRECM may from time to time perform some of its servicing obligations under the series 2006-C7 pooling and servicing agreement through one or more third-party vendors that provide servicing functions such as tracking and reporting of flood zone changes, performing UCC searches or filing UCC financing statements and amendments.

KRECM will, in accordance with its internal procedures and applicable law, monitor and review the performance of the subservicers that it appoints and any third-party vendors retained by it to perform servicing functions.

KRECM is not an affiliate of the depositor, the sponsors (other than KeyBank), the trust, the master servicer, the special servicer, the trustee, or any originator of any of the underlying mortgage loans identified in this prospectus supplement (other than KeyBank).

The information set forth in this prospectus supplement concerning KRECM has been provided by it. KRECM will make no representations as to the validity or sufficiency of the series 2006-C7 pooling and servicing agreement, the series 2006-C7 certificates, the underlying mortgage loans or this prospectus supplement.

We are not aware of any other sub-servicer that will primary service underlying mortgage loans representing 10% or more of the initial mortgage pool balance or that is affiliated with one of the sponsors.

The Trustee

LaSalle Bank National Association, a national banking association (‘‘LaSalle’’), will act as trustee under the series 2006-C7 pooling and servicing agreement, on behalf of the series 2006-C7 certificateholders. In addition, LaSalle will act as custodian on behalf of the trustee. The trustee’s corporate trust office is located at 135 South LaSalle Street, Suite 1625, Chicago, Illinois, 60603. Attention: Global Securities and Trust Services—LB-UBS Commercial Mortgage Trust 2006-C7 or at such other address as the trustee may designate from time to time.

LaSalle is a national banking association formed under the federal laws of the United States of America. Its parent company, LaSalle Bank Corporation, is an indirect subsidiary of ABN AMRO Bank N.V., a Netherlands banking corporation. LaSalle has extensive experience serving as trustee on securitizations of commercial mortgage loans. Since January 1994, LaSalle has served as trustee or paying agent on over 665 commercial mortgage-backed security transactions involving assets similar to the mortgage loans that we intend to include in the trust. As of September 30, 2006, LaSalle serves as trustee or paying agent on over 450 commercial mortgage-backed security transactions. The long-term unsecured debt of LaSalle is rated ‘‘A+’’ by S&P, ‘‘Aa3’’ by Moody’s and ‘‘AA−’’ by Fitch Ratings.

In its capacity as custodian, LaSalle will hold the mortgage loan files exclusively for the use and benefit of the trust. The custodian will not have any duty or obligation to inspect, review or examine any of the documents, instruments, certificates or other papers relating to the mortgage loans delivered to it to determine that the same are valid. The disposition of the mortgage loan files will be governed by the series 2006-C7 pooling and servicing agreement. LaSalle provides custodial services on over 1,000 residential, commercial and asset-backed securitization transactions and maintains almost 2.5 million custodial files in its two vault locations in Elk Grove, Illinois and Irvine, California. LaSalle’s two vault locations can maintain a total of approximately 6 million custody files. All custody files are segregated and maintained in secure and fire resistant facilities in compliance with customary industry standards. The vault construction complies with Fannie Mae/Ginnie Mae guidelines applicable to document custodians. LaSalle maintains disaster recovery protocols to ensure the preservation of custody files in the event of force majeure and maintains, in full force and effect, such fidelity bonds and/or insurance policies as are customarily maintained by banks which act as custodians. LaSalle uses unique tracking numbers for each custody file to ensure segregation of collateral files and proper filing of the contents therein and accurate file labeling is maintained through a monthly reconciliation process. LaSalle uses a proprietary collateral review system to track and monitor the receipt and movement internally or externally of custody files and any release or reinstatement of collateral.

LaSalle Bank National Association and UBSREI are parties to a custodial agreement whereby LaSalle, for consideration, provides custodial services to UBSREI for certain commercial mortgage loans originated or purchased by it. Pursuant to this custodial agreement, LaSalle is currently providing custodial services for most of the mortgage loans to be sold by UBSREI to the Depositor in connection with this securitization. The terms of the custodial agreement are customary for the commercial mortgage-backed securitization industry providing for the delivery, receipt, review and safekeeping of mortgage loan files.

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LaSalle Bank National Association and Lehman Brothers Bank, FSB (‘‘LBB’’), an affiliate of LBHI (LBB and LBHI, collectively, for purposes of this paragraph, ‘‘Lehman’’), are parties to a custodial agreement whereby LaSalle, for consideration, provides custodial services to Lehman for certain commercial mortgage loans originated or purchased by it. Pursuant to this custodial agreement, LaSalle is currently providing custodial services for most of the mortgage loans to be sold by Lehman to the Depositor in connection with this securitization. The terms of the custodial agreement are customary for the commercial mortgage-backed securitization industry providing for the delivery, receipt, review and safekeeping of mortgage loan files.

Using information set forth in this prospectus supplement, the trustee will develop the cashflow model for the trust. Based on the monthly mortgage loan information provided by the master servicer, the trustee will calculate the amount of principal and interest to be paid to each class of series 2006-C7 certificates on each distribution date. In accordance with the cashflow model and based on the monthly mortgage loan information provided by the master servicer, the trustee will perform distribution calculations, remit distributions on the distribution date to series 2006-C7 certificateholders and prepare a monthly statement to series 2006-C7 certificateholders detailing the payments received and the activity on the mortgage loans during the related collection period. In performing these obligations, the trustee will be able to conclusively rely on the information provided to it by the master servicer, and the trustee will not be required to recompute, recalculate or verify the information provided to it by the master servicer. LaSalle regularly performs such obligations with respect to commercial mortgage-backed securities transactions for which it acts as trustee.

There are no legal proceedings pending against LaSalle, or to which any property of LaSalle is subject, that is material to the series 2006-C7 certificateholders, nor does LaSalle have actual knowledge of any proceedings of this type contemplated by governmental authorities.

We, the master servicer, the special servicer and our and their respective affiliates, may from time to time maintain and enter into other banking and trustee relationships in the ordinary course of business with the trustee and its affiliates. The trustee and any of its respective affiliates may hold series 2006-C7 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 trust assets. 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 is incompetent or unqualified to perform some acts, singly upon the separate trustee or co-trustee who will exercise and perform its rights, powers, duties and obligations solely at the direction of the trustee.

In addition to having express duties under the series 2006-C7 pooling and servicing agreement, the trustee, as a fiduciary, also has certain duties unique to fiduciaries under applicable law. In general, the trustee will be subject to certain federal laws and, because the series 2006-C7 pooling and servicing agreement is governed by New York law, certain New York state laws. As a national bank acting in a fiduciary capacity, the trustee will, in the administration of its duties under the series 2006-C7 pooling and servicing agreement, be subject to certain regulations promulgated by the Office of the Comptroller of the Currency, specifically those set forth in Chapter 12, Part 9 of the Code of Federal Regulations. New York common law has required fiduciaries of common law trusts formed in New York to perform their duties in accordance with the ‘‘prudent person’’ standard, which, in this transaction, would require the trustee to exercise such diligence and care in the administration of the trust as a person of ordinary prudence would employ in managing his own property. However, under New York common law, the application of this standard of care can be restricted contractually to apply only after the occurrence of a default. The series 2006-C7 pooling and servicing agreement provides that the Trustee is subject to the prudent person standard only for so long as an event of default has occurred and remains uncured.

LaSalle is also the trustee under both (a) the series 2006-C1 pooling and servicing agreement, which governs the servicing of the Triangle Town Center Loan Combination, and (b) the series 2006-C6 pooling and servicing agreement, which governs the servicing of the 1211 Avenue of the Americas Loan Combination.

AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We are a wholly owned, direct subsidiary of Lehman Commercial Paper Inc. Lehman Commercial Paper Inc. is a wholly-owned, direct subsidiary of Lehman Brothers Inc., one of the underwriters with respect to this offering. Lehman Brothers Inc. is a wholly owned, direct subsidiary of Lehman Brothers Holdings Inc., the co-sponsor and one of the mortgage loan sellers. In general, one of our affiliates and an affiliate of Lehman Brothers Holdings Inc. is also the originator with respect to certain of the underlying mortgage loans contributed to the trust by the Lehman Mortgage Loan Seller. See also ‘‘The Transaction Participants—The Depositor,’’ ‘‘—The Sponsor’’ and ‘‘—The Originators’’ in the accompanying base prospectus.

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UBS Real Estate Investments Inc., a co-sponsor and one of the mortgage loan sellers, is an affiliate of UBS Global Asset Management (US) Inc., one of the underwriters with respect to the offered certificates. In addition, all of the mortgage loans contributed to the trust by the UBS Mortgage Loan Seller were originated by the UBS Mortgage Loan Seller or its affiliates, directly or through correspondents. See also ‘‘Transaction Participants—The Sponsors’’ and ‘‘—The Mortgage Loan Sellers’’ in this prospectus supplement.

KeyBank National Association, a co-sponsor and one of the mortgage loan sellers, is an affiliate of McDonald Investments Inc., one of the underwriters with respect to this offering. In addition, all of the mortgage loans contributed to the trust by the KeyBank Mortgage Loan Seller were originated by the KeyBank Mortgage Loan Seller. KeyCorp Real Estate Capital Markets, Inc., a wholly owned subsidiary of the KeyBank Mortgage Loan Seller and an affiliate of McDonald Investments Inc., will act as the primary servicer of the mortgage loans contributed to the trust by the KeyBank Mortgage Loan Seller. See also ‘‘Transaction Participants—The Sponsors’’ and ‘‘—The Mortgage Loan Sellers’’ in this prospectus supplement.

Pursuant to an interim servicing agreement between Wachovia and the UBS Mortgage Loan Seller, Wachovia acts as primary servicer with respect to mortgage loans owned by the UBS Mortgage Loan Seller from time to time, including, prior to their inclusion in the trust, some or all of the underlying mortgage loans being contributed by the UBS Mortgage Loan Seller. Pursuant to an interim servicing agreement between Wachovia and the Lehman Mortgage Loan Seller, Wachovia acts as primary servicer with respect to mortgage loans owned by the Lehman Mortgage Loan Seller from time to time, including, prior to their inclusion in the trust, some or all of the underlying mortgage loans being contributed by the Lehman Mortgage Loan Seller.

The trustee has entered into separate custodial agreements with each of UBS Real Estate Investments Inc. and Lehman Brothers Bank, FSB, an affiliate of Lehman Brothers Holdings Inc. (Lehman Brothers Bank, FSB and Lehman Brothers Holdings Inc., collectively, for purposes of this paragraph, ‘‘Lehman’’) whereby the trustee, for consideration, provides custodial services to each of UBS Real Estate Investments Inc. and Lehman for certain commercial mortgage loans originated or purchased by UBS Real Estate Investments Inc. or Lehman, as the case may be. Pursuant to these custodial agreements, the trustee is currently providing custodial services for most of the mortgage loans to be sold by each of UBS Real Estate Investments Inc. and Lehman to the Depositor in connection with this securitization. See also ‘‘Transaction Participants—The Trustee’’ in this prospectus supplement.

The master servicer may enter into agreements with certain firms, including without limitation, the transaction participants of the 2006-C7 securitization transaction, to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on certain loans, which may include, without limitation, the underlying mortgage loans. See also ‘‘Transaction Participants—The Servicers’’ in this prospectus supplement.

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THE SERIES 2006-C7 POOLING AND SERVICING AGREEMENT

General

The parties to the series 2006-C7 pooling and servicing agreement will consist of us, the trustee, the master servicer and the special servicer. The series 2006-C7 pooling and servicing agreement will govern, among other things:

•  the issuance of the series 2006-C7 certificates;
•  the formation of the issuing entity;
•  the transfer of the initial trust assets to the issuing entity;
•  the retention of the trust assets on behalf of the series 2006-C7 certificateholders; and
•  the servicing and administration of the mortgage loans in the trust (other than the Outside Serviced Trust Mortgage Loan), as well as the servicing and administration of (a) the Serviced Non-Trust Loans, and (b) any REO Properties acquired by the special servicer on behalf of the series 2006-C7 certificateholders and, if and when applicable, the related Serviced Non-Trust Loan Noteholder(s) as a result of foreclosure or other similar action.

Because the Extendicare Portfolio Loan Combination, the Reston Town Center Loan Combination and the MezzCap Loan Combinations are to be serviced and administered under the series 2006-C7 pooling and servicing agreement, while the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination are subject to other servicing arrangements, we have adopted the use of the following terms:

•  ‘‘Serviced Loan Combination’’ refers to a Loan Combination that is being serviced and administered under the series 2006-C7 pooling and servicing agreement. The Extendicare Portfolio Loan Combination, the Reston Town Center Loan Combination and the MezzCap Loan Combinations are the Serviced Loan Combinations.
•  ‘‘Serviced Non-Trust Loan’’ refers to a Non-Trust Loan that is part of a Serviced Loan Combination. The Extendicare Portfolio Non-Trust Loan, the Reston Town Center Non-Trust Loan and, during such periods as may be provided for in the related Co-Lender Agreement, each Non-Trust Loan that is part of a MezzCap Loan Combination are the Serviced Non-Trust Loans.
•  ‘‘Serviced Non-Trust Loan Noteholder’’ refers to the holder of a Serviced Non-Trust Loan.
•  ‘‘Outside Serviced Loan Combination’’ refers to a Loan Combination that is being serviced and administered under a servicing agreement other than the series 2006-C7 pooling and servicing agreement. The 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination are the Outside Serviced Loan Combinations.
•  ‘‘Outside Serviced Trust Mortgage Loan’’ refers to an underlying mortgage loan that is part of an Outside Serviced Loan Combination. The 1211 Avenue of the Americas Mortgage Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan are the Outside Serviced Trust Mortgage Loans.

The following summaries describe some of the material provisions of the series 2006-C7 pooling and servicing agreement. In addition, see ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans’’. ‘‘—Representations and Warranties’’ and ‘‘—Cures and Repurchases’’ and ‘‘Description of the Offered Certificates’’ in this prospectus supplement and ‘‘Description of the Governing Documents’’ in the accompanying base prospectus.

Overview of Servicing

The series 2006-C7 pooling and servicing agreement will provide that the master servicer and the special servicer must each service and administer the mortgage loans (except to the extent provided in the series 2006-C7 pooling and servicing agreement and other than the Outside Serviced Trust Mortgage Loans) and any REO Properties in the trust for which it is responsible, together with, when appropriate, the Serviced Non-Trust Loans, directly or through sub-servicers, in accordance with:

•  any and all applicable laws;
•  the express terms of the series 2006-C7 pooling and servicing agreement;
•  the express terms of the subject mortgage loans and any and all related intercreditor, co-lender and/or similar agreements; and
•  to the extent consistent with the foregoing, the Servicing Standard.

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In general, the master servicer will be responsible for the servicing and administration of each mortgage loan in the trust (excluding the Outside Serviced Trust Mortgage Loans) and each Serviced Non-Trust Loan—

•  as to which no Servicing Transfer Event has occurred, or
•  that has been worked out following a Servicing Transfer Event and as to which no new Servicing Transfer Event has occurred.

The special servicer, on the other hand, will be responsible for the servicing and administration of each mortgage loan (excluding, if applicable, the Outside Serviced Trust Mortgage Loans) in the trust and each Serviced Non-Trust Loan, as to which a Servicing Transfer Event has occurred and which has not yet become a worked-out mortgage loan with respect to that Servicing Transfer Event. In addition, the special servicer will be responsible for the administration of any REO Properties acquired by the trust (other than those that relate to Outside Serviced Loan Combinations).

Despite the foregoing, the series 2006-C7 pooling and servicing agreement will require the master servicer to continue to receive information (which information, with respect to an Outside Serviced Trust Mortgage Loan, will be received from the master servicer under the governing servicing agreement for the related Outside Serviced Loan Combination) and prepare all reports to the trustee required to be received or prepared with respect to any specially serviced mortgage loans (other than, if applicable, an Outside Serviced Loan Combination) and, otherwise, to render other incidental services with respect to any specially serviced mortgage loans (other than, if applicable, an Outside Serviced Loan Combination). In addition, the special servicer will perform limited duties and have certain approval rights regarding servicing actions with respect to non-specially serviced mortgage loans (other than the Outside Serviced Trust Mortgage Loans) in the trust and the Serviced Non-Trust Loan. 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 series 2006-C7 pooling and servicing agreement.

The master servicer will transfer servicing of a mortgage loan for which it is responsible under the series 2006-C7 pooling and servicing agreement 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 in accordance with the definition of ‘‘Servicing Transfer Event’’ in the glossary to this prospectus supplement.

In general, the occurrence of a Servicing Transfer Event with respect to any mortgage loan in a Serviced Loan Combination will automatically result in the occurrence of a Servicing Transfer Event with respect to the other mortgage loan(s) in that Loan Combination. However, if, subject to the terms, conditions and limitations of the related Co-Lender Agreement, a Non-Trust Loan Noteholder prevents the occurrence of a Servicing Transfer Event with respect to the related mortgage loan in the trust through the exercise of cure rights as set forth in the related Co-Lender Agreement, then the existence of such Servicing Transfer Event with respect to the related Non-Trust Loan will not, in and of itself, result in the existence of a Servicing Transfer Event with respect to the related mortgage loan in the trust, or the transfer to special servicing of the applicable Loan Combination, unless a separate Servicing Transfer Event may occur with respect thereto.

In general, the Serviced Non-Trust Loans will be serviced and administered under the series 2006-C7 pooling and servicing agreement as if each such Serviced Non-Trust Loan was a mortgage loan in the trust.

Notwithstanding the foregoing, the Outside Serviced Trust Mortgage Loans will not be serviced under the series 2006-C7 pooling and servicing agreement. Under the terms of the related Co-Lender Agreement—

•  for so long as the 1211 Avenue of the Americas Non-Trust Loan is part of the Series 2006-C6 Securitization, the 1211 Avenue of the Americas Loan Combination will be serviced and administered by the master servicer and a special servicer for the Series 2006-C6 Securitization (subject to replacement of each such party), in accordance with the series 2006-C6 pooling and servicing agreement (or any permitted successor servicing agreement); and
•  for so long as the Triangle Town Center Note A Senior Non-Trust Loan is part of the Series 2006-C1 Securitization, the Triangle Town Center Loan Combination will be serviced and administered by the master servicer and a special servicer for the Series 2006-C1 Securitization (subject to replacement of each such party), in accordance with the series 2006-C1 pooling and servicing agreement (or any permitted successor servicing agreement).

The discussion below regarding servicing generally relates solely to the servicing of the mortgage loans in the trust (excluding the Outside Serviced Trust Mortgage Loans) under the series 2006-C7 pooling and servicing agreement. For a description of certain of the servicing arrangements for the Outside Serviced Loan Combinations, see ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement.

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Sub-Servicers

Some of the mortgage loans that we intend to include in the trust are currently being serviced by third-party servicers that are entitled to and will become sub-servicers of these loans on behalf of the master servicer. Neither the trustee nor any other successor master servicer may terminate the sub-servicing agreement for any of those sub-servicers without cause.

The series 2006-C7 pooling and servicing agreement will permit each of the master servicer and, with the consent of the series 2006-C7 controlling class representative, the special servicer to enter into sub-servicing agreements to provide for the performance by third parties of any or all of their respective obligations under the series 2006-C7 pooling and servicing agreement, provided that in each case, the sub-servicing agreement: (a) is consistent with the series 2006-C7 pooling and servicing agreement in all material respects, requires the sub-servicer to comply with all of the applicable conditions of the series 2006-C7 pooling and servicing agreement and, with limited exceptions, provides for events of default with respect to the subject sub-servicer substantially the same as those applicable to the master servicer or the special servicer, as the case may be, modified as necessary to apply to the subject sub-servicer’s obligations under that sub-servicing agreement; (b) provides that if the master servicer or the special servicer, as the case may be, will for any reason no longer act in such capacity under the series 2006-C7 pooling and servicing agreement, including by reason of an event of default, the trustee or its designee may assume all of the rights and, except to the extent they arose prior to the date of assumption, obligations of the master servicer or the special servicer, as the case may be, under that sub-servicing agreement or may terminate that sub-servicing agreement without cause, except that any sub-servicing agreement in effect as of the Issue Date or within 90 days thereafter may only be terminated for cause; (c) provides that the trustee, for the benefit of the series 2006-C7 certificateholders and, in the case of a sub-servicing agreement relating to a Serviced Loan Combination, the related Serviced Non-Trust Loan Noteholder(s), will each be a third-party beneficiary under that sub-servicing agreement; (d) permits any purchaser of an underlying mortgage loan to terminate that sub-servicing agreement with respect to such purchased mortgage loan at its option and without penalty; (e) does not permit the sub-servicer to enter into or consent to material modifications, extensions, waivers or amendments of or otherwise take enforcement actions with respect to the subject mortgage loans on behalf of the master servicer or the special servicer, as the case may be, without the consent of the master servicer or special servicer, as the case may be; and (f) does not permit the sub-servicer any direct rights of indemnification that may be satisfied out of assets of the trust fund. In addition, pursuant to the series 2006-C7 pooling and servicing agreement, each sub-servicing agreement entered into by the master servicer must provide that such agreement will, with respect to any underlying mortgage loan, terminate at the time such underlying mortgage loan becomes a specially serviced mortgage loan (or, alternatively, be subject to the special servicer’s rights to service such underlying mortgage loan for so long as such underlying mortgage loan continues to be a specially serviced mortgage loan), and each sub-servicing agreement entered into by the special servicer may relate only to specially serviced mortgage loans and must terminate with respect to any such underlying mortgage loan which ceases to be a specially serviced mortgage loan.

References in the series 2006-C7 pooling and servicing agreement, and under this ‘‘The Series 2006-C7 Pooling and Servicing Agreement’’ section, to actions taken or to be taken by the master servicer or the special servicer include actions taken or to be taken by a sub-servicer on behalf of the master servicer or the special servicer, as the case may be. In connection with the foregoing, all amounts advanced by any sub-servicer to satisfy the obligations of the master servicer or the special servicer under the series 2006-C7 pooling and servicing agreement to make P&I advances or servicing advances are deemed to have been advanced by the master servicer or the special servicer, as the case may be, out of its own funds and, accordingly, those advances will be recoverable by that sub-servicer in the same manner and out of the same funds as if that sub-servicer were the master servicer or the special servicer, as the case may be. The series 2006-C7 pooling and servicing agreement will provide that, for so long as they are outstanding, advances under any sub-servicing agreement will accrue interest at the rate set forth in the series 2006-C7 pooling and servicing agreement, with that interest to be allocable between the master servicer or the special servicer, as the case may be, and the subject sub-servicer as they may agree. For purposes of the series 2006-C7 pooling and servicing agreement, each of the master servicer and the special servicer will be deemed to have received any payment when a sub-servicer retained by it receives the payment.

The series 2006-C7 pooling and servicing agreement will require the master servicer and the special servicer, for the benefit of the trustee, the series 2006-C7 certificateholders and, in the case of a Loan Combination, the related Serviced Non-Trust Loan Noteholder(s), to monitor the performance and enforce the obligations of their respective sub-servicers under the related sub-servicing agreements. Further, the series 2006-C7 pooling and servicing agreement will provide that, notwithstanding any sub-servicing agreement, the master servicer and the special servicer will remain obligated and liable to the trustee, the series 2006-C7 certificateholders and the Serviced Non-Trust Loan Noteholder(s) for the performance of their respective obligations and duties under the series 2006-C7 pooling and servicing agreement as if each alone were servicing

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and administering the subject mortgage loans, and the master servicer and the special servicer will be responsible, without right of reimbursement, for all compensation of each sub-servicer retained by it.

Servicing Compensation and Payment of Expenses

Principal Master Servicing Compensation.    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 mortgage loan in the trust (including the Outside Serviced Trust Mortgage Loans) and, subject to the discussion regarding MezzCap Loan Combinations below, each and every Serviced Non-Trust Loan, including each such mortgage loan—

•  that is being specially serviced;
•  as to which the corresponding mortgaged real property has become an REO Property; or
•  that has been defeased.

In the case of each mortgage loan in the trust, the master servicing fee will—

•  in the case of each KeyBank Mortgage Loan that accrues interest on an Actual/360 Basis, be calculated on an Actual/360 Basis, and in the case of each other mortgage loan in the trust, be calculated on a 30/360 Basis, except in the case of partial periods of less than a month, when it will be computed on the basis of the actual number of days elapsed in the partial period and a 360-day year,
•  accrue at the related master servicing fee rate,
•  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
•  be payable monthly from amounts received with respect to, or allocable as recoveries of, interest on that mortgage loan or, following liquidation of that mortgage loan and any related REO Property, from general collections on the other mortgage loans and REO Properties in the trust.

The master servicing fee rate with respect to each Outside Serviced Trust Mortgage Loan under the series 2006-C7 pooling and servicing agreement will equal 0.01% per annum. The master servicing fee rate with respect to the other underlying mortgage loans under the series 2006-C7 pooling and servicing agreement will vary on a loan-by-loan basis and ranges from 0.02% per annum to 0.11% per annum. The master servicing fee rate includes any sub-servicing fee rate payable to any third-party servicers that sub-service or primary service the loans on behalf of the master servicer, but does not include (i) the master servicing fee rate (which is 0.01% per annum calculated on a 30/360 Basis) that is payable to the series 2006-C6 master servicer with respect to the 1211 Avenue of the Americas Mortgage Loan under the series 2006-C6 pooling and servicing agreement, or (ii) the master servicing fee rate (which is 0.01% per annum calculated on a 30/360 Basis) that is payable to the series 2006-C1 master servicer with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan under the servicing agreement for the Triangle Town Center Loan Combination.

Notwithstanding the foregoing, only after the occurrence, and during the continuance, of a MezzCap Material Default with respect to any MezzCap Loan Combination, will master servicing fees be payable with respect to the Serviced Non-Trust Loan in the subject MezzCap Loan Combination.

Principal Special Servicing Compensation.    The principal compensation to be paid to the special servicer with respect to its special servicing activities in respect of the mortgage pool (other than the Outside Serviced Trust Mortgage Loans) and the Serviced Non-Trust Loans will generally consist of—

•  the special servicing fee,
•  the workout fee, and
•  the liquidation fee.

The Special Servicing Fee.    The special servicing fee will be earned with respect to each underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) and each Serviced Non-Trust Loan—

•  that is being specially serviced, or
•  as to which the corresponding mortgaged real property has become an REO Property.

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In the case of each underlying mortgage loan that satisfies the criteria described in the prior paragraph, the special servicing fee will—

•  be calculated on a 30/360 Basis, except in the case of partial periods of less than a month, when it will be computed on the basis of the actual number of days elapsed in the partial period and a 360-day year,
•  accrue at a special servicing fee rate of 0.25% per annum,
•  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
•  generally be payable monthly from general collections on all the mortgage loans and any REO Properties in the trust.

Subject to the discussion regarding MezzCap Loan Combinations below, special servicing fees earned with respect to a Serviced Loan Combination may be paid out of collections on the entire subject Loan Combination.

The Workout Fee.    The special servicer will, in general, be entitled to receive a workout fee with respect to each underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) and Serviced Non-Trust Loan that has been worked out following a Servicing Transfer Event and as to which no new Servicing Transfer Event has occurred. The workout fee will generally be payable out of, and will be calculated by application of a workout fee rate of 1.0% to, each collection of—

•  interest, other than Default Interest and Post-ARD Additional Interest,
•  principal, and
•  prepayment consideration,

received on the subject mortgage loan for so long as it remains a worked out mortgage loan; provided that any workout fees in respect of a Serviced Loan Combination will generally be payable out of and based on collections on the entire such Loan Combination.

The workout fee with respect to any worked-out mortgage loan referred to in the prior paragraph 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 that mortgage loan is worked out with respect to that new Servicing Transfer Event.

If the special servicer is terminated or replaced—other than for cause—or resigns, then it will retain the right to receive any and all workout fees payable with respect to each mortgage loan serviced under the series 2006-C7 pooling and servicing agreement that became a worked-out mortgage loan during the period that it acted as special servicer and remained a worked-out mortgage loan at the time of its termination, replacement 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 2006-C7 certificateholders.

The Liquidation Fee.    Except as described in the next paragraph, the special servicer will be entitled to receive a liquidation fee with respect to: (a) any specially serviced mortgage loan (other than a mortgage loan that is part of an Outside Serviced Loan Combination) for which it obtains a full, partial or discounted payoff from the related borrower; and (b) any specially serviced mortgage loan or REO Property (other than a mortgage loan that is part of, or an REO Property that relates to, an Outside Serviced Loan Combination) as to which it receives any Liquidation Proceeds. As to each such specially serviced mortgage loan and REO Property, the liquidation fee will generally 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 any portion of that payment or proceeds that represents a recovery of Default Interest or Post-ARD Additional Interest; provided that, subject to the discussion regarding MezzCap Loan Combinations below, any liquidation fees in respect of a Serviced Loan Combination will generally be payable out of and based on collections on the entire such Loan Combination.

Despite anything to the contrary described in the prior paragraph, no liquidation fee will be payable based on, or out of, amounts received in connection with:

•  a specially serviced mortgage loan that becomes a worked-out mortgage loan (unless it again becomes a specially serviced mortgage loan);
•  the repurchase of any mortgage loan in the trust by us, the UBS Mortgage Loan Seller or the KeyBank Mortgage Loan Seller, due to a breach of representation or warranty or for missing mortgage loan documentation, prior to the expiration of a specified period of time set forth in the series 2006-C7 pooling and servicing agreement, as described under ‘‘Description of the Mortgage Pool—Cures and Repurchases’’ in this prospectus supplement;

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•  the purchase of any specially serviced mortgage loan out of the trust by any holder of the fair value purchase option, as described under ‘‘—Fair Value Option’’ below, unless (a) such purchase occurs more than 90 days after the purchase option arose, and (b) the purchase is by certain specified parties under the series 2006-C7 pooling and servicing agreement;
•  the purchase of any defaulted mortgage loan in the trust by a related mezzanine lender in connection with repurchase rights set forth in the applicable intercreditor agreement, unless the liquidation fee is payable and is actually paid pursuant to such intercreditor agreement;
•  the purchase of all of the mortgage loans and REO Properties in the trust by us, Lehman Brothers Inc., the special servicer, any certificateholder(s) of the series 2006-C7 controlling class or the master servicer in connection with the termination of the trust, as described under ‘‘Description of the Offered Certificates—Termination’’ in this prospectus supplement;
•  the purchase of an underlying mortgage loan that is part of a Loan Combination by any related Non-Trust Loan Noteholder or its designee in accordance with the related Co-Lender Agreement, unless (a) such purchase occurs more than 60 days after the purchase right arose, and (b) the liquidation fee is actually paid; or
•  the receipt or application of loss of value payments, as described under ‘‘Description of the Mortgage Pool—Cures and Repurchases’’ in this prospectus supplement.

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 2006-C7 certificateholders.

MezzCap Loan Combinations.    After the occurrence, and during the continuance, of a MezzCap Material Default, special servicing fees and, except in connection with a purchase of the related underlying mortgage loan by the related Serviced Non-Trust Loan Noteholder, pursuant to the purchase option in the related Co-Lender Agreement, as described under ‘‘Description of the Mortgage Pool—The Loan Combinations—The MezzCap Loan Combinations’’ in this prospectus supplement, workout fees and liquidation fees, earned with respect to a MezzCap Loan Combination may be paid out of collections on the entire such MezzCap Loan Combination. However, if a MezzCap Material Default ceases to exist with respect to a MezzCap Loan Combination, payments on the related Serviced Non-Trust Loan may be made directly to the related Serviced Non-Trust Loan Noteholder. Accordingly, those payments would no longer be available to offset special servicing fees, workout fees, liquidation fees or any other Additional Trust Fund Expenses paid or payable with respect to the related underlying mortgage loan.

Outside Serviced Loan Combinations.    Special servicing fees, liquidation fees and workout fees will be payable with respect to the Outside Serviced Loan Combinations in accordance with the applicable governing servicing agreement under generally the same circumstances as such fees will be payable with respect to the Serviced Loan Combinations under the series 2006-C7 pooling and servicing agreement and may reduce amounts payable to the series 2006-C7 certificateholders, except that any special servicing fee with respect to an Outside Serviced Loan Combination will be calculated at 0.35% per annum and be subject to a monthly minimum of $4,000.

Additional Servicing Compensation.    As additional master servicing compensation, the master servicer will be entitled to receive any and all Prepayment Interest Excesses collected with respect to the entire mortgage pool (but, in the case of Outside Serviced Trust Mortgage Loan, only to the extent passed through to the trust).

In addition, the master servicer will generally be authorized to invest or direct the investment of funds held in its custodial account, and in any and all escrow accounts, reserve accounts and/or Serviced Loan Combination-specific accounts maintained by the master servicer, in Permitted Investments. See ‘‘—Accounts—Custodial Account’’ below. In general, the master servicer will be entitled to retain any interest or other income earned on those funds that is not otherwise payable to the borrowers and, to the extent the investments are made for its benefit, will be required to cover any investment losses from its own funds. 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.

As additional special servicing compensation, the special servicer will be authorized to invest or direct the investment of funds held in its REO account in Permitted Investments. See ‘‘—Accounts—REO Account’’ below. In general, the special servicer will be entitled to retain any interest or other income earned on those funds and will be required to cover any investment losses from its own funds without any right to reimbursement. The special servicer will not be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any depository institution or trust company holding the special servicer’s REO account.

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All modification fees, assumption fees, assumption application fees, extension fees, defeasance fees, consent/waiver fees and other comparable transaction fees and charges, if any, collected with respect to the underlying mortgage loans (other than the Outside Serviced Trust Mortgage Loans) will be paid to, and allocated between, the master servicer and the special servicer, as additional compensation, in accordance with the series 2006-C7 pooling and servicing agreement. Similarly, any late payment charges and Default Interest actually collected (and, in the case of an Outside Serviced Trust Mortgage Loan, remitted to the trust) with respect to any underlying mortgage loan during any collection period will be paid to, and allocated between, the master servicer and the special servicer, as additional compensation, as provided in the series 2006-C7 pooling and servicing agreement, but only to the extent that those late payment charges and Default Interest are not otherwise allocable—

•  to pay the master servicer, the special servicer or the trustee, as applicable, any unpaid interest on advances reimbursable to that party, during that collection period, with respect to the subject mortgage loan or the related mortgaged real property,
•  to pay any other expenses, excluding special servicing fees, liquidation fees and workout fees, that are then outstanding with respect to the subject mortgage loan or the related mortgaged real property, and that, if paid from collections on the mortgage pool other than late payment charges and Default Interest collected with respect to the subject mortgage loan, would be an Additional Trust Fund Expense, or
•  to reimburse the trust for any Additional Trust Fund Expenses, including interest on advances, but excluding special servicing fees, liquidation fees and workout fees, that were previously paid with respect to the subject mortgage loan or the related mortgaged real property from collections on the mortgage pool—other than late payment charges and Default Interest collected with respect to the subject mortgage loan—and that were not previously reimbursed in accordance with this bullet.

Some or all of the items referred to in the prior paragraph that are collected in respect of the Serviced Non-Trust Loans may also be paid to, and allocated between, the master servicer and the special servicer, as additional compensation, as provided in the series 2006-C7 pooling and servicing agreement. Some or all of the items referred to in the prior paragraph (exclusive of Default Interest and late payment charges) that are collected in respect of an Outside Serviced Trust Mortgage Loan will likely be paid to, and allocated between, the applicable servicers as additional compensation, as provided under the governing servicing agreement for the subject Outside Serviced Loan Combination. However, Default Interest and late payment charges allocable to an Outside Serviced Trust Mortgage Loan may be applied, in accordance with the related governing servicing agreement, first, to offset interest on servicing advances, and, in the case of the Triangle Town Center Subordinate Tranche Mortgage Loan, delinquency advances on the related Non-Trust Loans made under such governing servicing agreement, and then, to the extent passed through to the trust, for the same purposes as Default Interest and late payment charges on the other underlying mortgage loans.

Prepayment Interest Shortfalls.    The series 2006-C7 pooling and servicing agreement generally provides that if any Prepayment Interest Shortfalls are incurred in connection with the voluntary prepayment by borrowers of non-specially serviced mortgage loans in the mortgage pool (including, if applicable, the Outside Serviced Trust Mortgage Loans) during any collection period, the master servicer must make a non-reimbursable payment with respect to the related distribution date in an amount equal to the lesser of:

•  the total amount of those Prepayment Interest Shortfalls, and
•  the sum of the following components of the master servicer’s total servicing compensation for that same collection period—
1.  all Prepayment Interest Excesses, if any, collected with respect to the entire mortgage pool during that collection period, and
2.  with respect to each and every mortgage loan in the trust for which the master servicer receives master servicing fees during that collection period, the portion of those fees calculated, in each case, at an annual rate of 0.01% per annum.

No other master servicing compensation will be available to cover Prepayment Interest Shortfalls.

Any payments made by the master servicer with respect to any distribution date to cover Prepayment Interest Shortfalls will be included among the amounts payable as principal and interest on the series 2006-C7 certificates on that distribution date as described under ‘‘Description of the Offered Certificates—Payments’’ in this prospectus supplement. If the amount

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of the payments made by the master servicer with respect to any distribution date to cover Prepayment Interest Shortfalls is less than the total of all the Prepayment Interest Shortfalls incurred with respect to the mortgage pool during the related collection period, then the resulting Net Aggregate Prepayment Interest Shortfall will be allocated to or among one or more of the respective interest-bearing classes of the series 2006-C7 certificates, in reduction of the interest payable on those certificates, as and to the extent described under ‘‘Description of the Offered Certificates—Payments—Payments of Interest’’ in this prospectus supplement.

Payment of Expenses.    Each of the master servicer and the special servicer will be required to pay its overhead costs and any general and administrative expenses incurred by it in connection with its servicing activities under the series 2006-C7 pooling and servicing agreement. Neither the master servicer nor the special servicer will be entitled to reimbursement for any expenses incurred by it in connection with performing its duties under the series 2006-C7 pooling and servicing agreement except as expressly provided therein.

The master servicer will be permitted to pay, and the special servicer may direct the payment of, some servicing expenses out of general pool-wide collections on deposit in the master servicer’s custodial account. Servicing expenses that may be so paid include the cost to remediate any adverse environmental circumstance or condition at any of the mortgaged real properties securing an underlying mortgage loan serviced under the series 2006-C7 pooling and servicing agreement. In addition, the series 2006-C7 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 master servicer’s custodial account any servicing expense that, if advanced by the master servicer or the special servicer, would not be recoverable from expected collections on the related mortgage loan or REO Property. See ‘‘—Advances’’ below. 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 2006-C7 certificateholders (or, if the subject specially serviced asset is a Serviced Loan Combination or any related REO Property, the best interests of the series 2006-C7 certificateholders and the related Serviced Non-Trust Loan Noteholder(s)), as a collective whole.

Trustee Compensation

The trustee will be entitled to receive monthly, out of general collections with respect to the mortgage pool on deposit in its collection account, the trustee fee. With respect to each calendar month, the trustee fee will equal one month’s interest accrued at 0.00065% per annum on the Stated Principal Balance outstanding immediately prior to the distribution date in that month of each and every mortgage loan in the trust. In the case of KeyBank Mortgage Loans that accrue interest on an Actual/360 Basis, the trustee fee will accrue on an Actual/360 Basis, and in the case of the remaining underlying mortgage loans, the trustee fee will accrue on a 30/360 Basis.

In addition, the trustee will be authorized to invest or direct the investment of funds held in its collection account and its interest reserve account in Permitted Investments. See ‘‘—Accounts—Collection Account’’ and ‘‘—Accounts—Interest Reserve Account’’ below. In general, the trustee will be entitled to retain any interest or other income earned on those funds and will be required to cover any investment losses from its own funds without any right to reimbursement. 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 the trustee’s collection account or interest reserve account.

Advances

Servicing Advances.    Any and all customary, reasonable and necessary out-of-pocket costs and expenses incurred or to be incurred, as the case may be, by the master servicer, the special servicer or the trustee in connection with the servicing of a mortgage loan under the series 2006-C7 pooling and servicing agreement, if a default is imminent or after a default, delinquency or other unanticipated event has occurred with respect to that loan, or in connection with the administration of any REO Property, will be servicing advances. Servicing advances will be reimbursable from future payments and other collections, including Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds, in connection with the related mortgage loan or REO Property.

Notwithstanding the foregoing, none of the master servicer, the special servicer or the trustee will be required to make any servicing advances with respect to any Outside Serviced Trust Mortgage Loan or any related mortgaged real property under the series 2006-C7 pooling and servicing agreement. Those servicing advances will be made by the applicable master servicer, special servicer, trustee or fiscal agent, if any (and will be reimbursable together with interest thereon at a published prime rate) under the governing servicing agreement for the related Outside Serviced Loan Combination, on generally the same terms and conditions as are applicable under the series 2006-C7 pooling and servicing agreement. See ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement.

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The special servicer may request that the master servicer make servicing advances with respect to a specially serviced mortgage loan or REO Property under the series 2006-C7 pooling and servicing agreement, in lieu of the special servicer’s making that advance itself. The special servicer must make the request a specified number of days in advance of when the servicing advance is required to be made under the series 2006-C7 pooling and servicing agreement. The master servicer, in turn, must make the requested servicing advance within a specified number of days following the master servicer’s receipt of the request. If the request is timely and properly made, the special servicer will be relieved of any obligations with respect to a servicing advance that it requests that the master servicer make, regardless of whether or not the master servicer actually makes that advance.

If the master servicer or the special servicer is required under the series 2006-C7 pooling and servicing agreement to make a servicing advance, but it does not do so within 15 days after the servicing advance is required to be made, then the trustee will be required:

•  if it has actual knowledge of the failure, to give the master servicer or the special servicer, as applicable, notice of its failure; and
•  if the failure continues for three more business days, to make the servicing advance.

None of the master servicer, the special servicer or the trustee will be obligated to make servicing advances that, in the judgment of the party making the advance, or in the judgment of the special servicer with regard to advances by parties other than the special servicer, would not be ultimately recoverable from expected collections on the related mortgage loan or REO Property. In making such recoverability determination, the relevant party will be entitled: (a) to consider, among other things, the obligations of the borrower under the terms of the related mortgage loan as it may have been modified; (b) to consider, among other things, the related mortgaged real property in its ‘‘as is’’ or then current condition and with its then current occupancy, as modified by that party’s assumptions—consistent with the Servicing Standard—regarding the possibility and effects of future adverse change with respect to the related mortgaged real property; (c) to estimate and consider, among other things, future expenses; and (d) to estimate and consider, among other things, the timing of recoveries. In addition, any such person may update or change its recoverability determinations at any time and may obtain from the special servicer any analysis, appraisals or market value estimates or other information in the possession of the special servicer for such purposes. If the master servicer, the special servicer or the trustee makes any servicing advance that it subsequently determines—or, with regard to advances by parties other than the special servicer, that the special servicer subsequently determines—is not recoverable from expected collections on the related mortgage loan or REO Property, then the party that made the advance may obtain reimbursement for it, together with interest on the advance, out of general collections on the mortgage loans and any REO Properties on deposit in the master servicer’s custodial account from time to time. See, however, ‘‘—Advances— Special Considerations Regarding the Reimbursement of Nonrecoverable Advances’’ below. See also ‘‘Description of the Governing Documents—Advances’’ in the accompanying base prospectus and ‘‘—Accounts—Custodial Account’’ below.

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 monthly and assumed monthly debt service payments, in each case net of related master servicing fees and workout fees (and, in the case of each Outside Serviced Trust Mortgage Loan, further net of any comparable fees payable pursuant to the governing servicing agreement for that mortgage loan), that—

•  were due or deemed due, as the case may be, with respect to the mortgage loans in the trust during the related collection period, and
•  were not paid by or on behalf of the respective borrowers or otherwise collected as of the close of business on the last day of the related collection period.

Notwithstanding the foregoing, if the special servicer determines that an Appraisal Reduction Amount exists with respect to any mortgage loan in the trust (or, with respect to an Outside Serviced Trust Mortgage Loan, if the master servicer has received notice from a servicer under the applicable governing servicing agreement of the existence of an Appraisal Reduction Amount with respect thereto), then the master servicer will generally reduce the interest portion—but not the principal portion—of each P&I advance, if any, that it must make with respect to that mortgage loan during the period that the Appraisal Reduction Amount exists. The interest portion of any P&I advance required to be made with respect to any underlying mortgage loan as to which there exists an Appraisal Reduction Amount, will equal the product of:

•  the amount of the interest portion of that P&I advance that would otherwise be required to be made with respect to the subject mortgage loan for the subject distribution date without regard to this sentence and the prior sentence, multiplied by

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•  a fraction, the numerator of which is equal to the Stated Principal Balance of the subject mortgage loan, net of the Appraisal Reduction Amount (or, if applicable, the relevant portion thereof allocable to the subject mortgage loan), and the denominator of which is equal to the Stated Principal Balance of the subject mortgage loan.

In the case of any underlying mortgage loan that is part of a Loan Combination, any reduction in the interest portion of P&I advances to be made with respect to that underlying mortgage loan, as contemplated by the prior paragraph, will be based on that portion of any Appraisal Reduction Amount with respect to the subject Loan Combination that is allocable to that underlying mortgage loan.

Each Loan Combination will be treated as a single underlying mortgage loan for purposes of calculating an Appraisal Reduction Amount. Any Appraisal Reduction Amount with respect to a Loan Combination will be allocated in accordance with the definition of ‘‘Appraisal Reduction Amount’’ set forth in the Glossary to this prospectus supplement.

With respect to any distribution date, the master servicer will be required to make P&I advances either out of its own funds or, subject to replacement as and to the extent provided in the series 2006-C7 pooling and servicing agreement, funds held in the master servicer’s custodial account that are not required to be paid on the series 2006-C7 certificates on that distribution date.

The trustee will be required to make any P&I advance that the master servicer is required, but fails, to make, including with respect to an Outside Serviced Trust Mortgage Loan.

The master servicer and the trustee will each be entitled to recover any P&I advance made by it out of its own funds from collections on the underlying mortgage loan as to which the advance was made. Neither the master servicer nor the trustee will be obligated to make any P&I advance for any underlying mortgage loan—including any specially serviced mortgage loan or any mortgage loan as to which the related mortgaged real property has become an REO Property—that, in its judgment, or in the judgment of the special servicer, would not ultimately be recoverable out of collections on the related underlying mortgage loan. If the master servicer or the trustee makes any P&I advance that it or the special servicer subsequently determines will not be recoverable out of collections on the related underlying mortgage loan, then the party that made the advance may obtain reimbursement for it, together with interest on the advance, out of general collections on the mortgage loans and any REO Properties in the trust on deposit in the master servicer’s custodial account from time to time. See, however, ‘‘—Advances—Special Considerations Regarding the Reimbursement of Nonrecoverable Advances’’ below. The master servicer and the trustee will be required to rely on the special servicer’s determination, and the trustee will be entitled to rely on the master servicer’s determination, that an advance, if made, would not be ultimately recoverable from collections on the related underlying mortgage loan. In making such recoverability determination, the relevant party will be entitled: (a) to consider, among other things, the obligations of the borrower under the terms of the related mortgage loan as it may have been modified; (b) to consider, among other things, the related mortgaged real property in its ‘‘as is’’ or then current condition and with its then current occupancy, as modified by such party’s assumptions—consistent with the Servicing Standard—regarding the possibility and effects of future adverse change with respect to such mortgaged real property; (c) to estimate and consider, among other things, future expenses; and (d) to estimate and consider, among other things, the timing of recoveries. In addition, any such person may update or change its recoverability determinations at any time and may obtain from the special servicer any analysis, appraisals or market value estimates or other information in the possession of the special servicer for such purposes. See ‘‘Description of the Governing Documents—Advances’’ in the accompanying base prospectus and ‘‘—Accounts—Custodial Account’’ below.

A monthly debt service payment will be assumed to be due with respect to:

•  each underlying 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 underlying 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 stated maturity date and for each successive due date that it remains outstanding and part of the trust, 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 (if applicable) and accrue interest according to its terms in effect prior to that stated 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

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mortgaged real property has become an REO Property, will generally equal, for each due date that the REO Property remains part of the trust, 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 an ARD Loan do not include Post-ARD Additional Interest or accelerated amortization payments.

Neither the master servicer nor the trustee will be required to make any P&I advance with respect to a Non-Trust Loan.

Special Considerations Regarding the Reimbursement of Nonrecoverable Advances.    If the master servicer, the trustee or the special servicer reimburses itself out of general collections on the mortgage pool for any advance that has been determined not to be recoverable out of collections on the related underlying mortgage loan, then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed (i) first, out of payments and other collections of principal on the underlying mortgage loans otherwise distributable on the series 2006-C7 principal balance certificates, and (ii) then, out of payments and other collections of interest on the underlying mortgage loans otherwise distributable on the series 2006-C7 certificates, thereby reducing the payments of principal on the series 2006-C7 principal balance certificates. In addition, if payments and other collections of principal on the mortgage pool are applied to reimburse, or pay interest on, any advance that is determined to be nonrecoverable from collections on the related mortgage loan (or, if such mortgage loan is part of the Serviced Loan Combination, on or in respect of such Loan Combination), as described in the prior sentence, then that advance will be reimbursed, and/or interest thereon will be paid, first, out of payments or other collections of principal on the loan group that includes the subject mortgage loan as to which the advance was made, and then, out of payments or other collections of principal on the other loan group.

Notwithstanding the foregoing, upon a determination that a previously made advance is not recoverable out of collections on the related underlying mortgage loan, instead of obtaining reimbursement out of general collections on the mortgage pool immediately, any of the master servicer, the trustee or the special servicer, as applicable, may, in its sole discretion, elect to obtain reimbursement for such nonrecoverable advance over a period of time (not to exceed 12 months without the consent of the series 2006-C7 controlling class representative), with interest thereon at the prime rate described under ‘‘—Advances—Interest on Advances’’ below. At any time after such a determination to obtain reimbursement over time in accordance with the preceding sentence, the master servicer, the trustee or the special servicer, as applicable, may, in its sole discretion, decide to obtain reimbursement out of general collections on the mortgage pool immediately. The fact that a decision to recover over time an advance that is nonrecoverable on a loan-specific basis, or not to do so, benefits some classes of series 2006-C7 certificateholders to the detriment of other classes of series 2006-C7 certificateholders will not constitute a violation of the Servicing Standard or a breach of the terms of the series 2006-C7 pooling and servicing agreement by any party thereto, or a violation of any fiduciary duty owed by any party thereto to the series 2006-C7 certificateholders.

Interest on Advances.    Each of the master servicer, the special servicer and the trustee will be entitled to receive interest on any servicing advances and, except in the case of the special servicer, P&I advances made by it. The interest will accrue on the amount of each servicing advance and P&I advance, and compound annually, for so long as that 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 or P&I advance will generally be payable—

•  first, out of Default Interest and late payment charges on deposit in the master servicer’s collection account that were collected on the related underlying mortgage loan during the collection period in which the advance is reimbursed, and
•  then, after or at the same time that advance is reimbursed, but only if and to the extent that the Default Interest and late payment charges referred to in the preceding bullet are insufficient to cover the advance interest, out of any other amounts then on deposit in the master servicer’s custodial account.

Any delay between a sub-servicer’s receipt of a late collection of any monthly debt service or other payment as to which an advance was made and the forwarding of that late collection to the master servicer, will increase the amount of interest accrued and payable to the master servicer, the trustee or the special servicer, as the case may be, on that advance. To the extent not offset by Default Interest and/or late payment charges accrued and actually collected on the related underlying mortgage loan, interest accrued on any outstanding advance will result in a reduction in amounts payable on one or more classes of the series 2006-C7 certificates.

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The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders

Series 2006-C7 Controlling Class.    As of any date of determination, the controlling class of series 2006-C7 certificateholders will be the holders of the most subordinate class of series 2006-C7 principal balance certificates then outstanding that has a total principal balance that is at least equal to 25% of that class’s original total principal balance. However, if no class of series 2006-C7 principal balance certificates has a total principal balance that satisfies this requirement, then the controlling class of series 2006-C7 certificateholders will be the holders of the most subordinate class of series 2006-C7 principal balance certificates then outstanding that has a total principal balance greater than zero. For purposes of the foregoing, whether a class of series 2006-C7 principal balance certificates is more subordinate than another such class will be based on the payment priority described under ‘‘Description of the Offered Certificates—Payments—Priority of Payments’’ in this prospectus supplement. The class A-1, A-2, A-AB, A-3 and A-1A certificates will be treated as one class for purposes of determining, and exercising the rights of, the controlling class of series 2006-C7 certificates. For clarification, the controlling class of series 2006-C7 certificateholders will in no event be the holders of the class X-CL, X-CP, X-W, R-I, R-II, R-III or V certificates, which do not have principal balances.

Selection of the Series 2006-C7 Controlling Class Representative.    The series 2006-C7 pooling and servicing agreement permits the holder or holders of series 2006-C7 certificates representing a majority of the voting rights allocated to the series 2006-C7 controlling class to select a representative with the rights and powers described below in this ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ section and elsewhere in this prospectus supplement. In addition, if the series 2006-C7 controlling class is held in book-entry form and confirmation of the identities of the related beneficial owners has been provided to the trustee, those beneficial owners entitled to a majority of the voting rights allocated to the series 2006-C7 controlling class will be entitled to directly select a controlling class representative. Notwithstanding the foregoing, until a series 2006-C7 controlling class representative is so selected in accordance with the preceding two sentences, or after receipt of a notice from the holders—or, if applicable, the beneficial owners—of series 2006-C7 certificates representing a majority of the voting rights allocated to the series 2006-C7 controlling class that a series 2006-C7 controlling class representative is no longer designated, any party identified to the trustee as beneficially owning more than 50% of the aggregate principal balance of the series 2006-C7 controlling class certificates will be the series 2006-C7 controlling class representative.

If the series 2006-C7 controlling class of certificates is held in book-entry form, then costs incurred in determining the identity of the series 2006-C7 controlling class representative may be an expense of the trust.

Designation of the Loan Combination Controlling Parties.    The Co-Lender Agreement for each Loan Combination (other than a MezzCap Loan Combination) provides for, or allows for, one or more particular holders of the mortgage loans comprising that Loan Combination or its or their designee or designees (as to that Loan Combination, the ‘‘Loan Combination Controlling Party’’) to provide advice and direction to the master servicer and/or the special servicer (or, with respect to an Outside Serviced Loan Combination, to provide advice and direction to the master servicer and special servicer under the related governing servicing agreement) with respect to various servicing actions regarding that Loan Combination, including as described below in this ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ section. The Loan Combination Controlling Party for each Loan Combination (other than a MezzCap Loan Combination) is identified under the subheading ‘‘—Co-Lender Agreement—Consent Rights’’ relating to such Loan Combination that appears under ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement.

Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders.    Neither the special servicer nor the master servicer (to the extent the master servicer is otherwise permitted to take such action under the series 2006-C7 pooling and servicing agreement) will, in general, be permitted to take (or, in the case of the special servicer, if and when applicable, consent to the master servicer’s taking), among others, any of the following actions under the series 2006-C7 pooling and servicing agreement with respect to the mortgage pool (exclusive of each underlying mortgage loan that is part of a Loan Combination other than a MezzCap Loan Combination), as to which action the series 2006-C7 controlling class representative has objected in writing within ten business days (or, in the case of certain of those actions, five business days) of having been notified in writing of the particular action and having been provided with all reasonably requested information with respect to the particular action—

•  any foreclosure upon or comparable conversion, which may include acquisitions of an REO Property, of the ownership of properties securing those specially serviced mortgage loans in the trust as come into and continue in default;

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•  any modification, extension, amendment or waiver of a monetary term (including the timing of payments, but excluding the waiver of Default Interest and late charges) (or, in the case of a non-specially serviced mortgage loan, a material monetary term) or any material non-monetary term (including any material term relating to insurance) of a mortgage loan in the trust;
•  any proposed sale of an REO Property in the trust, other than in connection with the termination of the trust as described under ‘‘Description of the Offered Certificates—Termination’’ in this prospectus supplement, for less than an amount approximately equal to the unpaid principal balance of the related mortgage loan, plus accrued interest (other than Default Interest and Post-ARD Additional Interest) thereon, plus any related unreimbursed servicing advances thereon, plus such other items set forth in the 2006-C7 pooling and servicing agreement;
•  any acceptance of a discounted payoff with respect to a specially serviced mortgage loan in the trust;
•  any determination to bring an REO Property, or the mortgaged real property securing a specially serviced mortgage loan, held by the trust into compliance with applicable environmental laws or to otherwise address hazardous materials located at that property;
•  any release of collateral for specially serviced mortgage loans other than any release of collateral that (a) is required by the terms of such mortgage loan (with no material discretion by the lender), (b) occurs upon satisfaction of such mortgage loan or (c) occurs in connection with a defeasance;
•  any release of a parcel of land with respect to a non-specially serviced mortgage loan in the trust (other than parcels that were not given value in the calculation of loan-to-value ratio in connection with the underwriting of such mortgage loan), other than any release of collateral that (a) is required by the terms of such mortgage loan (with no material discretion by the lender), (b) occurs upon satisfaction of such mortgage loan, (c) occurs in connection with a defeasance, or (d) may be approved by the master servicer in accordance with the series 2006-C7 pooling and servicing agreement;
•  any acceptance of substitute or additional collateral for a mortgage loan in the trust, other than any acceptance of substitute or additional collateral that (a) is required by the terms of such mortgage loan (with no material discretion by the lender), (b) occurs in connection with a defeasance, or (c) may be approved by the master servicer in accordance with the series 2006-C7 pooling and servicing agreement;
•  any acceptance of a change in the property management company or, if applicable, the hotel franchise for a mortgaged real property, in each case other than as required by the terms of the mortgage loan; provided that, in each case, there is no material discretion by the lender, and provided, further, that, with respect to a change in the property management company, the unpaid principal balance of such mortgage loan is greater than $5,000,000;
•  any waiver of a due-on-sale or due-on-encumbrance clause with respect to an underlying mortgage loan;
•  any determination by the special servicer not to maintain or cause a borrower to maintain for a mortgaged real property all-risk casualty or other insurance that provides coverage for acts of terrorism, despite the fact that such insurance may be required under the terms of the related underlying mortgage loan;
•  any acceptance of an assumption agreement releasing a borrower from liability under an underlying mortgage loan; and
•  any other actions as may be specified in the series 2006-C7 pooling and servicing agreement.

provided that, if the special servicer or the master servicer, as applicable, determines that failure to take such action would violate the Servicing Standard, then the special servicer or the master servicer, as applicable, may take (or, in the case of the special servicer, if and to the extent applicable, consent to the master servicer’s taking) any such action without waiting for the series 2006-C7 controlling class representative’s response.

In addition, the series 2006-C7 controlling class representative may direct the special servicer to take, or to refrain from taking, any actions with respect to the servicing and/or administration of any specially serviced mortgage loans and REO Properties in the trust—other than any such mortgage loans that are part of, and any such REO Properties that relate to, a Loan Combination—that the series 2006-C7 controlling class representative may consider advisable or as to which provision is otherwise made in the series 2006-C7 pooling and servicing agreement.

Similarly, neither the special servicer nor the master servicer (to the extent the master servicer is otherwise permitted to take such action under the series 2006-C7 pooling and servicing agreement) will be permitted to take (or, in case of the

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special servicer, if and when appropriate, to consent to the master servicer’s taking) any of the following actions (or, subject to the related Co-Lender Agreement, some subset of the following actions) under the series 2006-C7 pooling and servicing agreement with respect to a Serviced Loan Combination (other than a MezzCap Loan Combination), as to which action the related Loan Combination Controlling Party has objected within ten business days of having been notified thereof in writing and having been provided with all reasonably requested information with respect thereto:

•  any proposed foreclosure upon or comparable conversion, which may include acquisitions of an REO Property, of the related mortgaged real property and the other collateral securing the subject Loan Combination if it comes into and continues in default;
•  any modification, extension, amendment or waiver of a monetary term (including the timing of payments or the maturity date and any acceleration of the loan unless such acceleration is by its terms automatic under the related loan documents) or any material non-monetary term (including a material term relating to insurance) of a mortgage loan that is part of the subject Loan Combination;
•  any proposed sale of a related REO Property or any proposed sale of the loan other than in connection with the exercise of a fair value purchase option pursuant to the pooling and servicing agreement;
•  any acceptance of a discounted payoff or the forgiveness of any interest or principal payments of a mortgage loan that is part of the subject Loan Combination;
•  any determination to bring the related mortgaged real property (including if it is an REO Property) into compliance with applicable environmental laws or to otherwise address hazardous materials located at the related mortgaged real property;
•  any renewal or replacement of the then existing insurance policies to the extent that the renewal or replacement policy does not comply with the terms of the related loan documents or any waiver, modification or amendment of any insurance requirements under the related loan documents, in each case if lender’s approval is required by the related loan documents;
•  any adoption or approval of a plan in bankruptcy of the related borrower or similar event in a bankruptcy or similar proceeding;
•  any release of collateral for the subject Loan Combination (including, but not limited to, the termination or release of any reserves, escrows or letters of credit), other than in accordance with the terms of, or upon satisfaction of, the subject Loan Combination;
•  any acceptance of substitute or additional collateral for the subject Loan Combination or any release of the borrower or any guarantor, other than in accordance with the terms thereof;
•  any waiver of or determination to enforce or not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause with respect to the subject Loan Combination;
•  any acceptance of an assumption agreement releasing the related borrower from liability under the subject Loan Combination;
•  any approval of annual budgets, business plans, major leases, modifications to or terminations of major leases or a material capital expenditure, if lender’s approval is required by the related loan documents;
•  any replacement of the property manager or any proposed termination or material modification of the property management agreement, if lender’s approval is required by the related loan documents;
•  any approval of the transfer of the related mortgaged real property or interests in the related borrower or the incurrence of additional indebtedness secured by the related mortgaged real property or any mezzanine financing by any beneficial owner of the borrower, if lender’s approval is required by the related loan documents;
•  any modification to a ground lease or certain designated space leases;
•  any determination to apply casualty proceeds or condemnation awards toward repayment of a mortgage loan that is part of the subject Loan Combination rather than toward restoration of the related mortgaged real property;
•  any release, waiver or reduction of the amounts of escrows or reserves not expressly required by the terms of the related loan documents or under applicable law;

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•  the subordination of any lien created pursuant to the terms of the related loan documents;
•  any material alteration to the related mortgaged real property, to the extent the lender has approval rights with respect to such item in the related loan documents;
•  any proposed amendment to any single purpose entity provision of the related loan documents;
•  any determination by the master servicer that a Servicing Transfer Event that is based on imminent default has occurred with respect to a mortgage loan that is part of the subject Loan Combination; and
•  any proposed sale of the related mortgaged real property for less than the unpaid principal amount of the underlying mortgage loan that is part of the subject Loan Combination, accrued and unpaid interest thereon, all amounts required to be paid or reimbursed to the master servicer, special servicer and trustee under the series 2006-C7 pooling and servicing agreement and any unreimbursed realized losses allocated to the underlying mortgage loan that is part of the subject Loan Combination;

provided that, if the special servicer or the master servicer, as applicable, determines that immediate action is necessary to protect the interests of the series 2006-C7 certificateholders and the related Serviced Non-Trust Loan Noteholder(s), as a collective whole, then the special servicer or the master servicer (to the extent the master servicer is otherwise permitted to take such action under the series 2006-C7 pooling and servicing agreement), as applicable, may take (or, in the case of the special servicer, if and to the extent applicable, consent to the master servicer’s taking) any such action without waiting for the related Loan Combination Controlling Party’s response.

In addition, the related Loan Combination Controlling Party may direct the special servicer and/or the master servicer, as applicable, to take, or refrain from taking, any actions with respect to a Serviced Loan Combination (other than a MezzCap Loan Combination) that such Loan Combination Controlling Party may consider consistent with the related Co-Lender Agreement or as to which provision is otherwise made in the related Co-Lender Agreement.

Notwithstanding the foregoing, no advice, direction or objection given or made by the series 2006-C7 controlling class representative or by the Loan Combination Controlling Party for any Serviced Loan Combination, as contemplated by any of the foregoing paragraphs in this ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ subsection, may require or cause the special servicer or master servicer, as applicable, to violate (a) any other provision of the series 2006-C7 pooling and servicing agreement described in this prospectus supplement or the accompanying base prospectus, including the obligation of that servicer to act in accordance with the Servicing Standard, (b) the related mortgage loan documents, including any applicable co-lender and/or intercreditor agreements, or (c) applicable law, including the REMIC provisions of the Internal Revenue Code; and that servicer is to ignore any such advice, direction or objection that would cause such a violation. Also notwithstanding the foregoing, in the case of the Extendicare Portfolio Loan Combination, if the holders of the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan— or their respective representatives—have not, within the requisite time period provided for in the related Co-Lender Agreement, executed a mutual consent with respect to any advice, consent or direction regarding a specified servicing action, the special servicer or master servicer, as applicable, will implement the servicing action that it deems to be in accordance with the Servicing Standard, and the decision of the special servicer or the master servicer, as applicable, will be binding on all such parties.

Furthermore, the special servicer will not be obligated to seek approval from the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, as applicable, for any actions to be taken by the special servicer with respect to the workout or liquidation of any particular specially serviced mortgage loan in the trust or any Serviced Loan Combination that is being specially serviced under the series 2006-C7 pooling and servicing agreement if—

•  the special servicer has, as described above, notified the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, as the case may be, in writing of various actions that the special servicer proposes to take with respect to the workout or liquidation of that mortgage loan or that Loan Combination, and
•  for 60 days following the first of those notices, the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, as the case may be, has objected to all of those proposed actions and has failed to suggest any alternative actions that the special servicer considers to be consistent with the Servicing Standard.

Furthermore, during the time that the series 2006-C7 controlling class representative is not the related Loan Combination Controlling Party with respect to the Triangle Town Center Loan Combination, the series 2006-C7 controlling class representative may have certain consultation rights with respect to the servicing thereof.

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In the case of a MezzCap Loan Combination, the related Serviced Non-Trust Loan Noteholder may exercise certain approval rights relating to a deferral, modification, supplement or waiver of the related underlying mortgage loan or the related Serviced Non-Trust Loan that materially and adversely affects the related Serviced Non-Trust Loan Noteholder prior to the expiration of the repurchase period described under ‘‘Description of the Mortgage Pool—The Loan Combinations —The MezzCap Loan Combinations’’ in this prospectus supplement.

With respect to the 1211 Avenue of the Americas Loan Combination, the provisions of the series 2006-C6 pooling and servicing agreement and the 1211 Avenue of the Americas Co-Lender Agreement relating to the rights and powers of the related Loan Combination Controlling Party are similar but not identical to those described above with respect to the Serviced Loan Combinations in this ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ section. Also notwithstanding the foregoing, in the case of the 1211 Avenue of the Americas Loan Combination, if the holders of the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan—or their respective representatives—have not, within the requisite time period provided for in the related Co-Lender Agreement, executed a mutual consent with respect to any advice, consent or direction regarding a specified servicing action, the series 2006-C6 special servicer or the series 2006-C6 master servicer, as applicable, will implement the servicing action that it deems to be in accordance with the applicable servicing standard, and the decision of the series 2006-C6 special servicer or the series 2006-C6 master servicer, as applicable, will be binding on all such parties.

With respect to the Triangle Town Center Loan Combination, the provisions of the series 2006-C1 pooling and servicing agreement and the Triangle Town Center Co-Lender Agreement relating to the rights and powers of the related Loan Combination Controlling Party are similar but not identical to those described above with respect to the Serviced Loan Combinations in this ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ section.

Limitation on Liability of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders.    The series 2006-C7 controlling class representative will not be liable to the trust or the series 2006-C7 certificateholders for any action taken, or for refraining from the taking of any action, or for errors in judgment; except that the series 2006-C7 controlling class representative will not be protected against any liability to a series 2006-C7 controlling class certificateholder which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties. Each series 2006-C7 certificateholder acknowledges and agrees, by its acceptance of its series 2006-C7 certificates, that:

•  the series 2006-C7 controlling class representative may have special relationships and interests that conflict with those of the holders of one or more classes of the series 2006-C7 certificates;
•  the series 2006-C7 controlling class representative may act solely in the interests of the holders of the series 2006-C7 controlling class;
•  the series 2006-C7 controlling class representative does not have any duties or liability to the holders of any class of series 2006-C7 certificates other than the series 2006-C7 controlling class;
•  the series 2006-C7 controlling class representative may take actions that favor the interests of the holders of the series 2006-C7 controlling class over the interests of the holders of one or more other classes of series 2006-C7 certificates;
•  the series 2006-C7 controlling class representative will not be deemed to have been negligent or reckless, or to have acted in bad faith or engaged in willful misconduct, by reason of its having acted solely in the interests of the holders of the series 2006-C7 controlling class; and
•  the series 2006-C7 controlling class representative will have no liability whatsoever for having acted solely in the interests of the holders of the series 2006-C7 controlling class, and no series 2006-C7 certificateholder may take any action whatsoever against the series 2006-C7 controlling class representative for having so acted.

A Serviced Non-Trust Loan Noteholder or its designee, in connection with exercising the rights and powers described under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above with respect to a Serviced Loan Combination will be entitled to substantially the same limitations on liability to which the series 2006-C7 controlling class representative is entitled.

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Additional Rights of the Non-Trust Loan Noteholders; Right to Purchase and Right to Cure Defaults.

Right to Purchase.    With respect to the Reston Town Center Loan Combination, if and for so long as such Loan Combination is specially serviced and, further, upon any monthly debt service payment with respect to that Loan Combination becoming at least 60 days delinquent, then the holder of the Reston Town Center Non-Trust Loan has the option to purchase the Reston Town Center Mortgage Loan, as further described under ‘‘Description of the Mortgage Pool—Loan Combinations —Reston Town Center Loan Combination—Co-Lender Agreement—Purchase Option’’ in this prospectus supplement.

With respect to each of the MezzCap Loan Combination, upon the occurrence of any one of certain defaults that are set forth in the related Co-Lender Agreement, the holder of the related Serviced Non-Trust Loan will have the right to purchase the underlying mortgage loan, as further described under ‘‘Description of the Mortgage Pool—Loan Combinations—The MezzCap Loan Combinations—Purchase Option’’ in this prospectus supplement.

Right to Cure Defaults. With respect to the Reston Town Center Mortgage Loan, the Reston Town Center Non-Trust Loan Noteholder will have an assignable right to cure certain events of default with respect to the Reston Town Center Mortgage Loan, as further described under ‘‘Description of the Mortgage Pool—Loan Combinations—The Reston Town Center Loan Combination—Co-Lender Agreement—Cure Rights’’ in this prospectus supplement.

Triangle Town Center Loan Combination Purchase Option and Cure Rights

Right to Purchase.    The series 2006-C7 controlling class representative will be entitled to purchase (solely for its own account and not on behalf of, or with funds from, the trust) each of the Triangle Town Center Senior Non-Trust Loans (together only), if and for so long as the Triangle Town Center Loan Combination is specially serviced and, further, upon any monthly debt service payment with respect to that Loan Combination becoming at least 60 days delinquent, as and under the circumstances further described under ‘‘Description of the Mortgage Pool—Loan Combinations—The Triangle Town Center Loan Combination—Co-Lender Agreement—Purchase Option’’ in this prospectus supplement.

Right to Cure.    The series 2006-C7 controlling class representative will have an assignable right, but not the obligation, to cure (solely with funds from its own account and not on behalf of, or with funds from, the trust) a monetary default or a default susceptible to cure by the payment of money that is not cured within the applicable grace period, with respect to the both of the Triangle Town Center Senior Non-Trust Loans, as and under the circumstances further described under ‘‘Description of the Mortgage Pool—Loan Combinations—The Triangle Town Center Loan Combination—Co-Lender Agreement—Cure Rights’’ in this prospectus supplement.

Replacement of the Special Servicer

Subject to the discussion below in this ‘‘—Replacement of the Special Servicer’’ section, series 2006-C7 certificateholders entitled to a majority of the voting rights allocated to the series 2006-C7 controlling class may—

•  terminate an existing special servicer with or without cause, and
•  appoint a successor to any special servicer that has resigned or been terminated.

Any termination of an existing special servicer and/or 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 any class of the series 2006-C7 certificates, and
2.  the written agreement of the proposed special servicer to be bound by the terms and conditions of the series 2006-C7 pooling and servicing agreement, together with an opinion of counsel regarding, among other things, the enforceability of the series 2006-C7 pooling and servicing agreement against the proposed special servicer.

In connection with the foregoing right of the series 2006-C7 certificateholders entitled to a majority of the voting rights allocated to the series 2006-C7 controlling class to replace the special servicer, those series 2006-C7 certificateholders may be required to consult with one or more of the related Serviced Non-Trust Loan Noteholders with respect to each Serviced Loan Combination (other than a MezzCap Loan Combination) prior to appointing a replacement special servicer; provided that those series 2006-C7 certificateholders may, in their sole discretion, reject any advice provided by any such Serviced Non-Trust Loan Noteholder.

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If the controlling class of series 2006-C7 certificates is held in book-entry form and confirmation of the identities of the related beneficial owners has been provided to the trustee, then the beneficial owners entitled to a majority of the voting rights allocated to the series 2006-C7 controlling class will be entitled to directly replace an existing special servicer and appoint a successor, in the manner described above.

If the special servicer is terminated or replaced or resigns, the outgoing special servicer will be required to cooperate with the trustee and the replacement special servicer in effecting the termination of the outgoing special servicer’s responsibilities and rights under the series 2006-C7 pooling and servicing agreement, including the transfer within two business days to the replacement special servicer for administration by it of all cash amounts that are at the time credited or should have been credited by the outgoing special servicer to a custodial account, a servicing account, a reserve account or an REO account or should have been delivered to the master servicer or that are thereafter received with respect to specially serviced mortgage loans and administered REO Properties. The trustee is required to notify the other parties to the series 2006-C7 pooling and servicing agreement, the certificateholders and the Serviced Non-Trust Loan Noteholders of any termination of the special servicer and appointment of a new special servicer.

Any costs and expenses incurred in connection with the removal of a special servicer (without cause) and the appointment of a successor thereto, as described above, that are not paid by the replacement special servicer will be payable by the holders or beneficial owners entitled to a majority of the voting rights allocated to the series 2006-C7 controlling class. Any costs and expenses incurred in connection with the removal of a special servicer (with cause) and appointment of a successor thereto, as described above, will be payable by the terminated special servicer and, if not paid by the terminated special servicer, will constitute an Additional Trust Fund Expense.

The series 2006-C7 controlling class representative will, subject to the conditions set forth below in this paragraph, have a similar right to terminate, appoint or replace the special servicer responsible with respect to the Triangle Town Center Loan Combination. If and for so long as the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan is the related Loan Combination Controlling Party, (i) the series 2006-C7 controlling class representative (as designee of the related Loan Combination Controlling Party) may terminate an existing series 2006-C1 special servicer under the series 2006-C1 pooling and servicing agreement with respect to, but solely with respect to, the Triangle Town Center Loan Combination, with or without cause, and appoint a successor to any such special servicer with respect to, but solely with respect to, the Triangle Town Center Loan Combination that has resigned or been terminated, subject to receipt by the series 2006-C1 trustee of items similar to those described in clauses (1) and (2) of the second paragraph under this ‘‘—Replacement of the Special Servicer’’ section, and (ii) the majority holders of the series 2006-C1 controlling class certificates cannot terminate a special servicer appointed by the related Loan Combination Controlling Party with respect to the Triangle Town Center Loan Combination, without cause.

With respect to the Reston Town Center Loan Combination, the Reston Town Center Non-Trust Loan Noteholder may terminate an existing special servicer with respect to, but solely with respect to, the Reston Town Center Loan Combination, with or without cause, and appoint a successor to any special servicer with respect to, but solely with respect to, the Reston Town Center Loan Combination that has resigned or been terminated, subject to, among other things, receipt by the trustee of the items described in clauses (1) and (2) of the second paragraph under this ‘‘—Replacement of the Special Servicer’’ section; provided that the Reston Town Center Non-Trust Loan Noteholder will cease to be able to replace the special servicer if it is no longer the related Loan Combination Controlling Party.

If the special servicer for any Serviced Loan Combination is different from the special servicer for the rest of the mortgage loans serviced under the series 2006-C7 pooling and servicing agreement, then (unless the context indicates otherwise) all references to the special servicer in this prospectus supplement and the accompanying base prospectus are intended to mean the applicable special servicer or all special servicers together, as appropriate in light of the circumstances.

Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions

Subject to the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above, the special servicer, in accordance with the series 2006-C7 pooling and servicing agreement, will be required to determine, in a manner consistent with the Servicing Standard, whether to exercise any right the lender under any underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) and any Serviced Non-Trust Loan may have under either a due-on-sale or due-on-encumbrance clause to accelerate payment of that mortgage loan. However, subject to the related loan documents and applicable law, the special servicer may not waive its rights or grant its consent under any such due-on-sale or due-on-encumbrance clause, unless either (a) written confirmation has been received from each of S&P and Fitch that this action would not result in the qualification, downgrade or withdrawal of any of the ratings

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then assigned by that rating agency to any class of series 2006-C7 certificates, or (b) such confirmation of ratings is not necessary because of the satisfaction of such criteria, including the size of the subject mortgage loan being below any minimum threshold, as may be established by those rating agencies and set forth in the series 2006-C7 pooling and servicing agreement.

Notwithstanding the foregoing, with respect to an Outside Serviced Trust Mortgage Loan, the master servicer and special servicer for the related Outside Serviced Loan Combination will be responsible for enforcing or waiving the mortgagee’s rights under any due-on-encumbrance or due-on-sale clause in a manner consistent with that described above.

Modifications, Waivers, Amendments and Consents

In general, except as described below and in certain other limited matters, the master servicer will not be permitted to agree to waive, modify or amend any term of any underlying mortgage loan or Serviced Non-Trust Loan. The special servicer, subject to the limitations described below in this ‘‘—Modifications, Waivers, Amendments and Consents’’ section, will generally be responsible for any material waivers, modifications or amendments of any mortgage loan documents for the underlying mortgage loans (other than the Outside Serviced Trust Mortgage Loans) and the Serviced Non-Trust Loans.

The series 2006-C7 pooling and servicing agreement will generally provide that, with respect to any mortgage loan (other than an Outside Serviced Trust Mortgage Loan) in the trust that is not specially serviced, subject to the rights of the special servicer and the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Non-Trust Loan Noteholders’’ above, and further subject to obtaining any rating confirmations required under the series 2006-C7 pooling and servicing agreement, the master servicer will be responsible for any request by a borrower for lender consent to certain modifications, waivers or amendments, as specified in the series 2006-C7 pooling and servicing agreement, including, without limitation—

•  approving routine leasing activity, including any subordination, standstill and attornment agreements, with respect to any lease for less than the lesser of 20,000 square feet and 20% of the related mortgaged real property,
•  approving a change of the property manager at the request of the related borrower, provided that (A) the successor property manager is not affiliated with the related borrower and is a nationally or regionally recognized manager of similar properties, (B) the mortgage loan does not have an outstanding principal balance in excess of $5,000,000 and (C) the related mortgaged real property does not secure a Loan Combination,
•  approving any waiver affecting the timing of receipt of financial statements from the related borrower, provided that such financial statements are delivered no less than quarterly and within 60 days of the end of the calendar quarter,
•  approving annual budgets for the related mortgaged real property, provided, that no such budget (A) provides for the payment of operating expenses in an amount equal to more than 110% of the amounts budgeted therefor for the prior year or (B) provides for the payment of any material expenses to any affiliate of the related borrower other than the payment of a management fee to any property manager if such management fee is no more than the management fee in effect on the cut-off date,
•  subject to the restrictions set forth in the series 2006-C7 pooling and servicing agreement regarding principal prepayments, waiving any provision of the mortgage loan requiring a specified number of days notice prior to a principal prepayment,
•  approving modifications, consents or waivers (subject to certain limitations) in connection with a defeasance permitted by the terms of the mortgage loan if the master servicer receives an opinion of independent counsel generally to the effect that such modification, waiver or consent would not cause any REMIC created under the series 2006-C7 pooling and servicing agreement to fail to qualify as such under the Internal Revenue Code or result in a tax on ‘‘prohibited transaction’’ being imposed on the trust assets, and
•  consent to subject the related mortgaged real property to an easement or right-of-way for utilities, access, parking, public improvements or another purpose, and may consent to subordination of the mortgage loan to such easement or right-of way provided the master servicer has determined in accordance with the Servicing Standard that such easement or right-of-way does not materially interfere with the then-current use of the related mortgaged real property, or the security intended to be provided by the related mortgage instrument, the related borrower’s ability to repay the mortgage loan, or materially or adversely affect the value of the related mortgaged real property or cause the mortgage loan to cease to be a ‘‘qualified mortgage’’ for REMIC purposes;

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provided that—

1.  any such modification, waiver or amendment would not in any way affect a payment term (including, subject to certain exceptions, a waiver of the payment of assumption fees) of the mortgage loan, other than in the case of a waiver of the payment of late payment charges and/or Default Interest,
2.  agreeing to such modification, waiver or amendment would be consistent with the Servicing Standard,
3.  agreeing to such modification, waiver or amendment will not violate the terms, provisions or limitations of the series 2006-C7 pooling and servicing agreement, and
4.  any such modification, waiver or amendment does not materially violate the terms, conditions and limitations set forth in the series 2006-C7 pooling and servicing agreement relating to the enforcement of the mortgagee’s rights in connection with any transfer of the related mortgaged real property or interests in the related borrower or the incurrence of additional indebtedness secured by the related mortgaged real property or any mezzanine financing by any beneficial owner of the related borrower, if applicable.

With respect to any action proposed to be taken by the master servicer under the preceding paragraph where any thresholds in the bullets of the preceding paragraph are exceeded, or which cannot be taken by the master servicer by reason of any of provisos (1) to (4) set out in the preceding paragraph, such action may only be taken by the special servicer, if and to the extent permitted by the series 2006-C7 pooling and servicing agreement. Without limiting the generality of the foregoing, any request for disbursement or funding to a related borrower of previously unfunded, escrowed or otherwise reserved portions of the loan proceeds of any mortgage loan must be submitted to the special servicer for approval.

Furthermore, none of the trustee, the master servicer or the special servicer, as applicable, may give any consent, approval or direction regarding the termination of the related property manager or the designation of any replacement property manager or, if the related mortgaged real property is a hospitality property, give any consent, approval or direction regarding the termination of the franchise or the designation of a new franchise, with respect to any mortgaged real property that secures a mortgage loan in the trust with an unpaid principal balance that is at least equal to the lesser of $20,000,000 and 2% of the then aggregate principal balance of the mortgage pool, unless: (1) the mortgagee is not given discretion under the terms of the related mortgage loan to withhold its consent; or (2) it has received prior written confirmation from each of S&P and Fitch that such action will not result in the qualification, downgrade or withdrawal of any of the ratings then assigned by that rating agency to any class of the series 2006-C7 certificates.

The series 2006-C7 pooling and servicing agreement will permit the special servicer to modify, extend, waive or amend any term of any mortgage loan serviced thereunder if that modification, extension, waiver or amendment:

•  is consistent with the Servicing Standard, and
•  except under the circumstances described below or as otherwise described under ‘‘—Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions’’ above and/or ‘‘—Maintenance of Insurance’’ below, will not—
1.  affect the amount or timing of any scheduled payments of principal, interest or other amounts, including prepayment premiums and yield maintenance charges, but excluding Default Interest and, with some limitations, other amounts constituting additional servicing compensation, payable under the mortgage loan,
2.  affect the obligation of the related borrower to pay a prepayment premium or yield maintenance charge or permit a principal prepayment during the applicable prepayment lock-out period,
3.  except as expressly provided by the related mortgage instrument 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 instrument on any material portion of that property without a corresponding principal prepayment, or
4.  in the special servicer’s judgment, materially impair the security for the mortgage loan or reduce the likelihood of timely payment of amounts due on the mortgage loan.

Notwithstanding the second bullet of the preceding paragraph, but subject to the following paragraph and the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above, the special servicer may—

•  reduce the amounts owing under any specially serviced mortgage loan by forgiving principal, accrued interest, including Post-ARD Additional Interest, and/or any prepayment premium or yield maintenance charge,

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•  reduce the amount of the monthly debt service 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, mortgage instrument or other loan document relating to a specially serviced mortgage loan,
•  accept a principal prepayment on a specially serviced mortgage loan during any prepayment lock-out period, or
•  subject to the limitations described in the following paragraph, extend the maturity date of a specially serviced mortgage loan;

provided that—

1.  the related borrower is in monetary default or material non-monetary default with respect to the specially serviced mortgage loan or, in the judgment of the special servicer, that default is reasonably foreseeable,
2.  in the judgment of the special servicer, that modification, extension, waiver or amendment would increase the recovery to the series 2006-C7 certificateholders (or, if a Serviced Loan Combination is involved, to the series 2006-C7 certificateholders and the related Serviced Non-Trust Loan Noteholder(s)), as a collective whole, on a present value basis,
3.  that modification, extension, waiver or amendment does not result in a tax on ‘‘prohibited transactions’’ or ‘‘contributions’’ being imposed on the trust after the startup day under the REMIC provisions of the Internal Revenue Code or cause any REMIC or grantor trust created pursuant to the series 2006-C7 pooling and servicing agreement to fail to qualify as such under the Internal Revenue Code, and
4.  the subject mortgage loan is not an Outside Serviced Trust Mortgage Loan.

In no event, however, will the special servicer be permitted to:

•  extend the maturity date of a mortgage loan beyond a date that is two years prior to the last rated final distribution date;
•  extend the maturity date of a mortgage loan for more than five years beyond its original maturity date; or
•  if the mortgage loan is secured solely or primarily by a lien on a ground lease, but not by the related fee interest, extend the maturity date of that mortgage loan beyond the date that is 20 years or, to the extent consistent with the Servicing Standard, giving due consideration to the remaining term of the ground lease, ten years, prior to the end of the term of that ground lease.

The master servicer will be permitted, with the special servicer’s consent, to waive any or all Post-ARD Additional Interest accrued on an ARD Loan, if—

•  that ARD Loan is not being specially serviced,
•  prior to the related maturity date, the related borrower has requested the right to prepay the mortgage loan in full, together with all payments required by the related loan documents in connection with the prepayment except for all or a portion of that Post-ARD Additional Interest, and
•  the master servicer has determined that the waiver of all or a portion of that Post-ARD Additional Interest would result in a greater recovery to the series 2006-C7 certificateholders, as a collective whole, on a present value basis, than not waiving it.

The master servicer will not have any liability to the trust, the series 2006-C7 certificateholders or any other person for the determination referred to in the third bullet of the preceding sentence if it is made in accordance with the Servicing Standard. The series 2006-C7 pooling and servicing agreement will also limit the master servicer’s and the special servicer’s ability to institute an enforcement action solely for the collection of Post-ARD Additional Interest.

In the case of a MezzCap Loan Combination, the related Serviced Non-Trust Loan Noteholder may exercise certain approval rights relating to a deferral, modification, supplement or waiver of the related underlying mortgage loan or the related Serviced Non-Trust Loan that materially and adversely affects the related Serviced Non-Trust Loan Noteholder prior to the expiration of the repurchase period described under ‘‘Description of the Mortgage Pool—The Loan Combinations —The MezzCap Loan Combination—Consent Rights’’ in this prospectus supplement.

Any modification, extension, waiver or amendment of the payment terms of a Serviced Loan Combination will be required to be structured so as to be reasonably consistent with the allocation and payment priorities in the related loan

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documents and the related co-lender or similar agreement, such that neither the trust as holder of the subject underlying mortgage loan, on the one hand, nor the related Serviced Non-Trust Loan Noteholder, on the other hand, gains a priority over the other that is not reflected in the related loan documents and the related Co-Lender Agreement.

Further, with respect to the Reston Town Center Loan Combination, to the extent consistent with the Servicing Standard, taking into account the subordinate position of the related Serviced Non-Trust Loan:

•  no waiver, reduction or deferral of any amounts due on the underlying mortgage loan in such Loan Combination will be effected prior to the waiver, reduction or deferral of the entire corresponding item in respect of the related Serviced Non-Trust Loan; and
•  no reduction of the mortgage interest rate of the underlying mortgage loan in such Loan Combination may be effected prior to the reduction of the mortgage interest rate of the related Serviced Non-Trust Loan, to the fullest extent possible.

The special servicer and master servicer will each be required to notify the trustee of any modification, waiver or amendment of any term of any underlying mortgage loan agreed to by it, and to deliver to the trustee, for deposit in the related mortgage file, an original counterpart of the agreement relating to that modification, waiver or amendment promptly following its execution. Upon reasonable prior written notice to the trustee, copies of each agreement by which any modification, waiver or amendment of any term of any mortgage loan is effected are required to be available for review during normal business hours at the offices of the trustee. See ‘‘Description of the Offered Certificates—Reports to Certificateholders; Available Information’’ in this prospectus supplement.

Notwithstanding the foregoing, (a) the master servicer and special servicer for the Series 2006-C6 Securitization will be responsible for entering into any modifications or amendments and for granting any waivers or consents with respect to the 1211 Avenue of the Americas Loan Combination and (b) the master servicer and special servicer for the Series 2006-C1 Securitization will be responsible for entering into any modifications or amendments and for granting any waivers or consents with respect to the Triangle Town Center Loan Combination, in each case under terms and conditions similar to those described above in this ‘‘—Modifications, Waivers, Amendments and Consents’’ section.

Defense of Litigation

The series 2006-C7 pooling and servicing agreement will provide that the special servicer will (1) direct, manage, prosecute and/or defend any action brought by a borrower against the trust and/or the special servicer and (2) represent the interests of the trust in any litigation relating to the rights and obligations of the borrower or mortgagee, or the enforcement of the obligations of a borrower, under the loan documents for any underlying mortgage loan (‘‘Trust-Related Litigation’’).

To the extent the master servicer is named in Trust-Related Litigation, and the trust or special servicer is not named, in order to effectuate the role of the special servicer as contemplated by the prior paragraph, the master servicer must (1) notify the special servicer of such Trust-Related Litigation within ten days of the master servicer receiving notice of such Trust-Related Litigation; (2) provide monthly status reports to the special servicer, regarding such Trust-Related Litigation; (3) seek to have the trust replace the master servicer as the appropriate party to the lawsuit; and (4) so long as the master servicer remains a party to the lawsuit, consult with and act at the direction of the special servicer with respect to decisions and resolutions related to the interests of the trust in such Trust-Related Litigation, including but not limited to the selection of counsel, provided however, if there are claims against the master servicer and the master servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the master servicer.

Notwithstanding the right of the special servicer to represent the interests of the trust in Trust-Related Litigation, and subject to the rights of the special servicer to direct the master servicer’s actions as described in the next paragraph, the master servicer will retain the right to make determinations relating to claims against the master servicer, including but not limited to the right to engage separate counsel in the master servicer’s reasonable discretion, the cost of which shall be subject to indemnification out of trust assets. Further, the master servicer will not be required to take or fail to take any action which, in the master servicer’s good faith and reasonable judgment, may (1) result in an adverse REMIC event or adverse grantor trust event with respect to the trust or (2) subject the master servicer to liability or materially expand the scope of the master servicer’s obligations under the series 2006-C7 pooling and servicing agreement.

Notwithstanding any right of the master servicer to make determinations relating to claims against it, the special servicer will have the right at any time to (1) direct the master servicer to settle any claims brought against the trust, including claims asserted against the master servicer (whether or not the trust or the special servicer is named in any such claims or

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Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the master servicer relating to claims against the master servicer (whether or not the trust or the special servicer is named in any such claims or Trust-Related Litigation), provided in either case that (a) such settlement or other direction does not require any admission, or is not likely to result in a finding of liability or wrongdoing on the part of the master servicer, (b) the cost of such settlement or any resulting judgment is and will be paid by the trust, (c) the master servicer is and will be indemnified out of trust assets for all costs and expenses of the master servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (d) any such action taken by the master servicer at the direction of the special servicer will be deemed, as to the master servicer, to be in compliance with the Servicing Standard and (e) the special servicer provides the master servicer with assurance reasonably satisfactory to the master servicer as to the items in clauses (a), (b) and (c).

In the event both the master servicer and the special servicer or trust are named in litigation, the master servicer and the special servicer must cooperate with each other to afford the master servicer and the special servicer the rights afforded to such party as described in this ‘‘—Defense of Litigation’’ section.

The discussion in this ‘‘—Defense of Litigation’’ section will not apply in the event the special servicer authorizes the master servicer, and the master servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the trust.

The foregoing rights of the special servicer to direct, manage, prosecute and/or defend any Trust Related Litigation may be, as and to the extent provided in the series 2006-C7 pooling and servicing agreement, subject to the consent and/or direction of the series 2006-C7 controlling class representative.

Notwithstanding the foregoing, (a) in the event that any action, suit, litigation or proceeding names the trustee in its individual capacity, or in the event that any judgment is rendered against the trustee in its individual capacity, the trustee, upon prior written notice to the master servicer or the special servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests; provided that the master servicer or special servicer, as applicable, will retain the right to manage and direct any such action, suit, litigation or proceeding; (b) in the event of any action, suit, litigation or proceeding other than an action, suit, litigation or proceeding, relating to the enforcement of the obligations of a borrower under the related loan documents, neither the master servicer nor the special servicer may, without the prior written consent of the trustee, (i) initiate any action, suit, litigation or proceeding in the name of the trustee, whether in such capacity or individually, (ii) engage counsel to represent the trustee, or (iii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with intent to cause, and that actually causes, the trustee to be registered to do business in any state; and (c) in the event that any court finds that the trustee is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from the series 2006-C7 pooling and servicing agreement or any mortgage loan, the trustee will have the right to retain counsel and appear in any such proceedings on its own behalf in order to protect and represent its interests, whether as trustee or individually; provided that the master servicer or the special servicer, as applicable, will retain the right to manage and direct any such action, suit, litigation or proceeding.

Required Appraisals

Within a specified number of days after the date on which any Appraisal Trigger Event has occurred with respect to any of the underlying mortgage loans (other than an Outside Serviced Trust Mortgage Loan), the special servicer must obtain, and deliver to the trustee a copy of, an appraisal of the related mortgaged real property, from an independent appraiser meeting the qualifications imposed in the series 2006-C7 pooling and servicing agreement, unless an appraisal had previously been obtained within the prior 12 months and the special servicer believes, in accordance with the Servicing Standard, there has been no subsequent material change in the circumstances surrounding that property that would draw into question the applicability of that appraisal. Notwithstanding the foregoing, if the Stated Principal Balance of the subject mortgage loan is less than $2,000,000, the special servicer may perform an internal valuation of the mortgaged real property instead of obtaining an appraisal. Also notwithstanding the foregoing, if the portion of the Stated Principal Balance of the subject mortgage loan that has been allocated to any particular mortgaged real property, assuming there is more than one mortgaged real property securing the related mortgage loan, is less than $2,000,000, the special servicer may perform an internal valuation of the particular mortgaged real property instead of obtaining an appraisal.

As a result of any appraisal or other valuation, it may be determined that an Appraisal Reduction Amount exists with respect to the subject mortgage loan or, if applicable, the subject Loan Combination. An Appraisal Reduction Amount is relevant to: (a) the determination of the amount of any advances of delinquent interest required to be made with respect to the affected underlying mortgage loan; and (b) in the case of a Serviced Loan Combination (other than the Extendicare

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Portfolio Loan Combination and the MezzCap Loan Combinations), the determination of the identity of the related Loan Combination Controlling Party. See ‘‘Description of the Series 2006-C7 Pooling and Servicing Agreement—Advances— Advances of Delinquent Monthly Debt Service Payments’’ and ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above. The Appraisal Reduction Amount for any mortgage loan or Loan Combination serviced under the series 2006-C7 pooling and servicing agreement will be determined following either—

•  the occurrence of the Appraisal Trigger Event, if no new appraisal or estimate is required or obtained, or
•  the receipt of a new appraisal or estimate, if one is required and obtained,

and on a monthly basis thereafter until satisfaction of the conditions described in the bullets to the next paragraph.

If an Appraisal Trigger Event occurs with respect to any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan), then the special servicer will have an ongoing obligation to obtain or perform, as applicable, on or about 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, except in the case of a mortgage loan as to which the Appraisal Trigger Event was the expiration of five years following the initial extension of its maturity, if and when—

•  if the subject mortgage loan had become a specially serviced mortgage loan, it has become a worked-out mortgage loan as contemplated under ‘‘—General’’ above,
•  the subject mortgage loan has remained current for at least three consecutive monthly debt service payments, and
•  no other Appraisal Trigger 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 request of the special servicer, and will be reimbursable to the master servicer as a servicing advance.

At any time that an Appraisal Reduction Amount exists with respect to any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan) or, if applicable, any Serviced Loan Combination, the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, as applicable, under the series 2006-C7 pooling and servicing agreement, will be entitled, at its own expense, to obtain and deliver to the master servicer, the special servicer and the trustee an appraisal reasonably satisfactory to the special servicer. Upon request of the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, as the case may be, the special servicer will be required to recalculate the Appraisal Reduction Amount with respect to the subject mortgage loan(s) based on that appraisal and to report the recalculated Appraisal Reduction Amount to the master servicer.

Subject to the Servicing Standard, the special servicer will be permitted, but not obligated, to adjust downward (but not upward) the value of any mortgaged real property as reflected in an appraisal obtained by it.

Notwithstanding the foregoing, (a) any Appraisal Reduction Amounts with respect to the 1211 Avenue of the Americas Loan Combination will be determined based upon appraisals obtained in accordance with the series 2006-C6 pooling and servicing agreement, and (b) any Appraisal Reduction Amounts with respect to the Triangle Town Center Loan Combination will be determined based upon appraisals obtained in accordance with the series 2006-C1 pooling and servicing agreement, in each case on terms similar to those described above, and each such determination will affect the amount of any advances of delinquent interest required to be made on the 1211 Avenue of the Americas Loan Combination or the Triangle Town Center Subordinate Tranche Mortgage Loan, as applicable, and may affect the identity of the Loan Combination Controlling Party for the Triangle Town Center Loan Combination.

Maintenance of Insurance

The series 2006-C7 pooling and servicing agreement will require the master servicer to use reasonable efforts, consistent with the Servicing Standard, to cause to be maintained for each mortgaged real property (other than a mortgaged real property with respect to an Outside Serviced Loan Combination) that is not an REO Property all insurance coverage as is required under the related underlying mortgage loan. In addition, the master servicer will generally be required to cause to be maintained any such insurance that the related borrower is required (but fails) to maintain, but only to the extent that (a) the trust has an insurable interest and (b) the subject insurance is available at a commercially reasonable rate.

Notwithstanding the foregoing, neither the master servicer nor the special servicer, as applicable, will be required to maintain or cause a borrower to maintain for a mortgaged real property all-risk casualty or other insurance that provides

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coverage for acts of terrorism, despite the fact that such insurance may be required under the terms of the related underlying mortgage loan, in the event that the special servicer determines, based on due inquiry in accordance with the Servicing Standard (subject to any required consent of the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, in each case if and as applicable) that such insurance (a) is not available at commercially reasonable rates and such hazards are not commonly insured against at the time for properties similar to the subject mortgaged real property and located in and around the region in which the subject mortgaged real property is located or (b) is not available at any rate.

The related Loan Combination Controlling Party, in the case of a mortgaged real property that secures a Serviced Loan Combination (other than a MezzCap Loan Combination), or the series 2006-C7 controlling class representative, otherwise, may request that earthquake insurance be secured for one or more mortgaged real properties by the related borrower, to the extent that (a) insurance may be obtained at a commercially reasonable price and (b) the related mortgage loan requires the borrower to obtain earthquake insurance at the mortgagee’s request.

The series 2006-C7 pooling and servicing agreement will require the special servicer, consistent with the Servicing Standard, to cause to be maintained for each REO Property (other than an REO Property relating to an Outside Serviced Loan Combination) no less insurance coverage than was previously required of the applicable borrower under the related mortgage loan, but only if and to the extent that (a) such insurance is available at a commercially reasonable rate and (b) the subject hazards are at the time commonly insured against for properties similar to the subject REO Property and located in or around the region in which such REO Property is located, except that in the case of insurance coverage for acts of terrorism, the special servicer may be required to obtain that insurance at rates that may not be considered commercially reasonable.

If either the master servicer or the special servicer obtains and maintains a blanket policy or master force placed policy insuring against hazard losses on all the mortgage loans and/or REO Properties that it is required to service and administer under the series 2006-C7 pooling and servicing agreement, then, to the extent such policy—

•  is obtained from an insurer having a claims-paying ability or financial strength rating that meets, or whose obligations are guaranteed or backed in writing by an entity having a claims-paying ability or financial strength rating that meets, the requirements of the series 2006-C7 pooling and servicing agreement, and
•  provides protection equivalent to the individual policies otherwise required,

the master servicer or the special servicer, as the case may be, will be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related mortgaged real properties and/or REO Properties. That blanket policy or master force placed policy may contain a customary deductible clause, except that if there has not been maintained on the related mortgaged real property or REO Property an individual hazard insurance policy complying with the requirements described above in this ‘‘—Maintenance of Insurance’’ section, and there occur one or more losses that would have been covered by an individual policy, then the master servicer or special servicer, as appropriate, must promptly deposit into the master servicer’s custodial account from its own funds the amount of those losses that would have been covered by an individual policy, taking account of any applicable (or, to the extent consistent with the Servicing Standard, deemed) deductible clause, but are not covered under the blanket policy or master force placed policy because of the deductible clause in the blanket policy or master force placed policy.

In the case of the 1211 Avenue of the Americas Loan Combination, the master servicer and/or the special servicer under the series 2006-C6 pooling and servicing agreement will be responsible for causing the related borrower to maintain insurance on the related mortgaged real property on substantially similar terms to those described above. In the case of the Triangle Town Center Loan Combination, the master servicer and/or the special servicer under the series 2006-C1 pooling and servicing agreement will be responsible for causing the related borrower to maintain insurance on the related mortgaged real property on substantially similar terms to those described above.

Fair Value Option

Any single certificateholder or group of certificateholders with a majority interest in the series 2006-C7 controlling class, the special servicer and any assignees thereof will have the option to purchase any specially serviced mortgage loan in the trust (including, if applicable, an Outside Serviced Trust Mortgage Loan) as to which a material default exists, at a price generally equal to the sum of—

•  the outstanding principal balance of that mortgage loan,

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•  all accrued and unpaid interest on that mortgage loan, other than Default Interest and Post-ARD Additional Interest,
•  all unreimbursed servicing advances with respect to that mortgage loan,
•  all unpaid interest accrued on advances made by the master servicer, the special servicer and/or the trustee with respect to that mortgage loan, and
•  any other amounts payable under the series 2006-C7 pooling and servicing agreement.

The special servicer is required to accept the first offer by a holder of the purchase option above that is at least equal to that purchase price.

If none of the purchase option holders exercises its option to purchase any specially serviced mortgage loan in the trust as to which a material default exists, as described above in this ‘‘—Fair Value Option’’ section, then each holder of the purchase option will also have the option to purchase that specially serviced mortgage loan at a price equal to the fair value of that loan. Upon receipt of a written request from any holder of the purchase option to determine the fair value price in contemplation of its intention to exercise its option to purchase that specially serviced mortgage loan at a price that is below the purchase price set forth in the first paragraph of this ‘‘—Fair Value Option’’ section, the special servicer is required to promptly obtain an appraisal of the related mortgaged real property by an independent appraiser unless such an appraisal was obtained within one year of such date and the special servicer has no knowledge of any circumstances that would materially affect the validity of that appraisal. Promptly after obtaining that appraisal, the special servicer must determine the fair value price in accordance with the Servicing Standard and the discussion in the next to last paragraph of this ‘‘—Fair Value Option’’ section. Promptly after determining the fair value price, the special servicer is required to report such fair value price to the trustee and each holder of the purchase option.

If the special servicer determines that it is willing, or another holder of the purchase option notifies the special servicer that it is willing, to purchase any specially serviced mortgage loan at a price equal to or above the fair value price, then the special servicer will notify all other holders of the purchase option that it has made or received, as the case may be, such a bid (without disclosing the amount of that bid). All other holders of the purchase option may submit competing bids within the ten-business day period following such notice. At the conclusion of the above-described ten-business day period, the special servicer will be required, subject to the following sentence, to accept the highest bid received from any holder of the purchase option that is at least equal to the fair value price. If the special servicer accepts the bid of any holder of the purchase option, that holder of the purchase option will be required to purchase the subject specially serviced mortgage loan within ten business days of receipt of notice of the acceptance.

If the special servicer has not accepted a bid at the fair value price prior to the expiration of 120 days from its determination of the fair value price and thereafter receives a bid at the fair value price or a request from a holder of the purchase option for an updated fair value price, the special servicer will be required, within 45 days, to recalculate the fair value price and repeat the notice and bidding procedure described above until the purchase option terminates.

If the party exercising the purchase option at the fair value price for any specially serviced mortgage loan is the special servicer or an affiliate thereof, the trustee will be required to verify that the fair value price is at least equal to the fair value of such mortgage loan. In determining whether the fair value price is at least equal to the fair value of such mortgage loan the trustee is permitted to conclusively rely on an appraisal obtained by the trustee from an independent appraiser at the time it is required to verify the fair value price, and/or the opinion of an independent expert in real estate matters (including the master servicer) with at least five years’ experience in valuing or investing in loans, similar to such mortgage loan, that has been selected by the trustee with reasonable care at the expense of the trust.

Any holder of the purchase option may, once such option is exercisable, assign its purchase option with respect to any specially serviced mortgage loan to a third party other than (a) another holder of the purchase option, (b) the related borrower, or (c) if such assignment would violate the terms of any related co-lender, intercreditor or similar agreement, any affiliate of the related borrower; and, upon such assignment, that third party will have all of the rights that had been granted to the assignor in respect of the purchase option. That assignment will only be effective after written notice, together with a copy of the executed assignment and assumption agreement, has been delivered to the trustee, the master servicer and the special servicer.

In determining the fair value price for any specially serviced mortgage loan, the special servicer may take into account and rely upon, among other factors, the results of any appraisal or updated appraisal that it or the master servicer may have obtained in accordance with the series 2006-C7 pooling and servicing agreement within the prior 12 months; the opinions on

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fair value expressed by independent investors in mortgage loans comparable to the subject specially serviced mortgage loan; the period and amount of any delinquency on the subject specially serviced mortgage loan; the physical condition of the related mortgaged real property; the state of the local economy; and the expected recoveries from the subject specially serviced mortgage loan if the special servicer were to pursue a workout or foreclosure strategy instead of selling that mortgage loan to a holder of the purchase option.

Notwithstanding the foregoing, with respect to an Outside Serviced Trust Mortgage Loan, if it becomes a specially serviced mortgage loan under the terms of the applicable servicing agreement as to which a material default exists, the fair value price described above may be calculated based upon, among other things, appraisals and other information obtained from the applicable outside servicers, but only to the extent such information is so obtained. If the special servicer under the series 2006-C7 pooling and servicing agreement has received insufficient information from the applicable outside servicer with respect to such Outside Serviced Trust Mortgage Loan in order to establish a fair value price, it will base such determination only on information otherwise available or easily obtainable by it, at the expense of the trust. If the special servicer determines that a fair value price cannot be established for such Outside Serviced Trust Mortgage Loan based on the information available to it, then none of the purchase option holders will be permitted to exercise the purchase option at a fair value price.

The purchase option for any specially serviced mortgage loan will terminate, and will not be exercisable (or if exercised, but the purchase of the subject mortgage loan has not yet occurred, will terminate and be of no further force or effect) if (a) the special servicer has accepted a bid at the fair value price (although the purchase option will resume if the purchase is not completed within the requisite time period), (b) the subject specially serviced mortgage loan has ceased to be a specially serviced mortgage loan or is otherwise no longer in material default, (c) the related mortgaged real property has become an REO Property, (d) a final recovery determination has been made with respect to the subject specially serviced mortgage loan or (e) the subject specially serviced mortgage loan has been removed from the trust fund. Until a bid at the fair value price is accepted, the special servicer is required to continue to pursue all of the other resolution options available to it with respect to the specially serviced mortgage loan in accordance with the series 2006-C7 pooling and servicing agreement and the Servicing Standard.

Notwithstanding the foregoing, any party exercising a fair value purchase option under the series 2006-C7 pooling and servicing agreement will be subject to any restrictions on transfer contained in any related co-lender or intercreditor agreement or in any related loan document.

Realization Upon Defaulted Mortgage Loans

If a default on an underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) or Serviced Loan Combination has occurred, then, subject to the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above and applicable law, the special servicer may, on behalf of the trust and, if applicable, the related Serviced Non-Trust Loan Noteholder(s), take any of the following actions:

•  institute foreclosure proceedings;
•  exercise any power of sale contained in the related mortgage instrument;
•  obtain a deed in lieu of foreclosure; or
•  otherwise acquire title to the corresponding mortgaged real property, by operation of law or otherwise.

Notwithstanding the foregoing, the special servicer may not, on behalf of the trust and, if applicable, the related Serviced Non-Trust Loan Noteholder(s), obtain title to a mortgaged real property by foreclosure, deed in lieu of foreclosure or otherwise, or take any other action with respect to any mortgaged real property, if, as a result of that action, the trustee, on behalf of the series 2006-C7 certificateholders and, if applicable, the related Serviced Non-Trust Loan Noteholder(s), could, in the judgment of the special servicer, exercised in accordance with the Servicing Standard, be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of, that mortgaged real property within the meaning of CERCLA or any comparable law, unless:

•  the special servicer has previously determined in accordance with the Servicing Standard, based on a report prepared by a person who regularly conducts environmental audits, that the mortgaged real property is in compliance with applicable environmental laws and regulations and there are no circumstances or conditions present at the mortgaged real property that have resulted in any contamination for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any applicable environmental laws and regulations; or

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•  in the event that the determination described in the preceding bullet cannot be made, the special servicer has previously determined in accordance with the Servicing Standard, on the same basis as described in the preceding bullet, that it would maximize the recovery to the series 2006-C7 certificateholders and, if the subject mortgaged real property secures a Loan Combination, the affected Serviced Non-Trust Loan Noteholder(s), as a collective whole, on a present value basis, to acquire title to or possession of the mortgaged real property and to take such remedial, corrective and/or other further actions as are necessary to bring the mortgaged real property into compliance with applicable environmental laws and regulations and to appropriately address any of the circumstances and conditions referred to in the preceding bullet.

See, however, ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of the Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above.

The cost of any environmental testing will be covered by, and reimbursable as, a servicing advance, and the cost of any remedial, corrective or other further action contemplated by the second bullet of the second paragraph of this ‘‘—Realization Upon Defaulted Mortgage Loans’’ section will generally be payable directly out of the master servicer’s custodial account.

If neither of the conditions relating to environmental matters set forth in the two bullets of the second paragraph of this ‘‘—Realization Upon Defaulted Mortgage Loans’’ section has been satisfied with respect to any mortgaged real property securing a defaulted mortgage loan serviced under the series 2006-C7 pooling and servicing agreement, the special servicer will be required to take such action as is in accordance with the Servicing Standard, other than proceeding against the subject mortgaged real property. In connection with the foregoing, the special servicer may, on behalf of the trust and, if applicable, the related Serviced Non-Trust Loan Noteholder(s), but subject to the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above, release all or a portion of the subject mortgaged real property from the lien of the related mortgage.

If Liquidation Proceeds collected with respect to a defaulted mortgage loan in the trust are less than the outstanding principal balance of the defaulted mortgage loan, together with accrued interest on that mortgage loan and reimbursable expenses incurred by the special servicer, the master servicer and/or any other applicable party in connection with that mortgage loan, then the trust will realize a loss in the amount of the shortfall. The special servicer and/or the master servicer will be entitled to reimbursement out of the Liquidation Proceeds recovered on any defaulted mortgage loan, prior to the payment of those Liquidation Proceeds to the series 2006-C7 certificateholders, for—

•  any and all amounts that represent unpaid servicing compensation with respect to the subject mortgage loan,
•  any unreimbursed servicing expenses incurred with respect to the subject mortgage loan, and
•  any unreimbursed advances of delinquent payments made with respect to the subject mortgage loan.

In addition, amounts otherwise payable on the series 2006-C7 certificates may be further reduced by interest payable to the master servicer and/or special servicer on the servicing expenses and advances.

The special servicer under the applicable governing servicing agreement for each Outside Serviced Loan Combination will be responsible for realizing against the related mortgaged real property following an event of default under the related Outside Serviced Loan Combination, and assuming no alternative arrangements can be made for the resolution of that event of default. See ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement.

REO Properties

If title to any mortgaged real property is acquired by the special servicer on behalf of the trust and, if applicable, the related Serviced Non-Trust Loan Noteholder(s), then the special servicer will be required to sell that property not later than the end of the third calendar year following the year of acquisition, unless—

•  the IRS grants an extension of time to sell the property, or
•  the special servicer obtains an opinion of independent counsel generally to the effect that the holding of the property subsequent to the end of the third calendar year following the year in which the acquisition occurred will not result in the imposition of a tax on the trust assets or cause any REMIC created under the series 2006-C7 pooling and servicing agreement to fail to qualify as such under the Internal Revenue Code.

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Regardless of whether the special servicer applies for or is granted an extension of time to sell the property as contemplated by the first bullet of the prior sentence or receives the opinion contemplated by the second bullet of the prior sentence, the special servicer must act in accordance with the Servicing Standard and the terms and conditions of the Pooling and Servicing Agreement to liquidate the property. If an extension is granted or opinion given, the special servicer must sell the REO Property within the period specified in the extension or opinion, as the case may be.

Subject to the foregoing, the special servicer will generally be required to solicit cash offers for any REO Property held by the trust in a manner that will be reasonably likely to realize a fair price for the property; provided that the special servicer may not be obligated to accept the highest cash bid for the subject REO Property if, subject to the discussion under ‘‘—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ above, the special servicer determines, in accordance with the Servicing Standard, that acceptance of a lower cash bid would be in the best interests of the series 2006-C7 certificateholders (and, if the subject REO Property relates to a Serviced Loan Combination, the related Serviced Non-Trust Loan Noteholder(s)), as a collective whole. Neither the trustee, in its individual capacity, nor any of its affiliates may bid for or purchase from the trust any REO Property.

The special servicer may retain an independent contractor to operate and manage the REO Property. The retention of an independent contractor will not relieve the special servicer of its obligations with respect to the REO Property.

In general, the special servicer or an independent contractor employed by the special servicer at the expense of the trust will be obligated to operate and manage any REO Property held by the trust in a manner that:

•  maintains its status as foreclosure property under the REMIC provisions of the Internal Revenue Code, and
•  would, to the extent commercially reasonable and consistent with the preceding bullet, maximize net after-tax proceeds received from that property without materially impairing the special servicer’s ability to sell the REO Property promptly at a fair price.

The special servicer must review the operation of each REO Property held by the trust and consult with the trustee, or any person appointed by the trustee to act as tax administrator, to determine the trust’s federal income tax reporting position with respect to the income it is anticipated that the trust would derive from the property. The special servicer could determine that it would not be commercially reasonable to manage and operate the property in a manner that would avoid the imposition of—

•  a tax on net income from foreclosure property, within the meaning of section 860G(c) of the Internal Revenue Code, or
•  a tax on prohibited transactions under section 860F of the Internal Revenue Code.

To the extent that income the trust receives from an REO Property is subject to—

•  a tax on net income from foreclosure property, that income would be subject to federal tax at the highest marginal corporate tax rate, which is currently 35%, or
•  a tax on prohibited transactions, that income would be subject to federal tax at a 100% rate.

The determination as to whether income from an REO Property held by the trust would be subject to a tax will depend on the specific facts and circumstances relating to the management and operation of each REO Property. The risk of taxation being imposed on income derived from the operation of foreclosed real property is particularly present in the case of hospitality and healthcare properties. Generally, income from an REO Property that is directly operated by the special servicer would be apportioned and classified as service or non-service income. The service portion of the income could be subject to federal tax either at the highest marginal corporate tax rate or at the 100% rate. The non-service portion of the income could be subject to federal tax at the highest marginal corporate tax rate or, although it appears unlikely, at the 100% rate. Any tax imposed on the trust’s income from an REO Property would reduce the amount available for payment to the series 2006-C7 certificateholders. See ‘‘Federal Income Tax Consequences’’ in this prospectus supplement and in the accompanying base prospectus. The reasonable out-of-pocket costs and expenses of obtaining professional tax advice in connection with the foregoing will be payable out of the master servicer’s custodial account.

Notwithstanding anything to the contrary described above, the special servicer will not have any obligations under the series 2006-C7 pooling and servicing agreement with respect to any REO Property relating to an Outside Serviced Loan Combination. If a mortgaged real property relating to an Outside Serviced Loan Combination is acquired as an REO property under the governing servicing agreement for that Loan Combination, then the special servicer under that governing

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servicing agreement will be required to operate, manage, lease, maintain and dispose of that property pursuant to the terms of the governing servicing agreement, which will be similar (but not identical) to those described above with respect to the special servicer under the series 2006-C7 pooling and servicing agreement and any REO Properties administered thereunder. See ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement.

Inspections; Collection of Operating Information

The special servicer will be required to perform or cause to be performed a physical inspection of a mortgaged real property as soon as practicable after the related underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) becomes a specially serviced mortgage loan and annually thereafter for so long as the related underlying mortgage loan remains a specially serviced mortgage loan, provided that the cost of each of those inspections will be borne by the trust and payable through a reimbursable servicing advance or directly out of the master servicer’s custodial account. In addition, the special servicer must perform or cause to be performed a physical inspection of each of the REO Properties held by the trust and administered under the series 2006-C7 pooling and servicing agreement at least once per calendar year, provided that the cost of each of those inspections will be borne by the trust and payable through a reimbursable servicing advance or directly out of the master servicer’s custodial account. Beginning in 2007, the master servicer will be required at its expense to perform or cause to be performed a physical inspection of each mortgaged real property securing a non-specially serviced mortgage loan—

•  at least once every two calendar years in the case of mortgaged real properties securing underlying mortgage loans that have outstanding principal balances, or with allocated loan amounts, of $2,000,000 or less, and
•  at least once every calendar year in the case of all other mortgaged real properties;

provided that the master servicer will not be required to perform or cause to be performed an inspection on a mortgaged real property if such property has been inspected by the master servicer or the special servicer in the preceding six months. Notwithstanding the foregoing, however, neither the master servicer nor the special servicer will be obligated to inspect the mortgaged real property related to an Outside Serviced Loan Combination.

The master servicer and the special servicer will each be required to prepare or cause to be prepared and deliver to the trustee a written report of each of the inspections performed by it that generally describes the condition of the subject mortgaged real property and, insofar as the master servicer or the special servicer is aware thereof, that specifies the existence of any sale, transfer or abandonment of the subject mortgaged real property or any material change in its condition or value.

With respect to each Outside Serviced Loan Combination, periodic inspections of the related mortgaged real property are to be performed by the master servicer and/or special servicer under the governing servicing agreement for that Loan Combination.

The special servicer, in the case of any specially serviced mortgage loans for which it is responsible, and the master servicer, in the case of all other mortgage loans serviced under the series 2006-C7 pooling and servicing agreement, will also be required, consistent with the Servicing Standard, to use reasonable efforts to collect from the related borrowers required to deliver them the quarterly and annual operating statements and related rent rolls with respect to each of the related mortgaged real properties other than a mortgaged real property related to an Outside Serviced Loan Combination. The special servicer will also be required to obtain operating statements and rent rolls with respect to any REO Properties held by the trust and administered under the Series 2006-C7 pooling and servicing agreement. The special servicer will be required to deliver to the master servicer copies of the operating statements and rent rolls it collects, and the master servicer will be required to deliver to the trustee copies of the operating statements and rent rolls it collects or receives, in each case upon request. The master servicer or the special servicer, as applicable, will be required to prepare and, upon request, deliver to the trustee, an operating statement analysis report with respect to each mortgaged real property and REO Property (other than any mortgaged real property or REO Property related to an Outside Serviced Loan Combination) for the applicable period; provided that, in the case of a report prepared by the special servicer, such report will be delivered by the special servicer for delivery to the trustee. See ‘‘Description of the Offered Certificates—Reports to Certificateholders; Available Information’’ in this prospectus supplement. Each of the mortgage loans in the trust requires the related borrower to deliver an annual property operating statement or other annual financial information. The foregoing notwithstanding, there can be no assurance that any operating statements required to be delivered will in fact be delivered, nor are the master servicer and the special servicer likely to have any practical means of compelling their delivery in the case of an otherwise performing mortgage loan.

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With respect to an Outside Serviced Trust Mortgage Loan, a servicer under the governing servicing agreement for the related Loan Combination will be responsible for collecting financial information with respect to the related mortgaged real property and will be required to deliver such information to the master servicer under the series 2006-C7 pooling and servicing agreement. Such information will be made available to the series 2006-C7 certificateholders by the trustee as provided in this prospectus supplement.

Evidence as to Compliance

No later than April 30 of each year (or March 15th of any year during which an annual report on Form 10-K under the Securities Exchange Act of 1934, as amended, is required to be filed with the SEC with respect to the trust), beginning in 2007, each of the master servicer and the special servicer (and the trustee to the extent it constitutes a servicer for the purposes of Regulation AB) must deliver or cause to be delivered, as applicable, to us and the trustee, among others:

•  a report on an assessment of compliance by it with the specified servicing criteria, signed by an authorized officer of the master servicer, the special servicer or the trustee, as the case may be, which report shall contain (a) a statement by the master servicer or the special servicer, as the case may be, of its responsibility for assessing compliance with the specified servicing criteria applicable to it, (b) a statement that the master servicer, the special servicer or the trustee, as the case may be, used the servicing criteria in Item 1122(d) of Regulation AB to assess compliance with the applicable servicing criteria, (c) the master servicer’s, the special servicer’s or the trustee’s, as the case may be, assessment of compliance with the applicable servicing criteria as of and for the period ending December 31st of the preceding calendar year, which discussion must include any material instance of noncompliance with the applicable servicing criteria identified by the master servicer or the special servicer, as the case may be, and (d) a statement that a registered public accounting firm has issued an attestation report on the master servicer’s, the special servicer’s or the trustee’s, as the case may be, assessment of compliance with the applicable servicing criteria as of and for such period ending December 31st of the preceding calendar year; and
•  as to each annual assessment report delivered by the master servicer, the special servicer or the trustee, as the case may be, as described in the preceding bullet, a report from a registered public accounting firm—made in accordance with the standards for attestation engagements issued or adopted by the Public Company Accounting Oversight Board—that attests to, and reports on, the assessment made by the asserting party in such report delivered as described in the immediately preceding bullet; and
•  a statement of compliance signed by an officer of the master servicer, the special servicer or the trustee, as the case may be, to the effect that (i) a review of the activities of the master servicer, the special servicer or the trustee, as the case may be, during the preceding calendar year—or, in the case of the first such certification, during the period from the Issue Date to December 31, 2006, inclusive—and of its performance under the series 2006-C7 pooling and servicing agreement, has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge, based on such review, the master servicer, special servicer or trustee, as the case may be, has fulfilled its obligations under the series 2006-C7 pooling and servicing agreement in all material respects throughout the preceding calendar year or the portion of that year during which the series 2006-C7 certificates were outstanding (or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof).

Copies of the above-mentioned annual assessment report, annual attestation report and annual statement of compliance with respect to each of the master servicer and the special servicer will be made available to series 2006-C7 certificateholders, at their expense, upon written request to the trustee.

Accounts

General.    Apart from escrow accounts, reserve accounts and servicing accounts maintained by the master servicer on behalf of the respective borrowers and the trust, for purposes of holding escrow payments and reserve amounts, the primary transaction accounts to be established under the series 2006-C7 pooling and servicing agreement will consist of:

•  the master servicer’s custodial account;
•  each of the Serviced Loan Combination-specific accounts maintained by the master servicer, which Loan Combination-specific accounts arc comparable to the custodial account;
•  the trustee’s collection account;
•  the special servicer’s REO account; and
•  the special servicer’s loss of value reserve fund.

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In general, the party maintaining the subject account will make any decisions regarding the deposit of funds therein and the transfer and/or disbursement of funds therefrom. However, those decisions may be made in response to a request by, or based upon information provided by, another party to the series 2006-C7 pooling and servicing agreement or other third party.

Collections of principal, interest and prepayment consideration on the underlying mortgage loans, exclusive of any fees or expenses payable by the trust therefrom, will be distributable to the applicable series 2006-C7 certificateholders on the distribution date relating to the collection period in which those collections were received.

There will be no independent verification of the above-referenced transaction accounts or account activity.

Custodial Account.

General.    The master servicer will be required to establish and maintain a custodial account for purposes of holding payments and other collections that it receives with respect to the underlying mortgage loans. That custodial 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. That custodial account will be maintained separate and apart from trust funds created for mortgage-backed securities of other series and the other accounts of the master servicer. Payments and collections received in respect of the Serviced Non-Trust Loan will not be deposited in the custodial account.

The funds held in the master servicer’s custodial account may be held as cash or, at the master servicer’s discretion, invested in Permitted Investments. Any interest or other income earned on funds in the master servicer’s custodial account will be paid to the master servicer as additional compensation subject to the limitations set forth in the series 2006-C7 pooling and servicing agreement.

Deposits.    Under the series 2006-C7 pooling and servicing agreement, the master servicer is required to deposit or cause to be deposited in its custodial account within one business day following receipt, in the case of payments and other collections on the underlying mortgage loans, or as otherwise required under the series 2006-C7 pooling and servicing agreement, the following payments and collections received or made by or on behalf of the master servicer with respect to the mortgage pool subsequent to the Issue Date, other than monthly debt service payments due on or before the cut-off date, which monthly debt service payments belong to the related mortgage loan seller:

•  all payments on account of principal on the underlying mortgage loans, including principal prepayments;
•  all payments on account of interest on the underlying mortgage loans, including Default Interest and Post-ARD Additional Interest;
•  all prepayment premiums, yield maintenance charges and late payment charges collected with respect to the underlying mortgage loans;
•  all Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds collected on the underlying mortgage loans, except to the extent that any of those proceeds are to be deposited in the special servicer’s REO account;
•  any amounts representing a reimbursement, payment and/or contribution due and owing to the Trust from any Serviced Non-Trust Loan Noteholder in accordance with the related Co-Lender Agreement;
•  all remittances to the trust under the series 2006-C6 pooling and servicing agreement and/or the 1211 Avenue of the Americas Co-Lender Agreement with respect to the 1211 Avenue of the Americas Mortgage Loan;
•  all remittances to the trust under the series 2006-C1 pooling and servicing agreement and/or the Triangle Town Center Co-Lender Agreement with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan;
•  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 custodial account;
•  all payments required to be paid by the master servicer or the special servicer with respect to any deductible clause in any blanket or master force placed insurance policy maintained by it as described under ‘‘—Maintenance of Insurance’’ above;
•  any amount required to be transferred from a loss of value reserve fund, any Loan Combination custodial account or the special servicer’s REO account;
•  any amounts required to be transferred from any debt service reserve accounts with respect to the mortgage loans; and
•  insofar as they do not constitute escrow payments, any amount paid by a borrower with respect to an underlying mortgage loan specifically to cover items for which a servicing advance has been made.

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Upon its receipt of any of the amounts described in the first five bullets and the last bullet of the prior paragraph with respect to any specially serviced mortgage loan in the trust (other than, if applicable, an Outside Serviced Trust Mortgage Loan), the special servicer is required to promptly remit those amounts to the master servicer for deposit in the master servicer’s custodial account.

The obligation of the master servicer to deposit the amounts identified in this ‘‘—Custodial Account—Deposits’’ section with respect to any Outside Serviced Trust Mortgage Loan is dependent upon its receipt of such amounts from a party responsible for servicing or administering that Outside Serviced Trust Mortgage Loan.

Notwithstanding the foregoing, amounts received on each underlying mortgage loan that is part of a Serviced Loan Combination will be deposited into a separate account maintained by the master servicer before being transferred to the master servicer’s custodial account. Each such separate account will be substantially similar to the custodial account with respect to the manner in which it is maintained and the amounts deposited therein, but will relate only to a particular Serviced Loan Combination.

Also notwithstanding the foregoing, the custodial account and each Serviced Loan Combination-specific account may, in fact, be separate sub-accounts of the same account.

Withdrawals. The master servicer may make withdrawals from its custodial 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 collection account described under ‘‘—Accounts—Collection Account’’ below, on the business day preceding each distribution date, an amount (the ‘‘Master Servicer Remittance Amount’’) equal to the aggregate of all payments and other collections on the mortgage loans and any REO Properties in the trust that are then on deposit in the custodial 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 after the end of the related collection period,
(c)  amounts that are payable or reimbursable from the custodial account to any person other than the series 2006-C7 certificateholders in accordance with any of clauses 3. through 21. below, and
(d)  amounts deposited in the custodial account in error;
2.  apply amounts held for future distribution on the series 2006-C7 certificates to make advances to cover delinquent scheduled debt service payments, other than balloon payments, as and to the extent described under ‘‘—Advances —Advances of Delinquent Monthly Debt Service Payments’’ in this prospectus supplement;
3.  to reimburse the trustee, itself or the special servicer, as applicable, for any unreimbursed advances made by that party under the series 2006-C7 pooling and servicing agreement, which reimbursement is to be made out of collections on the underlying mortgage loan or REO Property as to which the advance was made;
4.  to pay itself earned and unpaid master servicing fees in respect of each mortgage loan in the trust, which payment is first to be made out of amounts received on or with respect to that mortgage loan that are allocable as a recovery of interest and then, if the subject underlying mortgage loan and any related REO Property has been liquidated, out of general collections on deposit in the custodial account;
5.  to pay the special servicer, out of general collections on deposit in the custodial account, earned and unpaid special servicing fees with respect to each mortgage loan in the trust (other than the Outside Serviced Trust Mortgage Loans), that is either—
(a)  specially serviced mortgage loan, or
(b)  mortgage loan as to which the related mortgaged real property has become an REO Property;
6.  to pay the special servicer earned and unpaid workout fees and liquidation fees to which it is entitled with respect to any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan), which payment is to be made from the sources described under ‘‘—Servicing Compensation and Payment of Expenses’’ above;
7.  to reimburse the trustee, itself or the special servicer, as applicable, out of general collections on deposit in the custodial account, for any unreimbursed advance made by that party under the series 2006-C7 pooling and servicing agreement that has been determined not to be ultimately recoverable as described in clause 3. above or otherwise out of collections on the subject mortgage loan or any related REO Property;

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8.  to pay the trustee, itself or the special servicer, as applicable, unpaid interest on any advance made by and then being reimbursed to that party under the series 2006-C7 pooling and servicing agreement, which payment is to be made out of any Default Interest and late payment charges on deposit in the custodial account that were received, during the collection period in which the advance is reimbursed, with respect to the underlying mortgage loan as to which that advance was made;
9.  to pay unpaid expenses—other than interest on advances which is covered by clauses 8. above and 10. below, and other than special servicing fees, workout fees and liquidation fees—that were incurred with respect to any underlying mortgage loan or related REO Property and that, if paid from collections on the mortgage pool other than the late payment charges and Default Interest received with respect to that mortgage loan, would constitute Additional Trust Fund Expenses, which payment is to be made out of Default Interest and late payment charges on deposit in the custodial account that were received with respect to the underlying mortgage loan as to which the expense was incurred, to the extent such amounts have not been otherwise applied according to clause 8. above;
10.  in connection with the reimbursement of advances as described in clause 3. or 7. above or out of the trustee’s collection account, to pay the trustee, itself or the special servicer, as the case may be, out of general collections on deposit in the custodial account, any interest accrued and payable on that advance and not otherwise payable under clause 8. above;
11.  to pay itself any items of additional master servicing compensation on deposit in the custodial account as discussed under ‘‘—Servicing Compensation and Payment of Expenses—Additional Servicing Compensation’’ above;
12.  to pay the special servicer any items of additional special servicing compensation on deposit in the custodial account as discussed under ‘‘—Servicing Compensation and Payment of Expenses—Additional Servicing Compensation’’ above;
13.  to pay, out of general collections on deposit in the custodial account, certain servicing expenses that, if advanced, would not be recoverable under clause 3. above, as discussed under ‘‘—Servicing Compensation and Payment of Expenses—Payment of Expenses’’ above;
14.  to pay, out of general collections on deposit in the custodial account, for costs and expenses incurred by the trust in connection with the remediation of adverse environmental conditions at any mortgaged real property that secures a defaulted mortgage loan in the trust;
15.  to pay the trustee, itself, the special servicer, us or any of their or our respective members, managers, directors, officers, employees and agents, as the case may be, out of general collections on deposit in the custodial account, 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 ‘‘—Rights, Protections, Indemnities and Immunities of the Trustee’’ in the accompanying base prospectus and under ‘‘—Defense of Litigation’’ above;
16.  to pay, out of general collections on deposit in the custodial account, for the cost of an independent appraiser or other expert in real estate matters retained pursuant to the series 2006-C7 pooling and servicing agreement, to the extent that such cost is not covered by a servicing advance;
17.  in the event the master servicer determines, in accordance with the Servicing Standard, that it has received insufficient information from the master servicer or special servicer under the governing servicing agreement for an Outside Serviced Trust Mortgage Loan to make a recoverability determination with respect to required P&I advances on that mortgage loan, to pay, out of general collections on deposit in the custodial account, for costs incurred in connection with obtaining an appraisal and/or other relevant information necessary to make such determination;
18.  to pay, out of general collections on deposit in the custodial account, for the cost of certain advice of counsel and tax accountants, the fees of an independent contractor retained to manage an REO Property, the cost of various opinions of counsel, the cost of recording the series 2006-C7 pooling and servicing agreement and the cost of the trustee’s transferring mortgage files to a successor after having been terminated by series 2006-C7 certificateholders without cause, all as set forth in the series 2006-C7 pooling and servicing agreement;
19.  with respect to each mortgage loan purchased out of the trust fund, to pay to the purchaser all amounts received on that mortgage loan following the purchase that have been deposited in the custodial account;

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20.  to make any required payments—other than normal monthly remittances—due under the related Co-Lender Agreement from the trust, as holder of an underlying mortgage loan that is part of a Loan Combination, including to reimburse a servicer of an Outside Serviced Loan Combination for a servicing advance that is not recoverable out of collections on that Outside Serviced Loan Combination;
21.  to pay any other items described in this prospectus supplement as being payable from the custodial account;
22.  to withdraw amounts deposited in the custodial account in error;
23.  to invest amounts held in the custodial account in Permitted Investments; and
24.  to clear and terminate the custodial account upon the termination of the series 2006-C7 pooling and servicing agreement.

Withdrawals from any Serviced Loan Combination-specific accounts may be made by the master servicer to make payments to the trust and the applicable Serviced Non-Trust Loan Noteholder(s) and, to the extent they relate solely to the related Loan Combination, for substantially the same purposes identified in clauses 3. through 19. and 22. through 24. of the prior paragraph.

The series 2006-C7 pooling and servicing agreement will prohibit the application of amounts received on a Serviced Non-Trust Loan to cover fees and expenses payable or reimbursable out of general collections with respect to mortgage loans and REO Properties in the trust, which fees and expenses are not related to the applicable Serviced Loan Combination.

Only the master servicer and sub-servicers retained by it will have access to funds in the custodial account and the Serviced Loan Combination-specific accounts.

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 and administered under the Series 2006-C7 pooling and servicing agreement, separate and apart from its own funds and general assets. If any such REO Property is acquired by the trust, 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, upon receipt, all net income, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds received by it with respect to each REO Property held by the trust and administered under the Series 2006-C7 pooling and servicing agreement. The funds held in this REO account may be held as cash or, at the discretion of the special servicer, 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 series 2006-C7 pooling and servicing agreement.

The special servicer will be required to withdraw from its REO account funds necessary for the proper operation, management, leasing, maintenance and disposition of any REO Property held by the trust and administered under the Series 2006-C7 pooling and servicing agreement, but only to the extent of amounts on deposit in the account relating to that particular REO Property. Promptly following the end of each collection period, the special servicer will be required to withdraw from the REO account and deposit, or deliver to the master servicer for deposit, into the master servicer’s custodial account the total of all amounts received with respect to each REO Property held by the trust during that collection period, net of—

•  any withdrawals made out of those amounts as described in the preceding sentence,
•  any portion of those amounts that may be retained as reserves as described in the next paragraph, and
•  if the subject REO Property relates to a Serviced Loan Combination, any portion of those amounts that are payable to the related Serviced Non-Trust Loan Noteholder.

The special servicer may, subject to the limitations described in the series 2006-C7 pooling and servicing agreement, retain in its REO account that portion of the proceeds and collections as may be necessary to maintain a reserve of sufficient funds for the proper operation, management, leasing, maintenance and disposition of the related REO Property, including the creation of a reasonable reserve for repairs, replacements, necessary capital improvements and other related expenses.

Only the special servicer will have access to funds in the special servicer’s REO Account.

The special servicer must keep and maintain separate records, on a property-by-property basis, for the purpose of accounting for all deposits to, and withdrawals from, its REO account.

If an REO Property relates to an Outside Serviced Loan Combination, then collections thereon will not be deposited in the special servicer’s REO account.

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Collection Account.

General.    The trustee must establish and maintain an account in which it will hold funds pending their payment on the series 2006-C7 certificates, and from which it will make those payments. 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 funds held in the trustee’s collection account may be held as cash or, at the trustee’s discretion, invested in Permitted Investments. Any interest or other income earned on funds in the trustee’s collection account will be paid to the trustee as additional compensation subject to the limitations set forth in the series 2006-C7 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 collection account the following funds:

•  the applicable Master Servicer Remittance Amount;
•  any advances of delinquent monthly debt service payments made by the master servicer on the underlying mortgage loans with respect to that distribution date; and
•  any payments made by the master servicer to cover Prepayment Interest Shortfalls incurred during the related collection period.

See ‘‘—Advances—Advances of Delinquent Monthly Debt Service Payments’’, ‘‘—Accounts—Custodial Account’’ and ‘‘—Servicing Compensation and Payment of Expenses’’ above.

With respect to each distribution date that occurs during March, commencing in 2007, the trustee will be required to transfer from its interest reserve account, which we describe under ‘‘—Accounts—Interest Reserve Account’’ below, to its collection account the interest reserve amounts that are then being held in that interest reserve account with respect to the underlying mortgage loans that accrue interest on an Actual/360 Basis.

Withdrawals.    The trustee may from time to time make withdrawals from its collection account for any of the following purposes:

•  to pay itself a monthly fee, which is described under ‘‘—Trustee Compensation’’ above, to invest funds held in the collection account in Permitted Investments and to pay itself investment earnings on Permitted Investments of funds in the collection account;
•  to indemnify itself and various related persons as described under ‘‘Description of the Governing Documents— Rights, Protections, Indemnities and Immunities of the Trustee’’ in the accompanying base prospectus;
•  to pay for various opinions of counsel or the advice of counsel required to be obtained in connection with any amendments to the series 2006-C7 pooling and servicing agreement and the administration of the trust;
•  to pay any federal, state and local taxes imposed on the trust, its assets and/or transactions, together with all incidental costs and expenses, that are required to be borne by the trust as described under ‘‘Federal Income Tax Consequences—REMICs—Prohibited Transactions Tax and Other Taxes’’ in the accompanying base prospectus and ‘‘—REO Properties’’ above;
•  to pay the cost of transferring mortgage files to a successor trustee where the trustee has been terminated without cause and that cost is not otherwise covered;
•  with respect to each distribution date during January of 2007 or any year thereafter that is not a leap year or during February of 2006 or any year thereafter, 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 underlying mortgage loans that accrue interest on an Actual/360 Basis; and
•  to withdraw amounts deposited in the collection account in error.

On each distribution date, all amounts on deposit in the trustee’s collection account, exclusive of any portion of those amounts that may be withdrawn for the purposes contemplated in the foregoing paragraph or that was deposited in the collection account in error, will be withdrawn and applied to make payments on the series 2006-C7 certificates. For any distribution date, the funds available to make payments on the series 2006-C7 certificates will consist of the following separate components—

•  the portion of those funds that represent prepayment consideration collected on the underlying mortgage loans as a result of voluntary or involuntary prepayments that occurred during the related collection period, which will be paid to the holders of the class A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP, X-W, A-M, A-J, B, C, D, E, F, G, H, J and/or K certificates as and to the extent described under ‘‘Description of the Offered Certificates—Payments—Payments of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement,

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•  the portion of those funds that represent Post-ARD Additional Interest collected on the ARD Loans in the trust during the related collection period, which will be paid to the holders of the class V certificates as described under ‘‘—Payments—Payments of Post-ARD Additional Interest’’ below, and
•  the remaining portion of those funds, which—
1.  we refer to as the Available P&I Funds, and
2.  will be paid to the holders of all the series 2006-C7 certificates (exclusive of the class V certificates), as described under ‘‘Description of the Offered Certificates—Payments—Priority of Payments’’ in this prospectus supplement.

Only the trustee will have access to funds in the collection account.

Interest Reserve Account.    The trustee must maintain an account in which it will hold the interest reserve amounts described in the second and third following paragraphs with respect to the underlying 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 similar securitizations as the one involving the offered certificates.

The funds held in the trustee’s interest reserve account may be held as cash or, at the trustee’s discretion, invested in Permitted Investments. Any interest or other income earned on funds in the trustee’s interest reserve account will be paid to the trustee as additional compensation subject to the limitations set forth in the series 2006-C7 pooling and servicing agreement.

During January, except in a leap year, and February of each calendar year, beginning in January 2007, the trustee will, on or before the distribution date in that month, withdraw from its collection account and deposit in its interest reserve account the interest reserve amounts with respect to those underlying mortgage loans that accrue interest on an Actual/360 Basis, and for which the monthly debt service payment due in that month was either received or advanced. That interest reserve amount for each of those mortgage loans will, in general, equal one day’s interest accrued at the related mortgage interest rate (or (i) in the case of the 1211 Avenue of the Americas Mortgage Loan, the related mortgage interest rate, minus the actual/360 equivalent of 0.01%, which is the per annum rate at which the master servicing fee under the series 2006-C6 pooling and servicing agreement accrues with respect to the 1211 Avenue of the Americas Mortgage Loan on a 30/360 Basis, and (ii) in the case of a KeyBank Mortgage Loan that accrues interest on an Actual/360 Basis, the related mortgage interest rate, minus the related Administrative Cost Rate) on the Stated Principal Balance of that mortgage loan as of the end of the related collection period.

During March of each calendar year, beginning with March 2007, the trustee will, on or before the distribution date in that month, withdraw from its interest reserve account and deposit in its collection account any and all interest reserve amounts then on deposit in the interest reserve account with respect to the underlying 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 collection account will be included in the Available P&I Funds for the distribution date during the month of transfer.

Only the trustee will have access to funds in the interest reserve account.

Loss of Value Reserve Fund.    If we, with respect to a Lehman Mortgage Loan, the UBS Mortgage Loan Seller, with respect to a UBS Mortgage Loan, or the KeyBank Mortgage Loan Seller, with respect to a KeyBank Mortgage Loan, make a loss of value payment in connection with a Material Breach or Material Document Defect, as described under ‘‘Description of the Mortgage Pool—Cures and Repurchases’’ in this prospectus supplement, then the special servicer will be required to establish a loss of value reserve fund in which to hold that payment pending application thereof. The loss of value reserve fund must be maintained in a manner and with a depository that satisfies rating agency standards for similar securitizations as the one involving the offered certificates. Funds in the loss of value reserve fund will be held uninvested.

The special servicer may make withdrawals from the loss of value reserve fund, out of any loss of value payment on deposit therein, in order to cover losses and Additional Trust Fund Expenses, as incurred, with respect to the underlying mortgage loan as to which that loss of value payment was made and, following a liquidation of that mortgage loan, to cover losses and Additional Trust Fund Expenses with respect to any other underlying mortgage loan.

Only the special servicer will have access to funds in the loss of value reserve fund.

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Events of Default

Each of the following events, circumstances and conditions will be considered events of default with respect to the master servicer or the special servicer, as applicable, under the series 2006-C7 pooling and servicing agreement:

•  the master servicer or the special servicer fails to deposit, or to remit to the appropriate party for deposit, into the master servicer’s custodial account or the special servicer’s REO account, as applicable, any amount required to be so deposited, which failure is not remedied within one business day following the date on which the deposit or remittance was required to be made;
•  the master servicer fails to remit to the trustee for deposit in the trustee’s collection account any amount required to be so remitted, which failure is not remedied by 11:00 a.m., New York City time, on the applicable distribution date, or the master servicer fails to make in a timely manner any payment required to be made to a Serviced Non-Trust Loan Noteholder, which failure is not remedied by 11:00 a.m., New York City time, on the business day immediately following the date on which the payment was required to be made;
•  the master servicer or the special servicer fails to timely make any servicing advance required to be made by it under the series 2006-C7 pooling and servicing agreement, and that failure continues unremedied for three business days following the date on which notice of such failure has been given to the master servicer or the special servicer, as applicable, by any party to the series 2006-C7 pooling and servicing agreement;
•  the master servicer or the special servicer fails to observe or perform in any material respect any of its other covenants or agreements under the series 2006-C7 pooling and servicing agreement, and that failure continues unremedied for 30 days—or such shorter period as may be provided for in the series 2006-C7 pooling and servicing agreement for certain specified acts—or, if the responsible party is diligently attempting to remedy the failure, 60 days—or such shorter period as may be provided for in the series 2006-C7 pooling and servicing agreement for certain specified acts—after written notice of the failure (requiring it to be remedied) has been given to the master servicer or the special servicer, as the case may be, by any other party to the series 2006-C7 pooling and servicing agreement, by series 2006-C7 certificateholders entitled to not less than 25% of the voting rights for the series 2006-C7 certificates or by any affected Serviced Non-Trust Loan Noteholder;
•  it is determined that there is a breach by the master servicer or the special servicer of any of its representations or warranties contained in the series 2006-C7 pooling and servicing agreement that materially and adversely affects the interests of any class of series 2006-C7 certificateholders or any Serviced Non-Trust Loan Noteholder, and that breach continues unremedied for 30 days or, if the responsible party is diligently attempting to cure the breach, 60 days after written notice of the breach (requiring it to be remedied) has been given to the master servicer or the special servicer, as the case may be, by any other party to the series 2006-C7 pooling and servicing agreement, by series 2006-C7 certificateholders entitled to not less than 25% of the voting rights for the series 2006-C7 certificates or by any affected Serviced Non-Trust Loan Noteholder;
•  various events of bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities, or similar proceedings occur with respect to the master servicer or the special servicer, or the master servicer or the special servicer takes various actions indicating its bankruptcy, insolvency or inability to pay its obligations;
•  the master servicer or the special servicer is removed from S&P’s Select Servicer List as a U.S. Commercial Mortgage Master Servicer or a U.S. Commercial Mortgage Special Servicer, as applicable, and is not reinstated within 60 days, and the ratings assigned by S&P to one or more classes of the series 2006-C7 certificates (or, if the Extendicare Portfolio Non-Trust Loan or the Reston Town Center Non-Trust Loan is securitized, one or more classes of securities backed by either of those Serviced Non-Trust Loans) are qualified, downgraded or withdrawn in connection therewith;
•  a servicing officer of the master servicer or the special servicer, as the case may be, obtains actual knowledge that one or more ratings assigned by Fitch to one or more classes of the series 2006-C7 certificates have been qualified, downgraded or withdrawn, or otherwise made the subject of a ‘‘negative’’ credit watch that remains in effect for at least 60 days, which action Fitch has determined is solely or in material part a result of the master servicer or special servicer, as the case may be, acting in that capacity;
•  the master servicer ceases to be rated at least CMS3 by Fitch or the special servicer ceases to be rated at least CSS3 by Fitch and, in either case, that rating is not restored within 60 days after the subject downgrade or withdrawal or ‘‘negative’’ credit watch; and

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•  if the Extendicare Portfolio Non-Trust Loan or the Reston Town Center Non-Trust Loan is securitized, one or more ratings assigned by Fitch or Moody’s to one or more classes of securities backed by either of those Serviced Non-Trust Loans have been qualified, downgraded or withdrawn, or otherwise made the subject of a ‘‘negative’’ credit watch that remains in effect for at least 60 days, which action Fitch or Moody’s, as the case may be, has determined is solely or in material part a result of the master servicer or special servicer, as the case may be, acting in that capacity.

The series 2006-C7 pooling and servicing agreement may include other events of default that apply only to the Serviced Non-Trust Loans.

If an officer of the trustee responsible for administration of the trust has notice of any event that constitutes or, with notice or lapse of time or both, would constitute an event of default with respect to the master servicer or the special servicer, then—within 10 days after such officer’s receipt of that notice—the trustee will transmit by mail to us, all the series 2006-C7 certificateholders, S&P and Fitch notice of that occurrence, unless the default has been cured.

Rights Upon Event of Default

If an event of default described above under ‘‘—Events of Default’’ occurs with respect to the master servicer or the special servicer and remains unremedied, the trustee will be authorized, and at the written direction of the series 2006-C7 certificateholders entitled to not less than 25% of the voting rights for the series 2006-C7 certificates, the trustee will be required, to terminate all of the future rights and obligations of the defaulting party under the series 2006-C7 pooling and servicing agreement and in and to the trust assets other than any rights the defaulting party may have as a series 2006-C7 certificateholder.

Upon receipt by a defaulting party of written notice of termination for which that defaulting party may be terminated under the series 2006-C7 pooling and servicing agreement, all authority and power of the defaulting party under the series 2006-C7 pooling and servicing agreement will pass to and be vested in the trustee, and the trustee will be authorized and empowered under the series 2006-C7 pooling and servicing agreement to execute and deliver, on behalf of and at the expense of the defaulting party, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the subject termination, whether to complete the transfer and endorsement or assignment of the mortgage loans included in the trust and the Serviced Non-Trust Mortgage Loans and related documents or otherwise. Any costs or expenses in connection with any actions to be taken by any party to the series 2006-C7 pooling and servicing agreement in connection with an event of default on the part of the master servicer or the special servicer are required to be borne by the defaulting party, and if not paid by the defaulting party within 90 days after the presentation of reasonable documentation of such costs and expenses, those costs and expenses will be reimbursed out of the trust fund; provided that the defaulting party will not be relieved of its liability for those costs and expenses.

Upon any termination of the master servicer or special servicer as a result of an event of default, the trustee must either:

•  succeed to all of the responsibilities, duties and liabilities of the master servicer or special servicer, as the case may be, under the series 2006-C7 pooling and servicing agreement; or
•  appoint an established mortgage loan servicing institution to act as successor master servicer or special servicer, as the case may be, under the series 2006-C7 pooling and servicing agreement.

The holders of series 2006-C7 certificates entitled to a majority of the voting rights for the series 2006-C7 Certificates may require the trustee to appoint an established mortgage loan servicing institution to act as successor master servicer or special servicer, as the case may be, under the series 2006-C7 pooling and servicing agreement, rather than have the trustee act as that successor.

Notwithstanding the foregoing discussion in this ‘‘—Rights Upon Event of Default’’ section, if the master servicer is terminated under the circumstances described above because of the occurrence of any of the events of default described in the last four bullets under ‘‘—Events of Default’’ above, the master servicer will have the right for a period of approximately 45 days—during which time the master servicer will continue to master service the mortgage loans—to sell its master servicing rights with respect to the mortgage pool to a master servicer whose appointment S&P and Fitch have each confirmed will not result in a qualification, downgrade or withdrawal of any of the then-current ratings of the series 2006-C7 certificates. The terminated master servicer is responsible for all out-of-pocket expenses incurred in connection with the attempt to sell its rights to master service the underlying mortgage loans, to the extent such expenses are not reimbursed by the replacement servicer.

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In general, series 2006-C7 certificateholders entitled to at least 66 2/3% of the voting rights allocated to each class of series 2006-C7 certificates affected by any event of default may waive the event of default. However, some events of default may only be waived by all of the holders of the affected classes of the series 2006-C7 certificates. In addition, any waiver of an event of default under the second bullet of the ‘‘—Events of Default’’ section above in this prospectus supplement requires the written consent of the trustee; and, in limited circumstances, a waiver of certain events of default under the fourth bullet of the ‘‘—Events of Default’’ section above requires our consent. 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 series 2006-C7 pooling and servicing agreement.

Notwithstanding the foregoing in this ‘‘—Rights Upon Event of Default’’ section, (a) if an event of default on the part of the master servicer affects a Serviced Non-Trust Loan Noteholder, and if the master servicer is not otherwise terminated as provided above, then the master servicer may not be terminated by or at the direction of the related Serviced Non-Trust Loan Noteholder, and (b) furthermore, if an event of default affects solely a Serviced Non-Trust Loan Noteholder, then the master servicer may not be terminated by the trustee. However, in the case of each of clause (a) and (b) of the prior sentence, at the request of the affected Serviced Non-Trust Loan Noteholder, the master servicer must appoint a sub-servicer that will be responsible for servicing the subject Loan Combination.

Also notwithstanding the foregoing in this ‘‘—Rights Upon Event of Default’’ section, if an event of default on the part of the special servicer affects a Serviced Non-Trust Loan and the special servicer is not otherwise terminated as provided above, then the related Serviced Non-Trust Loan Noteholder may, subject to certain conditions, require the termination of the duties and obligations of the special servicer with respect to the subject Loan Combination only, but no other mortgage loan in the trust, in accordance with the terms of the series 2006-C7 pooling and servicing agreement. If the special servicer for a Loan Combination is different from the special servicer for the rest of the mortgage loans serviced under the series 2006-C7 pooling and servicing agreement, then (unless the context indicates otherwise) all references to the special servicer in this prospectus supplement and the accompanying base prospectus are intended to mean the applicable special servicer or both special servicers together, as appropriate in light of the circumstances.

In general, with respect to each Outside Serviced Trust Mortgage Loan, the trustee may waive any event of default on the part of the related master servicer and/or special servicer under the governing servicing agreement only if so directed by series 2006-C7 certificateholders entitled to waive a comparable event of default under the series 2006-C7 pooling and servicing agreement. In the event of any such event of default that is not waived or cured and that materially and adversely affects the trust as holder of the subject Outside Serviced Trust Mortgage Loan, the trustee may (and, at the direction of the series 2006-C7 controlling class representative or the holders of series 2006-C7 certificates entitled to 25% of the series 2006-C7 voting rights, will be required to) pursue such rights, if any, as the holder of the subject Outside Serviced Trust Mortgage Loan may have pursuant to the applicable servicing agreement. The trustee, as holder of the 1211 Avenue of the Americas Mortgage Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan, will have substantially the same rights in respect of events of default on the part of the master servicer and/or the special servicer under the applicable governing servicing agreement as are granted to the Serviced Non-Trust Loan Noteholders in respect of events of default on the part of the master servicer and/or the special servicer under the series 2006-C7 pooling and servicing agreement. Subject to any waiver of the subject event of default on substantially the same terms as are applicable to an event of default under the series 2006-C7 pooling and servicing agreement, the trustee will be required to exercise those rights at the direction of the series 2006-C7 controlling class representative or the holders of series 2006-C7 certificates entitled to at least 25% of the series 2006-C7 voting rights.

No series 2006-C7 certificateholder will have the right under the series 2006-C7 pooling and servicing agreement to institute any suit, action or proceeding with respect to that agreement or any underlying mortgage loan unless—

•  that holder previously has given to the trustee written notice of default,
•  except in the case of a default by the trustee, series 2006-C7 certificateholders entitled to not less than 25% of the series 2006-C7 voting rights have made written request to the trustee to institute that suit, action or proceeding in its own name as trustee under the series 2006-C7 pooling and servicing agreement and have offered to the trustee such reasonable indemnity as it may require, and
•  except in the case of a default by the trustee, the trustee for 60 days has neglected or refused to institute that suit, action or proceeding.

See ‘‘Description of the Governing Documents—Rights, Protection, Indemnities and Immunities of the Trustee’’ for a description of certain limitations regarding the trustee’s duties with respect to the foregoing matters.

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Administration of the Outside Serviced Trust Mortgage Loans

The Outside Serviced Trust Mortgage Loans and any related REO Property will be serviced and administered in accordance with the governing servicing agreement for the related Loan Combination. If the trustee is requested to take any action in its capacity as holder of an Outside Serviced Trust Mortgage Loan, pursuant to that governing servicing agreement, or if a responsible officer of the trustee becomes aware of a default or event of default on the part of any party under that governing servicing agreement, then (subject to any more specific discussion within this prospectus supplement, including under ‘‘—Rights Upon Event of Default’’ above, with respect to the matter in question) the trustee will notify, and act in accordance with the instructions of, the series 2006-C7 controlling class representative.

SERVICING OF THE 1211 AVENUE OF THE AMERICAS LOAN COMBINATION
AND THE TRIANGLE TOWN CENTER LOAN COMBINATION

The series 2006-C6 pooling and servicing agreement initially governs the servicing and administration of the 1211 Avenue of the Americas Loan Combination and any related REO Property. The series 2006-C6 pooling and servicing agreement is the governing document for the Series 2006-C6 Securitization, which closed prior to the Issue Date. Under the series 2006-C6 pooling and servicing agreement, the master servicer is Wachovia Bank, National Association, the trustee is LaSalle Bank National Association, the initial special servicer is LNR Partners, Inc. and the initial series 2006-C6 controlling class representative (which is comparable to the series 2006-C7 controlling class representative) is an affiliate of that special servicer. The master servicer, special servicer and trustee under the series 2006-C7 pooling and servicing agreement will not have any obligation or authority to supervise the series 2006-C6 master servicer, the series 2006-C6 special servicer or the series 2006-C6 trustee or to make servicing advances with respect to the 1211 Avenue of the Americas Loan Combination.

The series 2006-C1 pooling and servicing agreement initially governs the servicing and administration of the Triangle Town Center Loan Combination and any related REO Property. The series 2006-C1 pooling and servicing agreement is the governing document for the Series 2006-C1 Securitization, which closed prior to the Issue Date. Under the series 2006-C1 pooling and servicing agreement, the master servicer is Wachovia Bank, National Association, the trustee is LaSalle Bank National Association and the initial special servicer is LNR Partners, Inc. The master servicer, special servicer and trustee under the series 2006-C7 pooling and servicing agreement will not have any obligation or authority to supervise the series 2006-C1 master servicer, the series 2006-C1 special servicer or the series 2006-C1 trustee or to make servicing advances with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan.

Each of the series 2006-C6 pooling and servicing agreement and the series 2006-C1 pooling and servicing agreement provides for servicing in a manner acceptable for rated transactions similar in nature to the series 2006-C7 securitization and the servicing arrangements under each of the series 2006-C6 pooling and servicing agreement and the series 2006-C1 pooling and servicing agreement are generally similar, but not identical, to the servicing arrangements under the series 2006-C7 pooling and servicing agreement. In that regard, with respect to each of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination:

•  one or more parties to the related pooling and servicing agreement will be responsible for making servicing advances with respect to the subject Loan Combination, which servicing advances will be reimbursable (with interest at a published prime rate) to the maker thereof out of collections on the subject Loan Combination, and none of the parties to that agreement (in their capacities under such agreement) will have any right or duty to make advances of delinquent debt service payments on the 1211 Avenue of the Americas Mortgage Loan or the Triangle Town Center Loan Combination, as the case may be;
•  the mortgage loans that form the subject Loan Combination are to be serviced and administered under a general servicing standard that is substantially similar (but not identical) to the Servicing Standard under the series 2006-C7 pooling and servicing agreement and as if they were a single mortgage loan indebtedness under that agreement (subject to any rights of the related Loan Combination Controlling Party or a representative on its behalf to consult or advise with respect to, or to approve or disapprove, various servicing-related actions involving the subject Loan Combination);
•  the mortgage loans that form the subject Loan Combination will become specially serviced mortgage loans if specified events occur, which events are substantially similar (but not identical) to the Servicing Transfer Events under the Series 2006-C7 pooling and servicing agreement, in which case the party serving as the special servicer under the related pooling and servicing agreement will be entitled to (among other things) special servicing fees, workout fees and/or liquidation fees with respect to the 1211 Avenue of the Americas Mortgage Loan or the Triangle

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  Town Center Subordinate Tranche Mortgage Loan, as the case may be, that arise and are payable in a manner and to an extent that is substantially similar to the special servicing fees, workout fees and/or liquidation fees that are payable to the special servicer under the series 2006-C7 pooling and servicing agreement with respect to other underlying mortgage loans, except that the special servicing fee under each related pooling and servicing agreement is calculated at 0.35% per annum and, in the case of the entire subject Loan Combination, subject to a $4,000 monthly minimum;
•  any modification, extension, waiver or amendment of the payment terms of the subject Loan Combination is required to be structured so as to be consistent with the allocation and payment priorities in the related mortgage loan documents and the related Co-Lender Agreement, such that neither the trust as holder of the 1211 Avenue of the Americas Mortgage Loan or the Triangle Town Center Subordinate Tranche Mortgage Loan, as the case may be, nor any holder of a related Non-Trust Loan gains a priority over the other such holder that is not reflected in the related mortgage loan documents and the related Co-Lender Agreement (taking into account, in the case of the Triangle Town Center Loan Combination, that the Triangle Town Center Subordinate Tranche Mortgage Loan is subordinate to both of the Triangle Town Center Senior Non-Trust Loans);
•  in the case of the 1211 Avenue of the Americas Loan Combination, the master servicer and special servicer under the series 2006-C6 pooling and servicing agreement will each have duties to consult with or obtain the approval of or take direction from the related Loan Combination Controlling Party under that agreement under provisions that are substantially similar to those described in this prospectus supplement with respect to the Extendicare Portfolio Loan Combination (see ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Non-Trust Loan Noteholders’’), subject to the discussion under ‘‘Description of the Mortgage Pool—Loan Combinations—The 1211 Avenue of the Americas Loan Combination—Co-Lender Agreement—Consent Rights’’ in this prospectus supplement, and except that some of the servicing actions as to which the Loan Combination Controlling Party for the 1211 Avenue of the Americas Loan Combination has consent rights, and the time periods within which such Loan Controlling Party must exercise any right to object, may be different in some respects;
•  in connection with the foregoing bullet, if the holder of the 1211 Avenue of the Americas Mortgage Loan and the holder of the 1211 Avenue of the Americas Non-Trust Loan, acting jointly (directly or through representatives) as the related Loan Combination Controlling Party, have not, within the requisite time period provided for in the related Co-Lender Agreement, executed a mutual consent with respect to any advice, consent or direction regarding a specified servicing action, the special servicer or master servicer, as applicable, under the series 2006-C6 pooling and servicing agreement will implement the servicing action that it deems to be in accordance with the applicable servicing standard, and the decision of such special servicer or such master servicer, as applicable, will be binding on all such parties;
•  the holders of a majority interest in the series 2006-C6 controlling class will have the right to replace the special servicer under the series 2006-C6 pooling and servicing agreement on terms and conditions that are similar to those applicable to the replacement of the special servicer under the series 2006-C7 pooling and servicing agreement by the holders of a majority interest in the series 2006-C7 controlling class, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Replacement of the Special Servicer’’ in this prospectus supplement;
•  in the case of the Triangle Town Center Loan Combination, the master servicer and special servicer under the series 2006-C1 pooling and servicing agreement will each have duties to consult with or obtain the approval of or take direction from the related Loan Combination Controlling Party under that agreement under provisions that are substantially similar to those described in this prospectus supplement with respect to the Reston Town Center Loan Combination (see ‘‘The Series 2006-C7 Pooling and Servicing Agreement—The Series 2006-C7 Controlling Class Representative and the Non-Trust Loan Noteholders—Rights and Powers of The Series 2006-C7 Controlling Class Representative and the Non-Trust Loan Noteholders’’), subject to the discussion under ‘‘Description of the Mortgage Pool—Loan Combinations—The Triangle Town Center Loan Combination—Co-Lender Agreement—Consent Rights’’ in this prospectus supplement, and except that some of the servicing actions as to which the Loan Combination Controlling Party for the Triangle Town Center Loan Combination has consent rights may be different in some respects;
•  in the case of the Triangle Town Center Loan Combination, if and for so long as the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan is the related Loan Combination Controlling Party, then the series

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  2006-C7 controlling class representative (as designee of the trust as the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan), depending on the circumstances, will have the right to exercise the rights and powers referred to in the prior bullet and to replace the special servicer with respect to the Triangle Town Center Loan Combination under the series 2006-C1 pooling and servicing agreement;
•  subject to the rights of the holder of the Triangle Town Center Subordinate Tranche Mortgage Loan described in the preceding bullet and the holder of the Triangle Town Center Note B-1 Senior Non-Trust Loan for so long as the holder of the Triangle Town Note B-1 Senior Non-Trust Loan is the related Loan Combination Controlling Party, the holders of a majority interest in the series 2006-C1 controlling class will have the right to replace the special servicer under the series 2006-C1 pooling and servicing agreement on terms and conditions that are similar to those applicable to the replacement of the special servicer under the series 2006-C7 pooling and servicing agreement by the holders of a majority interest in the series 2006-C7 controlling class, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Replacement of the Special Servicer’’ in this prospectus supplement;
•  in general, the respective parties to the related pooling and servicing agreement will have substantially the same limitations on liability and rights to reimbursement and/or indemnification as do the respective parties to the series 2006-C7 pooling and servicing agreement; and
•  if the 1211 Avenue of the Americas Mortgage Loan or the Triangle Town Center Subordinate Tranche Mortgage Loan, as the case may be, becomes no longer subject to the related pooling and servicing agreement, then the subject Loan Combination will be serviced and administered under one or more successor servicing agreements entered into with the master servicer under the related pooling and servicing agreement and, if applicable, the special servicer under the related pooling and servicing agreement, on terms substantially similar to those in the related pooling and servicing agreement, unless that master servicer, that special servicer and the holders of the mortgage loans that form the subject Loan Combination otherwise agree; no such other servicing agreement may be entered into on behalf of the trust as the holder of the 1211 Avenue of the Americas Mortgage Loan or the Triangle Town Center Subordinate Tranche Mortgage Loan, as the case may be, unless the holders of all mortgage loans comprising the subject Loan Combination collectively agree to grant consent to such other servicing agreement; and entry into any successor servicing agreement will be conditioned upon receipt from S&P and Fitch of a written confirmation that entering into that agreement would not result in the withdrawal, downgrade, or qualification, as applicable, of the then current ratings assigned by those rating agencies to any class of series 2006-C7 certificates.

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DESCRIPTION OF THE OFFERED CERTIFICATES

General

The series 2006-C7 certificates will be issued, on or about December 5, 2006, under the series 2006-C7 pooling and servicing agreement. They will represent the entire beneficial ownership interest of the trust. The assets of the trust will include:

•  the underlying mortgage loans;
•  any and all payments under and proceeds of the underlying mortgage loans received after the cut-off date, exclusive of payments of principal, interest and other amounts due on or before that date;
•  the loan documents for the underlying mortgage loans;
•  our rights under our mortgage loan purchase agreement with the UBS Mortgage Loan Seller;
•  our rights under our mortgage loan purchase agreement with the KeyBank Mortgage Loan Seller;
•  any REO Properties acquired by the special servicer on behalf of the trust with respect to defaulted mortgage loans; and
•  those funds or assets as from time to time are deposited in the various transaction accounts described under ‘‘Description of the Series 2006-C7 Pooling and Servicing Agreement—Accounts’’ in this prospectus supplement.

The series 2006-C7 certificates will include the following classes:

•  the X-CP, A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E and F classes, which are the classes of series 2006-C7 certificates that are offered by this prospectus supplement, and
•  the X-CL, X-W, G, H, J, K, L, M, N, P, Q, S, T, R-I, R-II, R-III and V classes, which are the classes of series 2006-C7 certificates that—
1.  will be retained by us or sold in transactions that do not require registration under the Securities Act of 1933, and
2.  are not offered by this prospectus supplement.

The class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates are the series 2006-C7 certificates that will have principal balances and are sometimes referred to as the series 2006-C7 principal balance certificates. The principal balance of any of these certificates will represent the total payments 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. Accordingly, on each distribution date, the principal balance of each of these certificates will be reduced by any payments of principal actually made with respect to the certificate on that distribution date. See ‘‘—Payments’’ below. On any particular distribution date, the principal balance of each of these certificates may also be reduced, without any corresponding payment, in connection with Realized Losses on the underlying mortgage loans and Additional Trust Fund Expenses. See ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ below. However, in limited circumstances, if and to the extent the total Stated Principal Balance of the mortgage pool exceeds the total principal balance of the series 2006-C7 principal balance certificates immediately following the distributions to be made with respect to those certificates on any distribution date, the total principal balance of a class of series 2006-C7 principal balance certificates that was previously so reduced without a corresponding payment of principal, may be reinstated (up to the amount of that prior reduction), with past due interest. See ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ below.

The class X-CL, X-CP, and X-W certificates will not have principal balances and are sometimes referred to as the series 2006-C7 interest-only certificates. For purposes of calculating the amount of accrued interest, each class of series 2006-C7 interest-only certificates will have a total notional amount.

The total notional amount of the class X-CL certificates will equal 30% of the total principal balance of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates outstanding from time to time.

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The total notional amount of the Class X-W certificates will equal 70% of the total principal balance of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates outstanding from time to time.

The total notional amount of the class X-CP certificates will equal:

•  during the period from the date of initial issuance of the series 2006-C7 certificates through and including the distribution date in November 2007, 30% of the sum of (a) the lesser of $418,709,000 and the total principal balance of the class A-1A certificates outstanding from time to time, and (b) the total principal balance of the class A-2, A-AB, A-3, A-M, A-J, B, C, D, E, F, G and H certificates outstanding from time to time;
•  during the period following the distribution date in November 2007 through and including the distribution date in November 2008, 30% of the sum of (a) the lesser of $556,396,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $409,682,000 and the total principal balance of the class A-1A certificates outstanding from time to time, and (c) the total principal balance of the class A-AB, A-3, A-M, A-J, B, C, D, E, F, G and H certificates outstanding from time to time;
•  during the period following the distribution date in November 2008 through and including the distribution date in November 2009, 30% of the sum of (a) the lesser of $450,050,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $392,006,000 and the total principal balance of the class A-1A certificates outstanding from time to time, (c) the total principal balance of the class A-AB, A-3, A-M, A-J, B, C, D, E and F certificates outstanding from time to time, and (d) the lesser of $14,818,000 and the total principal balance of the class G certificates outstanding from time to time;
•  during the period following the distribution date in November 2009 through and including the distribution date in November 2010, 30% of the sum of (a) the lesser of $347,045,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $375,364,000 and the total principal balance of the class A-1A certificates outstanding from time to time, (c) the total principal balance of the class A-AB, A-3, A-M, A-J, B and C certificates outstanding from time to time, and (d) the lesser of $23,751,000 and the total principal balance of the class D certificates outstanding from time to time;
•  during the period following the distribution date in November 2010 through and including the distribution date in November 2011, 30% of the sum of (a) the lesser of $792,881,000 and the total principal balance of the class A-3 certificates outstanding from time to time, (b) the lesser of $285,953,000 and the total principal balance of the class A-1A certificates outstanding from time to time, (c) the total principal balance of the class A-M and A-J certificates outstanding from time to time, and (d) the lesser of $12,080,000 and the total principal balance of the class B certificates outstanding from time to time;
•  during the period following the distribution date in November 2011 through and including the distribution date in November 2012, 30% of the sum of (a) the lesser of $731,645,000 and the total principal balance of the class A-3 certificates outstanding from time to time, (b) the lesser of $266,702,000 and the total principal balance of the class A-1A certificates outstanding from time to time, (c) the total principal balance of the class A-M certificates outstanding from time to time, and (d) the lesser of $258,493,000 and the total principal balance of the class A-J certificates outstanding from time to time;
•  during the period following the distribution date in November 2012 through and including the distribution date in November 2013, 30% of the sum of (a) the lesser of $659,249,000 and the total principal balance of the class A-3 certificates outstanding from time to time, (b) the lesser of $243,708,000 and the total principal balance of the class A-1A certificates outstanding from time to time, (c) the total principal balance of the class A-M certificates outstanding from time to time, and (d) the lesser of $216,155,000 and the total principal balance of the class A-J certificates outstanding from time to time; and
•  following the distribution date in November 2013, $0.

The class R-I, R-II, R-III and V certificates will not have principal balances or notional amounts.

In general, principal balances and notional amounts will be reported on a class-by-class basis. In order to determine the principal balance or notional amount, as applicable, of any of your offered certificates from time to time, you may multiply the original principal balance or notional amount, as applicable, of that certificate as of the Issue Date, 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

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will be the then outstanding total principal balance or notional amount, as applicable, of that class, and the denominator of which will be the original total principal balance or notional amount, as applicable, of that class. Certificate factors will be reported monthly in the trustee’s distribution date statement.

Registration and Denominations

General.    The offered certificates will be issued in book-entry form in original denominations of $10,000 initial principal balance—or, solely in the case of the class X-CP certificates, $250,000 initial notional amount—and in any additional whole dollar denominations.

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 in the accompanying base prospectus under ‘‘Description of the Certificates—Book-Entry Registration.’’ For so long as any class of offered certificates is held in book-entry form—

•  all references 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, notices, reports, statements and other information to holders of those certificates will refer to payments, notices, reports and statements to DTC or Cede & Co., as the registered holder of those certificates, for payment to beneficial owners of offered certificates through its participating organizations in accordance with DTC’s procedures.

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.    You will hold your certificates through DTC, in the United States, or Clearstream Banking 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 and Euroclear will hold omnibus positions on behalf of organizations that are participants in either of these systems, through customers’ securities accounts in Clearstream’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, see ‘‘Description of the Certificates—Book-Entry Registration—DTC, Euroclear and Clearstream’’ in the accompanying base prospectus.

Transfers between participants in DTC will occur in accordance with DTC’s rules. Transfers between participants in Clearstream and Euroclear will occur in accordance with their applicable rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through participants in Clearstream 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. See ‘‘Description of the Certificates— Book-Entry Registration—Holding and Transferring Book-Entry Certificates’’ in the accompanying base prospectus. For additional information regarding clearance and settlement procedures for the offered certificates and for information with respect to tax documentation procedures relating to the offered certificates, see Annex G hereto.

Payments

General.    For purposes of allocating payments on certain classes of the offered certificates, the pool of mortgage loans backing the series 2006-C7 certificates will be divided into:

1.  Loan Group 1, which will consist of 141 underlying mortgage loans, with an Initial Loan Group 1 Balance of $2,592,035,525, representing approximately 85.8% of the Initial Mortgage Pool Balance.
2.  Loan Group 2, which will consist of 43 underlying mortgage loans, with an Initial Loan Group 2 Balance of $427,623,015, representing approximately 14.2% of the Initial Mortgage Pool Balance.

On each distribution date, the trustee will, subject to the available funds, make all payments required to be made on the series 2006-C7 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 payments are to occur. The final payment of principal and/or interest on

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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 payment.

In order for a series 2006-C7 certificateholder to receive payments by wire transfer on and after any particular distribution date, that certificateholder must provide the trustee with written wiring instructions no less than five business days prior to the record date for that distribution date (or, in the case of the initial distribution date, no later than the close of business on the later of (a) the fifth business day prior to the record date for the initial distribution date and (b) the Issue Date). Otherwise, that certificateholder will receive its payments by check mailed to it.

Cede & Co. will be the registered holder of your offered certificates, and you will receive payments on your offered certificates through DTC and its participating organizations, until physical certificates are issued to the actual beneficial owners. See ‘‘—Registration and Denominations’’ above.

Payments of Interest.    All of the classes of the series 2006-C7 certificates, except for the R-I, R-II, R-III and V classes, will bear interest.

With respect to each interest-bearing class of the series 2006-C7 certificates, that interest will accrue during each interest accrual period based upon—

•  the pass-through rate applicable for that particular class of series 2006-C7 certificates for that interest accrual period,
•  the total principal balance or notional amount, as the case may be, of that particular class of series 2006-C7 certificates outstanding immediately prior to the related distribution date, and
•  the assumption that each year consists of twelve 30-day months.

However, no interest will accrue with respect to the class X-CP certificates following the interest accrual period that ends in November 2013.

On each distribution date, subject to the Available P&I Funds for that date and the priority of payments described under ‘‘—Payments—Priority of Payments’’ below, the total amount of interest distributable with respect to each interest-bearing class of the series 2006-C7 certificates will equal—

•  the total amount of interest accrued during the related interest accrual period with respect to that class of series 2006-C7 certificates, reduced by
•  the portion of any Net Aggregate Prepayment Interest Shortfall for that distribution date that is allocable to that class of series 2006-C7 certificates.

If the full amount of interest distributable with respect to any interest-bearing class of the series 2006-C7 certificates is not paid on any distribution date, then the unpaid portion of that interest will continue to be payable on future distribution dates, subject to the Available P&I Funds for those future distribution dates and the priorities of payment described under ‘‘—Payments—Priority of Payments’’ below. However, no interest will accrue on any of that unpaid interest.

The Net Aggregate Prepayment Interest Shortfall for any distribution date will be allocated on a pro rata basis in accordance with the respective amounts of accrued interest in respect of each such class of series 2006-C7 certificates for the related interest accrual period.

Calculation of Pass-Through Rates.    The table on page S-7 of this prospectus supplement provides the initial pass-through rate for each interest-bearing class of the series 2006-C7 certificates, provided that as and when indicated thereon that initial pass-through rate is approximate. Set forth below is a description of how the pass-through rate will be calculated with respect to each class of the series 2006-C7 certificates.

The pass-through rates for the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, L, M, N, P, Q, S and T certificates will, in the case of each of those classes, be fixed at the rate per annum identified in the table on page S-7 of this prospectus supplement as the initial pass-through rate for the subject class.

The pass-through rates for the class D, E, F and G certificates will, in the case of each of those classes, generally be fixed at the rate per annum identified in the table on page S-7 of this prospectus supplement as the initial pass-through rate for the subject class. However, with respect to any interest accrual period, if the applicable Weighted Average Pool Pass-Through Rate is below the identified initial pass-through rate for the class D, E, F or G certificates, as the case may be, then the pass-through rate that will be in effect for the subject class of series 2006-C7 certificates during that interest accrual period will be that Weighted Average Pool Pass-Through Rate.

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The pass-through rates for the class H, J and K certificates will, in the case of each of those classes, for any interest accrual period, equal the Weighted Average Pool Pass-Through Rate for that interest accrual period, minus a specified class margin. That class margin is, as to each such class, set forth below.


Class Class
Margin
H 0.39%
J 0.26%
K 0.07%

The pass-through rate for the class X-CP certificates, for each interest accrual period from and including the initial interest accrual period through and including the interest accrual period that ends in November 2013, will equal the weighted average of the respective strip rates, which we refer to as class X-CP strip rates, at which interest accrues during the subject interest accrual period on the respective components (each, a ‘‘Class X-CP Component’’) of the total notional amount of the class X-CP certificates outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relative sizes of those Class X-CP Components. Each Class X-CP Component will be comprised of 30%, or a lesser designated portion, of the total principal balance of a specified class of series 2006-C7 principal balance certificates, as described under ‘‘—General’’ above. If any portion of the total principal balance of any class of series 2006-C7 principal balance certificates is identified under ‘‘—General’’ above as being part of the total notional amount of the class X-CP certificates outstanding immediately prior to any distribution date, then such portion of the total principal balance of that particular class of series 2006-C7 principal balance certificates will represent a separate Class X-CP Component for purposes of calculating the accrual of interest during the related interest accrual period.

For purposes of accruing interest during any interest accrual period, from and including the initial interest accrual period through and including the interest accrual period that ends in November 2013, on any particular Class X-CP Component in effect immediately prior to the related distribution date, the applicable class X-CP strip rate will equal the excess, if any, of:

(1)  the lesser of (a) the reference rate specified on Annex E to this prospectus supplement for that interest accrual period and (b) the Weighted Average Pool Pass-Through Rate for that interest accrual period, over
(2)  the pass-through rate in effect during that interest accrual period for the class of series 2006-C7 principal balance certificates that relates to the subject Class X-CP Component.

Following the interest accrual period that ends in November 2013, the class X-CP certificates will cease to accrue interest. In connection therewith, the class X-CP certificates will have a 0% pass-through rate for the interest accrual period beginning in November 2013 and for each interest accrual period thereafter.

The pass-through rate for the class X-CL certificates for any interest accrual period will equal the weighted average of the respective strip rates, which we refer to as class X-CL strip rates, at which interest accrues during that interest accrual period on the respective components (each, a ‘‘Class X-CL Component’’) of the total notional amount of the class X-CL 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 Class X-CL Component will be comprised of 30%, or a lesser designated portion, of the total principal balance of one of the classes of series 2006-C7 principal balance certificates. With respect to any distribution date and any class of series 2006-C7 principal balance certificates:

(1)   if there is, as described under ‘‘—General’’ above, a Class X-CP Component that relates to such class immediately prior to such distribution date, and such Class X-CP Component is less than 30% of the total principal balance of such class, then, for purposes of calculating the accrual of interest during the related interest accrual period, there will be two separate Class X-CL Components that relate to such class of series 2006-C7 principal balance certificates—one Class X-CL Component that will equal the difference between (x) 30% of the total principal balance of such class of series 2006-C7 principal balance certificates, and (y) the amount of the Class X-CP Component identified under ‘‘—General’’ above as relating to such class of series 2006-C7 principal balance certificates immediately prior to such distribution date, and a second Class X-CL Component that will equal the amount of the Class X-CP Component identified under clause (y) above; and
(2)   in all other cases, for purposes of calculating the accrual of interest during the related interest accrual period, 30% of the total principal balance of such class of series 2006-C7 principal balance certificates will constitute a sole, separate Class X-CL Component for such class of series 2006-C7 principal balance certificates.

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For purposes of accruing interest during any interest accrual period, from and including the initial interest accrual period through and including the interest accrual period that ends in November 2013, on any particular Class X-CL Component in effect immediately prior to the related distribution date, the applicable class X-CL strip rate will be calculated as follows:

(1)  if the subject Class X-CL Component consists of 30%, or a lesser designated portion, of the total principal balance of any particular class of series 2006-C7 principal balance certificates, and if such 30%, or lesser designated portion, of such total principal balance also constitutes a Class X-CP Component immediately prior to the related distribution date, then the applicable class X-CL strip rate will equal the excess, if any, of (a) the Weighted Average Pool Pass-Through Rate for that interest accrual period, over (b) the greater of (i) the reference rate specified on Annex E to this prospectus supplement for that interest accrual period and (ii) the pass-through rate in effect during that interest accrual period for that class of series 2006-C7 principal balance certificates; and
(2)  if the subject Class X-CL Component consists of 30%, or a lesser designated portion, of the total principal balance of any class of series 2006-C7 principal balance certificates, and if such 30%, or lesser designated portion, of such total principal balance does not also constitute a Class X-CP Component immediately prior to the related distribution date, then the applicable class X-CL strip rate will equal the excess, if any, of (a) the Weighted Average Pool Pass-Through Rate for that interest accrual period, over (b) the pass-through rate in effect during that interest accrual period for that class of series 2006-C7 principal balance certificates.

Notwithstanding the foregoing, for purposes of accruing interest on the class X-CL certificates during each interest accrual period subsequent to the interest accrual period that ends in November 2013, 30% of the total principal balance of each class of series 2006-C7 principal balance certificates will constitute a single separate Class X-CL Component, and the applicable class X-CL strip rate with respect to each Class X-CL Component for each of those interest accrual periods will equal the excess, if any, of (a) the Weighted Average Pool Pass-Through Rate for the subject interest accrual period, over (b) the pass-through rate in effect during the subject interest accrual period for the subject class of series 2006-C7 principal balance certificates.

The pass-through rate for the class X-W certificates for any interest accrual period will equal the weighted average of the respective strip rates, which we refer to as class X-W strip rates, at which interest accrues during that interest accrual period on the respective components (each, a ‘‘Class X-W Component’’) of the total notional amount of the class X-W certificates outstanding immediately prior to the related distribution date, with the relative weighting to be done based upon the relative sizes of those Class X-W Components. Each of those Class X-W Components will be comprised of 70% of the total principal balance of one of the classes of series 2006-C7 principal balance certificates.

For purposes of accruing interest on the class X-W certificates during any interest accrual period, the applicable class X-W strip rate with respect to each Class X-W Component in effect immediately prior to the related distribution date will equal the excess, if any, of (a) the Weighted Average Pool Pass-Through Rate for the subject interest accrual period, over (b) the pass-through rate in effect during the subject interest accrual period for the class of series 2006-C7 principal balance certificates that relates to that Class X-W Component.

The calculation of the Weighted Average Pool Pass-Through Rate will be unaffected by any change in the mortgage interest rate for any underlying mortgage loan from what it was on the Issue Date, 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-I, R-II, R-III and V certificates will not be interest-bearing and, therefore, will not have pass-through rates.

Payments of Principal.    Subject to the Available P&I Funds for each distribution date and the priority of payments described under ‘‘—Payments—Priority of Payments’’ below, the holders of each class of series 2006-C7 principal balance certificates will be entitled to receive a total amount of principal over time equal to the total principal balance of that class. In addition, subject to available funds, the total payments of principal to be made on the series 2006-C7 principal balance certificates on any distribution date will generally equal the Total Principal Distribution Amount for that distribution date.

On each distribution date, after all required payments of interest have been made with respect to the class X-CL, X-CP, X-W, A-1, A-2, A-AB, A-3 and A-1A certificates on that date, the trustee will be required to apply any and all remaining Available P&I Funds to make payments of principal with respect to the class A-1, A-2, A-AB, A-3 and A-1A certificates. In general:

•  except as otherwise discussed in the paragraph following these bullets, no payments of principal with respect to Loan Group 1 will be made to the holders of the class A-1A certificates until the total principal balance of the class A-1, A-2, A-AB and A-3 certificates is reduced to zero;

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•  except as otherwise discussed in the paragraph following these bullets, no payments of principal with respect to Loan Group 2 will be made to the holders of the class A-1, A-2, A-AB and/or A-3 certificates until the total principal balance of the class A-1A certificates is reduced to zero;
•  on any given distribution date, except as otherwise discussed in the paragraph following these bullets, no payments of principal will be made to the holders of the class A-1, A-2, A-AB and/or A-3 certificates until the holders of the class A-1A certificates have received all payments of principal to which they are entitled on that distribution date with respect to Loan Group 2;
•  on any given distribution date, beginning with the distribution date in November 2011, except as otherwise discussed in the paragraph following these bullets, the total principal balance of the class A-AB certificates must be paid down to the Class A-AB Planned Principal Balance for that distribution date before any payments of principal are made with respect to the class A-1, A-2 and/or A-3 certificates; and
•  except as otherwise discussed in the paragraph following these bullets, no payments of principal will be made to the holders of the class A-3 certificates until the total principal balance of the class A-1, A-2 and A-AB certificates is reduced to zero, no payments of principal will be made to the holders of the class A-AB certificates—other than as described in the immediately preceding bullet—until the total principal balance of the class A-1 and A-2 certificates is reduced to zero, and no payments of principal will be made to the holders of the class A-2 certificates until the total principal balance of the class A-1 certificates is reduced to zero.

Notwithstanding the foregoing, on each distribution date coinciding with or following the Class A Senior Principal Payment Cross-Over Date, and in any event on the final distribution date in connection with the termination of the trust, assuming that any two or more of the A-1, A-2, A-AB, A-3 and A-1A classes are outstanding at that time, payments of principal on the outstanding class A-1, A-2, A-AB, A-3 and A-1A certificates, will be made up to, and on a pro rata basis in accordance with, the respective total principal balances of those classes of series 2006-C7 certificates then outstanding.

The ‘‘Class A-AB Planned Principal Balance’’ for any distribution date is the scheduled principal balance specified for that distribution date on Annex F to this prospectus supplement. Such principal balances were calculated using, among other things, the Modeling Assumptions and a 0% CPR. Based on the Modeling Assumptions and a 0% CPR, the total principal balance of the class A-AB certificates on each distribution date would be reduced to approximately the scheduled principal balance indicated for that distribution date on Annex F to this prospectus supplement. There is no assurance, however, that the underlying mortgage loans will not be subject to prepayment or that they will perform in conformity with the Modeling Assumptions. Therefore, there can be no assurance that the total principal balance of the class A-AB certificates on any distribution date will be equal to—and, furthermore, following retirement of the class A-1 and A-2 certificates, there can be no assurance that the total principal balance of the class A-AB certificates will not be less than—the principal balance that is specified for such distribution date on Annex F to this prospectus supplement.

In general, subject to the available funds and the priority of payments described under ‘‘—Payments—Priority of Payments’’ below, the holders of the class A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates will be entitled on each distribution date to payments of principal in an amount that will, in the case of each of those classes, generally equal the lesser of:

•  the total principal balance of the subject class of series 2006-C7 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 payments of principal made on the subject distribution date with respect to all other more senior classes of series 2006-C7 principal balance certificates, as described under ‘‘—Payments—Priority of Payments’’ below.

In no event will the holders of the class A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates be entitled to receive any payments of principal until the total principal balance of the class A-1, A-2, A-AB, A-3 and A-1A Certificates is reduced to zero. Furthermore, in no event will the holders of any class of series 2006-C7 principal balance certificates (exclusive of the class A-1, A-2, A-AB, A-3 and A-1A certificates) be entitled to receive any payments of principal until the total principal balance of all other more senior classes of series 2006-C7 principal balance certificates is reduced to zero.

Notwithstanding the foregoing, on the final distribution date in connection with a termination of the trust, subject to the Available P&I Funds for that final distribution date and the priority of payments described under ‘‘—Payments—Priority of Payments’’ below, the holders of each class of series 2006-C7 principal balance certificates will be entitled to payments of principal, up to the total principal balance of that class of series 2006-C7 principal balance certificates outstanding immediately prior to that final distribution date.

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If the master servicer, the special 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 in the trust, then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed (i) first, out of payments and other collections of principal on the underlying mortgage loans otherwise distributable on the series 2006-C7 principal balance certificates, and (ii) then, out of payments and other collections of interest on the underlying mortgage loans otherwise distributable on the series 2006-C7 certificates, thereby reducing the payments of principal on the series 2006-C7 principal balance certificates. As a result, the Total Principal Distribution Amount for the corresponding distribution date would be reduced, to not less than zero, by the amount of any such reimbursement. In addition, if payments and other collections of principal on the mortgage pool are applied to reimburse, or pay interest on, any advance that is determined to be nonrecoverable from collections on the related mortgage loan (or, if such mortgage loan is part of the Serviced Loan Combination, on or in respect of such Loan Combination), as described in the prior sentence, then that advance will be reimbursed, and/or interest thereon will be paid, first, out of payments or other collections of principal on the loan group that includes the subject mortgage loan as to which the advance was made, and then, out of payments or other collections of principal on the other loan group.

If any advance is considered to be nonrecoverable from collections on the related underlying mortgage loan and, therefore, is reimbursed out of payments and other collections of principal with respect to the entire mortgage pool as described in the preceding paragraph, and if there is a subsequent recovery of that item, that subsequent recovery would generally be included as part of the amounts payable as principal with respect to the series 2006-C7 principal balance certificates. In addition, if any advance is determined to be nonrecoverable from collections on the related underlying mortgage loan and, therefore, interest on that advance is paid out of general principal collections on the mortgage pool, and if interest on that advance is subsequently reimbursed to the trust out of Default Interest, late payment charges or any other amounts collected on the underlying mortgage loan as to which that advance was made, then the portion of such Default Interest, late payment charge or other amount that was applied to reimburse the trust for interest on that advance would also generally be included as amounts payable as principal with respect to the series 2006-C7 principal balance certificates. For purposes of determining the respective portions of the Total Principal Distribution Amount attributable to each loan group, those subsequent recoveries that are to be included as amounts payable as principal with respect to the series 2006-C7 principal balance certificates will be deemed allocated to offset the corresponding prior reductions in amounts attributable to each loan group in reverse order to that set forth in the last sentence of the prior paragraph.

The class X-CL, X-CP, X-W, R-I, R-II, R-III and V certificates do not have principal balances and do not entitle their respective holders to payments of principal.

Reimbursement Amounts.    As discussed under ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ below, the total principal balance of any class of series 2006-C7 principal balance certificates may be reduced without a corresponding payment of principal. If that occurs with respect to any class of series 2006-C7 principal balance certificates, then, subject to the Available P&I Funds and the priority of payments described under ‘‘—Payments—Priority of Payments’’ below, the holders of that class will be entitled to be reimbursed for the amount of that reduction, without interest. References to the ‘‘loss reimbursement amount’’ under ‘‘—Payments— Priority of Payments’’ below and elsewhere in this prospectus supplement mean, in the case of any class of series 2006-C7 principal balance certificates, for any distribution date, the total amount to which the holders of that class will be 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 ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ below.

In limited circumstances, if and to the extent the total Stated Principal Balance of the mortgage pool exceeds the total principal balance of the series 2006-C7 principal balance certificates immediately following the distributions to be made with respect to those certificates on any distribution date, the total principal balance of a class of series 2006-C7 principal balance certificates that was previously reduced as described in the preceding paragraph without a corresponding payment of principal, may be reinstated (up to the amount of the prior reduction), with past due interest. Any such reinstatement of principal balance would result in a corresponding reduction in the loss reimbursement amount otherwise payable to the holders of the subject class of series 2006-C7 principal balance certificates. See ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ below.

Priority of Payments.    On each distribution date, the trustee will apply the Available P&I Funds for that date for the following purposes and in the following order of priority, in each case to the extent of the remaining Available P&I Funds:

(1)  concurrently, (a) from the portion of the Available P&I Funds attributable to Loan Group 2, to pay interest to the

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  holders of the class A-1A certificates up to the total amount of interest payable with respect to such class on the subject distribution date, (b) from the portion of the Available P&I Funds attributable to Loan Group 1, to pay interest to the holders of the class A-1, A-2, A-AB and A-3 certificates, pro rata in accordance with their respective interest entitlements, up to the total amount of interest payable with respect to each such class on the subject distribution date, and (c) from any and all Available P&I Funds, to pay interest to the holders of the class X-CL, X-CP and X-W certificates, pro rata in accordance with their respective interest entitlements, up to the total amount of interest payable with respect to each such class on the subject distribution date; provided, however, that if the Available P&I Funds for the subject distribution date, or the applicable portion of those Available P&I Funds attributable to either loan group, is insufficient to pay in full the total amount of interest to be distributable 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 pay principal to the holders of the class A-1A certificates, until the total principal balance of the class A-1A 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 2;
(3)  to pay principal to the holders of the class A-AB certificates, in an amount up to the lesser of (a) the Total Principal Distribution Amount for the subject distribution date, exclusive of any payments of principal made with respect to the class A-1A certificates on the subject distribution date as described in the immediately preceding clause (2), and (b) the excess, if any, of (i) the total principal balance of the class A-AB certificates outstanding immediately prior to the subject distribution date, over (ii) the Class A-AB Planned Principal Balance for the subject distribution date;
(4)  to pay principal to the holders of the class A-1, A-2, A-AB, A-3 and A-1A certificates, sequentially among those classes in that order, in each case until the total principal balance of the subject class of series 2006-C7 certificates has been reduced to zero, in an aggregate amount up to the Total Principal Distribution Amount for the subject distribution date, exclusive of any payments of principal made with respect to the class A-1A and/or A-AB certificates on the subject distribution date as described in the immediately preceding clauses (2) and (3); and
(5)  to make payments to the holders of the class A-1, A-2, A-AB, A-3 and A-1A 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 Class A Senior Principal Payment Cross-Over Date, and in any event on the final distribution date, assuming any two or more of the A-1, A-2, A-AB, A-3 and A-1A classes are outstanding at that time, the allocations and order of principal payments described in clauses (2), (3) and (4) above will be ignored and payments of principal on the A-1, A-2, A-AB, A-3 and/or A-1A classes will be made up to, and on a pro rata basis in accordance with, the respective total principal balances of those classes then outstanding.

On each distribution date, following the payments to be made with respect to the class A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP and X-W certificates as described above, the trustee will apply any remaining Available P&I Funds for that date to make the following payments in the following order of priority, in each case to the extent of the remaining Available P&I Funds:

(1)  payments to the holders of the class A-M certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class A-M certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class A-M 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 the class A-1, A-2, A-AB, A-3 and A-1A certificates outstanding immediately prior to the subject distribution date, and

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third, as a reimbursement, up to the then loss reimbursement amount for the class A-M certificates;

(2)  payments to the holders of the class A-J certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class A-J certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class A-J 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 the class A-1, A-2, A-AB, A-3, A-1A and A-M certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class A-J certificates;

(3)  payments to the holders of the class B certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class B certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class B 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M and A-J certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class B certificates;

(4)  payments to the holders of the class C certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class C certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class C 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J and B certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class C certificates;

(5)  payments to the holders of the class D certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class D certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class D 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B and C certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class D certificates;

(6)  payments to the holders of the class E certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class E certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class E 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C and D certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class E certificates;

(7)  payments to the holders of the class F certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class F certificates on the subject distribution date,

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second, in respect of principal, until the total principal balance of the class F 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D and E certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class F certificates;

(8)  payments to the holders of the class G certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class G certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class G 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E and F certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class G certificates;

(9)  payments to the holders of the class H certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class H certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class H 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F and G certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class H certificates;

(10)  payments to the holders of the class J certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class J certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class J 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G and H certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class J certificates;

(11)  payments to the holders of the class K certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class K certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class K 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H and J certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class K certificates;

(12)  payments to the holders of the class L certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class L certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class L 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J and K certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class L certificates;

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(13)  payments to the holders of the class M certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class M certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class M 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K and L certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class M certificates;

(14)  payments to the holders of the class N certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class N certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class N 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L and M certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class N certificates;

(15)  payments to the holders of the class P certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class P certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class P 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M and N certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class P certificates;

(16)  payments to the holders of the class Q certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class Q certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class Q 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N and P certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class Q certificates;

(17)  payments to the holders of the class S certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class S certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class S 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 the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P and Q certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class S certificates;

(18)  payments to the holders of the class T certificates—

first, in respect of interest, up to the total amount of interest payable with respect to the class T certificates on the subject distribution date,

second, in respect of principal, until the total principal balance of the class T 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

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the total principal balance of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q and S certificates outstanding immediately prior to the subject distribution date, and

third, as a reimbursement, up to the then loss reimbursement amount for the class T certificates; and

(19)  payments to the holders of the class R-I, R-II and R-III certificates, up to the amount of any remaining Available P&I Funds;

provided that, on the final distribution date, subject to the Available P&I Funds for such distribution date and the priority of payments described above in this paragraph, the holders of each class of series 2006-C7 principal balance certificates referred to above in this paragraph will be entitled to receive payments of principal sufficient to retire their certificates, without regard to the Total Principal Distribution Amount for the final distribution date.

Payments of Prepayment Premiums and Yield Maintenance Charges.    If any prepayment consideration is collected during any particular collection period with respect to any mortgage loan in the trust, regardless of whether that prepayment consideration is calculated as a percentage of the amount prepaid or in accordance with a yield maintenance formula, then on the distribution date corresponding to that collection period, the trustee will pay a portion of that prepayment consideration to the holders of any class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G, H, J or K certificates that are then entitled to payments of principal on such distribution date from the loan group (i.e., Loan Group 1 or Loan Group 2) that includes the prepaid mortgage loan, up to an amount equal to, in the case of any particular class of those series 2006-C7 certificates, the product of—

•  the amount of that prepayment consideration, net of workout fees and/or liquidation fees payable in connection with the receipt of that prepayment consideration, multiplied by
•  a fraction, which in no event may be greater than 1.0 or less than 0.0, the numerator of which is equal to the excess, if any, of the pass-through rate for that class of series 2006-C7 principal balance 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 of the prepaid mortgage loan over the relevant Discount Rate, and further multiplied by
•  a fraction, the numerator of which is equal to the amount of principal payable to the holders of that class of series 2006-C7 principal balance certificates on that distribution date with respect to the loan group that includes the prepaid mortgage loan, and the denominator of which is the portion of the Total Principal Distribution Amount for that distribution date attributable to the loan group that includes the prepaid mortgage loan.

The trustee will thereafter pay any remaining portion of that prepayment consideration, net of workout fees and/or liquidation fees payable in connection with the receipt of that prepayment consideration, to the holders of the class X-CL certficates, the holders of the class X-CP certificates and/or the holders of the class X-W certificates, allocable between such classes as follows:

•  on any distribution date up to and including the distribution date in November 2010,
1.  25.5% thereof to the holders of the class X-CL certificates,
2.  4.5% thereof to the holders of the class X-CP certificates; and
3.  70% thereof to the holders of the class X-W certificates; and
•  on any distribution date subsequent to the distribution date in November 2010,
1.  30% thereof to the holders of the class X-CL certificates, and
2.  70% thereof to the holders of the class X-W certificates.

Neither we nor the underwriters make any representation as to—

•  the enforceability of the provision of any promissory note evidencing one of the underlying mortgage loans requiring the payment of a prepayment premium or yield maintenance charge, or
•  the collectability of any prepayment premium or yield maintenance charge.

See ‘‘Description of the Mortgage Pool—Terms and Conditions of the Underlying Mortgage Loans—Prepayment Provisions’’ in this prospectus supplement.

Payments of Post-ARD Additional Interest.    On each Distribution Date, the holders of the class V certificates will be entitled to all amounts, if any, applied as Post-ARD Additional Interest collected on the ARD Loans in the trust during the related collection period.

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Treatment of REO Properties

Notwithstanding that any mortgaged real property securing an underlying mortgage loan may become an REO Property through foreclosure, deed in lieu of foreclosure or otherwise, the related mortgage loan(s) will be treated as having remained outstanding, until the REO Property is liquidated, for purposes of determining—

•  payments on the series 2006-C7 certificates,
•  allocations of Realized Losses and Additional Trust Fund Expenses to the series 2006-C7 certificates, and
•  the amount of all fees payable to the master servicer, the special servicer and the trustee under the series 2006-C7 pooling and servicing agreement.

In connection with the foregoing, the related underlying mortgage loan will be taken into account when determining the Weighted Average Pool Pass-Through Rate and the Total Principal Distribution Amount for each distribution date.

Operating revenues and other proceeds derived from an REO Property administered under the series 2006-C7 pooling and servicing agreement will be applied—

•  first, to pay, or to reimburse the master servicer, the special servicer and/or the trustee for the payment of, some of the 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(s).

To the extent described under ‘‘Description of the Series 2006-C7 Pooling and Servicing Agreement—Advances— Advances of Delinquent Monthly Debt Service Payments’’ in this prospectus supplement, the master servicer and the trustee will be required to advance delinquent monthly debt service payments with respect to each underlying 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.

Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses

As a result of Realized Losses and Additional Trust Fund Expenses, the total Stated Principal Balance of the mortgage pool may decline below the total principal balance of the series 2006-C7 principal balance certificates. If this occurs following the payments made to the series 2006-C7 certificateholders on any distribution date, then the respective total principal balances of the following classes of the series 2006-C7 principal balance certificates are to be successively reduced in the following order, until the total principal balance of those classes of certificates equals the total Stated Principal Balance of the mortgage pool that will be outstanding immediately following that distribution date.

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Order of Allocation Class
1st T
2nd S
3rd Q
4th P
5th N
6th M
7th L
8th K
9th J
10th H
11th G
12th F
13th E
14th D
15th C
16th B
17th A-J
18th A-M
19th A-1, A-2, A-AB, A-3 and A-1A,
pro rata based on total
outstanding principal balances

The reductions in the total principal balances of the respective classes of series 2006-C7 principal balance certificates, as described above, will represent an allocation of the Realized Losses and/or Additional Trust Fund Expenses that caused the particular mismatch in principal balances between (a) the underlying mortgage loans and (b) the respective classes of series 2006-C7 principal balance certificates.

The Realized Loss with respect to a liquidated mortgage loan, or related REO Property, will generally equal the excess, if any, of:

•  the outstanding principal balance of the mortgage loan as of the date of liquidation, together with all accrued and unpaid interest on the mortgage loan to but not including the due date in the collection period in which the liquidation occurred (exclusive, however, of any portion of that interest that represents Default Interest or Post-ARD Additional Interest), over
•  the total amount of Liquidation Proceeds, if any, recovered in connection with the subject liquidation that are available to pay principal of, and interest (other than Default Interest and/or Post-ARD Additional Interest) on, that mortgage loan.

If any portion of the debt due under a mortgage loan is forgiven, whether in connection with a modification, waiver or amendment granted or agreed to by the master servicer or the special servicer or in connection with the bankruptcy, insolvency or similar proceeding involving the related borrower, the amount forgiven (other than Default Interest and Post-ARD Additional Interest) also will be treated as a Realized Loss.

Realized Losses will include advances that are determined to be non-recoverable from collections on the related underlying mortgage loan and are therefore recovered out of general collections on the mortgage pool.

Additional Trust Fund Expenses may include:

•  any special servicing fees, workout fees and liquidation fees paid to the special servicer;
•  any interest paid to the master servicer, the special servicer and/or the trustee with respect to unreimbursed advances, which interest payment, in any particular case, is not covered out of late payment charges and Default Interest actually collected on the related underlying mortgage loan;
•  the cost of various opinions of counsel required or permitted to be obtained in connection with the servicing of the underlying mortgage loans and the administration of the other trust assets that, in any particular case, is not paid for by the related borrower or covered out of late payment charges and Default Interest actually collected on the related underlying mortgage loan;

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•  any unanticipated, non-mortgage loan specific expense of the trust, including—
1.  any reimbursements and indemnifications to the trustee and various related persons described under ‘‘Description of the Governing Documents—Rights, Protections, Indemnities and Immunities of the Trustee’’ in the accompanying base prospectus,
2.  any reimbursements and indemnification to the master servicer, the special servicer, us and various related persons described under ‘‘Description of the Governing Documents—Matters Regarding the Master Servicer, the Special Servicer, the Manager and Us’’ in the accompanying base prospectus, and
3.  any federal, state and local taxes, and tax-related expenses, payable out of the trust assets, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—REO Properties’’ in this prospectus supplement and/or ‘‘Federal Income Tax Consequences—REMICs—Prohibited Transactions Tax and Other Taxes’’ in the accompanying base prospectus;
•  rating agency fees, other than on-going surveillance fees, that, in any particular case, cannot be recovered from the related borrower and are not otherwise covered out of late payment charges and Default Interest actually collected on the related underlying mortgage loan; and
•  any amounts expended on behalf of the trust to remediate an adverse environmental condition at any mortgaged real property securing a defaulted mortgage loan as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Realization Upon Defaulted Mortgage Loans’’ in this prospectus supplement, and that are not paid for by the related borrower or covered out of late payment charges and Default Interest actually collected on the related underlying mortgage loan.

Any expenses under the governing servicing agreement for an Outside Serviced Loan Combination that are similar to the Additional Trust Fund Expenses described above and that relate to such Outside Serviced Loan Combination, are to be paid out of collections on that Loan Combination, could adversely affect amounts available for payments on the series 2006-C7 certificates and, to the extent paid out of amounts otherwise distributable to the trust with respect to the Outside Serviced Trust Mortgage Loan, should be considered Additional Trust Fund Expenses.

The Total Principal Distribution Amount may from time to time include Recovered Amounts. In such circumstances, it is possible that the total Stated Principal Balance of the mortgage pool may exceed the total principal balance of the series 2006-C7 principal balance certificates. If and to the extent that any such excess exists as a result of the payment of Recovered Amounts as principal on the series 2006-C7 principal balance certificates, the total principal balances of one or more classes of series 2006-C7 principal balance certificates that had previously been reduced as described above in this ‘‘—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ section may be increased (in each case, up to the amount of any such prior reduction). Any such increases would be made among the respective classes of series 2006-C7 principal balance certificates in the reverse order that such reductions had been made (i.e., such increases would be made first with respect to the most senior class of series 2006-C7 principal balance certificates with a loss reimbursement amount and thereafter in descending order of seniority); provided that such increases may not result in the total principal balance of the series 2006-C7 principal balance certificates being in excess of the total Stated Principal Balance of the mortgage pool. Any such increases will also be accompanied by a reinstatement of the past due interest on the various interest-bearing classes of the series 2006-C7 certificates that would otherwise have accrued if the reinstated principal amounts had never been written off.

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Fees and Expenses

The following summarizes the related fees and expenses to be paid from the assets of the trust fund and the recipient, general purpose, source and frequency of payments for those fees and expenses:


Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Fees        
Master Servicing Fee / Master Servicer With respect to each KeyBank Mortgage Loan that accrues interest on an Actual/360 Basis, interest accrued at the related annual outside master servicing fee rate for the same number of days as, and on the same principal amount on which, interest accrues or is deemed to accrue from time to time on the subject underlying mortgage loan; and, with respect to each other underlying mortgage loan, one-twelfth of the related annual master servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time on that mortgage loan (3) Compensation First, out of recoveries of interest with respect to that mortgage loan and then, if the subject mortgage loan and any related REO Property has been liquidated, out of general collections on deposit in the custodial account (4) Monthly

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Additional Master Servicing Compensation / Master Servicer •Prepayment interest excesses on underlying mortgage loans that are the subject of a principal prepayment in full or in part after their due date in any collection period Compensation Interest payments made by the related mortgagor intended to cover interest accrued on the subject principal prepayment with respect to the subject mortgage loan during the period from and after the related due date Time to time
•All interest and investment income earned on amounts on deposit in the master servicer’s pool custodial account and in any Loan Combination-specific custodial account Compensation Interest and investment income related to the subject accounts (net of investment losses) Monthly
•All interest and investment income earned on amounts on deposit in the servicing accounts, reserve accounts and the defeasance account maintained by the master servicer, to the extent not otherwise payable to the borrowers Compensation Interest and investment income related to the subject accounts (net of investment losses) Monthly

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
  •Late payment charges and Default Interest actually collected with respect to any underlying mortgage loan in the trust fund during any collection period (and, in the case of an Outside Serviced Trust Mortgage Loan, passed through to the trust), but only to the extent that such late payment charges and Default Interest accrued while it was a non-specially serviced mortgage loan and are not otherwise allocable to pay the following items with respect to the subject mortgage loan: (i) interest on advances; or (ii) Additional Trust Fund Expenses (exclusive of special servicing fees, liquidation fees and workout fees) currently payable or previously paid with respect to the subject mortgage loan or related mortgaged real property from collections on the mortgage pool and not previously reimbursed. Compensation Payments of late payment charges and Default Interest made by mortgagors with respect to the underlying mortgage loans Time to time
Outside Master Servicing Fee / Master Servicer of an Outside Serviced Trust Mortgage Loan With respect to each of the 1211 Avenue of the Americas Mortgage Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan, one-twelfth of the product of the related outside master servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time on the subject underlying mortgage loan. (5) Compensation Out of payments of interest with respect to the subject Outside Serviced Trust Mortgage Loan. Monthly

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Special Servicing Fee / Special Servicer With respect to each underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loans) and Serviced Non-Trust Loan that is being specially serviced or as to which the related mortgaged real property has become an REO Property, one-twelfth of the product of the annual special servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time with respect to such mortgage loan. (6) Compensation Out of general collections on all the mortgage loans and any REO Properties in the trust. (4) Time to time
Outside Special Servicing Fee / Special Servicer of an Outside Serviced Trust Mortgage Loan With respect to the 1211 Avenue of the Americas Mortgage Loan, one-twelfth of the product of the related annual outside special servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time with respect to such mortgage loan (with a minimum of $4,000 per month for the entire related loan combination); and, with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan and each of the related Non-Trust Loans, one-twelfth of the product of the related annual outside special servicing fee rate, multiplied by the principal amount on which interest accrues or is deemed to accrue from time to time with respect to such mortgage loan (with a minimum of $4,000 per month for the entire related loan combination). (5) Compensation Out of amounts otherwise payable to the trust with respect to the subject Outside Serviced Trust Mortgage Loan, either solely or, in any event, prior to being paid out of other payments with respect to the related Outside Serviced Loan Combination, as applicable Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Workout Fee / Special Servicer With respect to each underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loans) and each Serviced Non-Trust Loan that has been and continues to be worked-out, the workout fee rate of 1.0% multiplied by each collection of interest (other than Default Interest and Post-ARD Additional Interest), principal, and prepayment consideration received on the subject mortgage loan for so long as it remains a worked-out mortgage loan Compensation Out of each collection of interest (other than Default Interest and Post-ARD Additional Interest), principal and prepayment consideration received on the subject mortgage loan. (4) Time to time
Liquidation Fee / Special Servicer With respect to any specially serviced mortgage loan (other than, if applicable, an Outside Serviced Trust Mortgage Loan) for which the special servicer obtains a full, partial or discounted payoff and with respect to any specially serviced mortgage loan (other than, if applicable, an Outside Serviced Trust Mortgage Loan) or REO Property for which the special servicer receives any Liquidation Proceeds an amount calculated by application of a liquidation fee rate of 1.0% to the related payment or proceeds (exclusive of Default Interest and Post-ARD Additional Interest). (7) Compensation Out of the full, partial or discounted payoff obtained from the related borrower and/or Liquidation Proceeds (exclusive of any portion of that payment or proceeds that represents a recovery of Default Interest and/or Post-ARD Additional Interest) in respect of the related specially serviced mortgage loan or related REO Property, as the case may be. (4) Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Outside Serviced Trust Mortgage Loan Workout Fee and Liquidation Fee / Special Servicer of an Outside Serviced Trust Mortgage Loan With respect to each Outside Serviced Trust Mortgage Loan (and, in the case of the Triangle Town Center Subordinate Tranche Mortgage Loan, each of the related Non-Trust Loans), the related liquidation fee and workout fee due and owing under the applicable outside servicing agreement, which fees are calculated in substantially the same manner as the comparable fees under the series 2006-C7 pooling and servicing agreement. (8) Compensation Out of amounts otherwise payable to the trust with respect to the subject Outside Serviced Trust Mortgage Loan, either solely or, in any event, prior to being paid out of other payments with respect to the related Outside Serviced Loan Combination, as applicable. Time to time
Additional Special Servicing Compensation / Special Servicer •All interest and investment income earned on amounts on deposit in the special servicer’s REO Account Compensation Interest and investment income related to the subject accounts (net of investment losses) Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
  •Late payment charges and Default Interest actually collected with respect to any mortgage loan (other than the Outside Serviced Trust Mortgage Loans), but only to the extent such late payment charges and Default Interest (a) accrued with respect to that mortgage loan while it was specially serviced or after the related mortgaged property became an REO Property and (b) are not otherwise allocable to pay the following items with respect to the subject mortgage loan: (i) interest on advances; or (ii) Additional Trust Fund Expenses (exclusive of special servicing fees, liquidation fees and workout fees) currently payable or previously paid with respect to the subject mortgage loan or mortgaged real property from collections on the mortgage pool and not previously reimbursed Compensation Late payment charges and Default Interest actually collected in respect of the underlying mortgage loans Time to time
Additional Servicing Compensation / Master Servicer and/or Special Servicer (9) •All assumption fees, assumption application fees, modification fees, consent fees, extension fees and similar fees actually collected on the underlying mortgage loans (other than the Outside Serviced Trust Mortgage Loans) and the Serviced Non-Trust Loan Compensation Related payments made by mortgagors with respect to the subject mortgage loans Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Trustee Fee / Trustee With respect to each distribution date, an amount generally equal to one month’s interest at the annual trustee fee rate accrued on the Stated Principal Balance outstanding immediately prior to such distribution date of each and every underlying mortgage loan. (10) Compensation General collections on the mortgage pool on deposit in the trustee’s collection account. Monthly
Additional Trustee Compensation / Trustee All interest and investment income earned on amounts on deposit in the trustee’s collection account and interest reserve account. Compensation Interest and investment income realized on funds deposited in the trustee’s collection account and interest reserve account (net of investment losses). Monthly

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Expenses        
Servicing Advances / Master Servicer, Special Servicer or Trustee To the extent of funds available, the amount of any servicing advances. Reimbursement of expenses Amounts on deposit in the custodial account that represent (a) payments made by the related mortgagor to cover the item for which such servicing advance was made or (b) Liquidation Proceeds, condemnation proceeds, insurance proceeds and, if applicable, REO revenues (in each case, if applicable, net of any liquidation fee or workout fee payable therefrom) received in respect of the particular mortgage loan or related REO Property, provided that if the master servicer, special servicer or trustee determines that a servicing advance is not recoverable out of collections on the related underlying mortgage, then such reimbursements shall be paid out of general collections on the mortgage loans and any REO Properties in the trust on deposit in the custodial account (11) Time to time
Interest on servicing advances / Master Servicer, Special Servicer or Trustee At a rate per annum equal to the prime rate as published in the ‘‘Money Rates’’ section of The Wall Street Journal, accrued on the amount of each outstanding servicing advance Payment of Interest on servicing advances First, out of Default Interest and late payment charges on the related mortgage loan and then, after or at the same time that advance is reimbursed, out of any other amounts then on deposit in the master servicer’s custodial account (12) Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
P&I Advances / Master Servicer and Trustee To the extent of funds available, the amount of any P&I advances. Reimbursement of P&I advances made with respect to the mortgage pool Late collections of interest and principal (net of related master servicing, workout and liquidation fees) received in respect of the related underlying mortgage loan or REO Property as to which such P&I advance was made, provided that if the master servicer or trustee determines that a P&I advance is not recoverable out of collections on the related underlying mortgage, then out of general collections on the mortgage loans and any REO Properties in the trust on deposit in the master servicer’s custodial account Time to time
Interest on P&I Advances / Master Servicer and Trustee At a rate per annum equal to the prime rate as published in the ‘‘Money Rates’’ section of The Wall Street Journal, accrued on the amount of each outstanding P&I advance Payment of interest on P&I advances First, out of Default Interest and late payment charges on the related mortgage loan and then, after or at the same time that advance is reimbursed, out of any other amounts then on deposit in the master servicer’s custodial account Time to time
Unpaid expenses (other than interest on servicing advances or P&I advances, special servicing fees, workout fees and liquidation fees) To the extent of funds available, the amount of any outstanding expenses. Reimbursement of Expenses Default Interest and late payment charges on deposit in the custodial account that were received with respect to the mortgage loan as to which the expense was incurred, to the extent not applied to the payment of interest on outstanding servicing or P&I advances Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Reimbursement of costs and expenses for the remediation of adverse environmental conditions at any mortgaged real property / Special Servicer To the extent of funds available, the costs and expenses in connection with the remediation of adverse environmental condition at any mortgaged real property that secures a defaulted mortgage loan in the trust (such costs and expenses will be incurred only if the Special Servicer has determined to acquire title or possession of the related mortgaged real property) Reimbursement of Expenses General collections on deposit in the master servicer’s custodial account (4) Time to time
Cost of an independent appraiser or other expert in real estate matters To the extent of funds available, the cost of such independent appraiser or other expert in real estate matters Payment of Expenses General collections on deposit in the master servicer’s custodial account (4) Time to time
Fees of an independent contractor retained to manage an REO Property To the extent of funds available, the amount of the fees of such independent contractor Payment of Expenses General collections on deposit in the master servicer’s custodial account (4) Time to time
Servicing expenses, that would, if advanced by the master servicer or special servicer, constitute nonrecoverable servicing advances To the extent of funds available, the amount of such servicing expense Payment of servicing expenses General collections on deposit in the master servicer’s custodial account (4) Time to time
Amounts payable or reimbursable to a Non-Trust Noteholder or a servicer of an Outside Serviced Trust Mortgage Loan Amounts (other than normal monthly payments) specifically payable or reimbursable to such party by the trust in its capacity as holder of the related underlying mortgage loan that is part of the relevant Loan Combination, pursuant to the terms of the related Co-Lender Agreement Payment or reimbursement or amounts payable by the trust General collections on deposit in the master servicer’s custodial account. Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Reimbursement of nonrecoverable advances and interest thereon / Master Servicer, Special Servicer or Trustee To the extent of funds available, the amount of any P&I advance or servicing advance, and interest thereon, that the advancing party has determined to be not recoverable out of collections on the related underlying mortgage loan Reimbursement of Expenses First, out of amounts on deposit in the custodial account that represent payments or collections of principal on the mortgage pool and second, out of any other payments and/or collections on the mortgage pool and third, out any other amounts on deposit in the custodial account. Time to time
Indemnification of expenses in connection with the termination and removal of the master servicer or the special servicer as a result of an Event of Default / the applicable party to the pooling and servicing agreement Any cost or expenses in connection with any actions taken by any party to the pooling and servicing agreement with respect to the termination and removal of the master servicer or special servicer following an Event of Default (if not paid by the defaulting party within 90 days after notice of such costs and expenses). Indemnification General collections on deposit in the master servicer’s custodial account. Time to time
Cost of transferring mortgage files and related documents to a successor trustee/ trustee The cost of transferring mortgage files and related documents to a successor trustee Payment of expenses Out of general collections on deposit in the master servicer’s custodial account. Time to time
Cost of opinions or advice of counsel / Party incurring such expense To the extent of funds available, the cost of such opinions of counsel or advice of counsel Payment of expenses General collections on the mortgage pool on deposit in the trustee’s collection account or the master servicer’s custodial account (4) Time to time
Payment of any federal, state and local taxes imposed on the trust, its assets and/or transactions, together with all incidental costs and expenses, that are required to be borne by the trust / Party payment such expense The amount of any federal, state and local taxes imposed on the trust, its assets and/or transactions, together with all incidental costs and expenses Payment of taxes and related expenses General collections on the mortgage pool on deposit in the trustee’s collection account Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Indemnification Expenses / Tax Administrator The amount of any professional fees or expenses related to audits or any administrative or judicial proceedings with respect to the Trust Fund that involve the IRS or state tax authorities Indemnification General collections on the mortgage pool on deposit in the trustee’s collection account Time to time
Funds necessary for the proper operation, management, leasing, maintenance and disposition of any administered REO Property / Special Servicer To the extent of funds available, the amount of the expenses for the proper operation, management, leasing, maintenance and disposition of such REO Property Payment of expenses Amounts on deposit in the account established by the special servicer for the retention of revenues and other proceeds derived from such REO Property (4) Time to time
The cost or expenses incurred in connection with determining the identity of the Controlling Class Representative or a Loan- Specific Class Representative The amount of such cost or expenses Indemnification
of expenses		 Out of the trust funds (in any event, out of amounts otherwise payable with respect to the series 2006-C7 controlling class certificates) Time to time
Indemnification Expenses / Trustee and any director, officer, employee or agent of the Trustee Any loss, liability or reasonable ‘‘out-of-pocket’’ expense arising out of, or incurred in connection with the series 2006-C7 pooling and servicing agreement, the series 2006-C7 certificates (provided that such loss, liability or expense constitutes an ‘‘unanticipated expense’’ within the meaning of Treasury regulations section 1.860G-1(b)(3)(ii)) (13) Indemnification Amounts on deposit on the master servicer’s custodial account and the trustee’s collection account (and, to the extent that a Loan Combination or any related REO Property is affected, such indemnity will be payable out of the related Loan Combination custodial account) Time to time
Indemnification Expenses / Depositor, Master Servicer or Special Servicer and any director, officer, employee or agent of Depositor, Master Servicer or Special Servicer Any loss, liability or reasonable expense (including reasonable legal fees and expenses) incurred in connection with any legal action or claim relating to the series 2006-C7 pooling and servicing agreement or the series 2006-C7 certificates (13) Indemnification Amounts on deposit on the master servicer’s custodial account (14) Time to time

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Type / Recipient   (1) Amount General Purpose Source (2) Frequency
Servicing Advances, Interest on Servicing Advances, Servicing Expenses and Indemnification Expenses / Master Servicer or Special Servicer of an Outside Serviced Trust Mortgage Loan Substantially the same as corresponding items under the series 2006-C7 pooling and servicing agreement Fees, Expenses and Indemnification Payable out of collections on the related Outside Serviced Loan Combination, but, in the case of the Triangle Town Center Loan Combination, first out of amounts otherwise payable to the trust with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan Time to time
Interest on Delinquency Advances with respect to the Triangle Town Center Senior Non-Trust Loans / Applicable Advancing Party Substantially the same as corresponding items under the series 2006-C7 pooling and servicing agreement Expenses Payable first out of amounts otherwise payable to the trust with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan, and then out of other collections on the Triangle Town Center Loan Combination Time to time

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(1)  If the trustee succeeds to the position of master servicer, it will be entitled to receive the same fees and expenses of the master servicer described in this prospectus supplement. Any change to the fees and expenses described in this prospectus supplement would require an amendment to the series 2006-C7 pooling and servicing agreement. See ‘‘Description of the Governing Documents—Amendment’’ in the accompanying base prospectus.
(2)  Unless otherwise specified, the fees and expenses shown in this table are paid (or retained by the master servicer or trustee in the case of amounts owed to either of them) prior to distributions on the series 2006-C7 certificates.
(3)  The master servicing fee rate payable with respect to each Outside Serviced Trust Mortgage Loan under the series 2006-C7 pooling and servicing agreement will equal 0.01% per annum. The master servicing fee rate payable with respect to the other underlying mortgage loans will range, on a loan-by-loan basis, from 0.02% per annum to 0.11% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses—The Principal Master Servicing Compensation.’’
(4)  In the case of a mortgage loan in a Serviced Loan Combination, first, out of amounts on deposit in the Serviced Loan Combination-specific custodial account.
(5)  The outside master servicing fee rate for each Outside Serviced Trust Mortgage Loan will equal 0.01% per annum and the outside special servicing fee rate for each Outside Serviced Trust Mortgage Loan will equal 0.35% per annum.
(6)  The special servicing fee rate for each mortgage loan will equal 0.25% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses—Principal Special Servicing Compensation—The Special Servicing Fee.’’
(7)  Circumstances as to when a liquidation fee is not payable are set forth under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses—Principal Special Servicing Compensation—Liquidation Fee’’ in this prospectus supplement.
(8)  The liquidation fee rate and the workout fee rate with respect to each Outside Serviced Trust Mortgage Loan will equal 1.0%.
(9)  Allocable between the master servicer and the special servicer as provided in the series 2006-C7 pooling and servicing agreement.
(10)  The trustee fee rate will equal 0.00065% per annum, as described in this prospectus supplement under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Trustee Compensation.’’ In the case of the KeyBank Mortgage Loans that accrue on an Actual/360 Basis, the trustee fee will be calculated on an Actual/360 Basis, and in the case of each other underlying mortgage loan, the trustee fee will be calculated on a 30/360 Basis.
(11)  If the subject underlying mortgage loan is part of a Serviced Loan Combination, such servicing advance will generally be paid out of amounts on deposit in the related Serviced Loan Combination-specific account that represent payments made by the related mortgagor to cover the item for which such servicing advance was made, and amounts on deposit in the related Loan Combination-specific account that represent Liquidation Proceeds, condemnation proceeds, insurance proceeds and, if applicable, REO revenues (in each case, if applicable, net of any liquidation fee or workout fee payable therefrom) received in respect of the subject Serviced Loan Combination or any related REO Property, provided that if the party entitled to the reimbursement of such servicing advance has made a determination that such servicing advance is nonrecoverable, then such servicing advance shall generally be paid out of amounts on deposit in the master services custodial account.
(12)  If the subject underlying mortgage loan is part of a Serviced Loan Combination, such amounts will generally be paid out of: first, to the maximum extent permitted under the related Co-Lender Agreement, any amounts on deposit in the related Serviced Loan Combination-specific account that would otherwise be distributable under the related Co-Lender Agreement to holders of the mortgage loans comprising the subject Serviced Loan Combination as Default Interest and late payment charges, with such payment to be deducted from the amounts otherwise so distributable; and, second, any remaining amounts on deposit in the related Serviced Loan Combination-specific account that would otherwise be distributable under the related Co-Lender Agreement to the holders of the mortgage loans comprising the subject Serviced Loan Combination with such payment to be deducted (if and to the extent so provided in the related Co-Lender Agreement) from such amounts otherwise so distributable; and, third, as and to the extent provided in the series 2006-C7 pooling and servicing agreement, out of general collections on the mortgage pool.

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(13)  In general, none of the above specified persons will be entitled to indemnification for (a) any liability specifically required to be borne thereby pursuant to the terms of the series 2006-C7 pooling and servicing agreement, or (b) any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of, or the negligent disregard of, such party’s obligations and duties under the series 2006-C7 pooling and servicing agreement, or as may arise from a breach of any representation or warranty of such party made in the series 2006-C7 pooling and servicing agreement, or (c) any loss, liability or expense that constitutes an advance, the reimbursement of which has otherwise been provided for under the series 2006-C7 pooling and servicing agreement, or allocable overhead.
(14)  If a Serviced Loan Combination is involved, such indemnity will be payable out of the related Loan Combination-specific custodial account and, if and to the extent not solely attributable to the Serviced Non-Trust Loan included in such Loan Combination, will also be payable out of the master servicer’s custodial account if amounts on deposit in the related Loan Combination-specific account are insufficient therefor.

Reports to Certificateholders; Available Information

Certificateholder Reports.    Based solely on information provided in monthly reports prepared by the master servicer and the special servicer and delivered to the trustee, the trustee will be required to make available, as and under the circumstances described under ‘‘—Information Available Electronically’’ below, on each distribution date, to each registered holder of an offered certificate and, upon request, to each beneficial owner of an offered certificate held in book-entry form that is identified to the reasonable satisfaction of the trustee:

•  A distribution date statement containing substantially the information contained in Annex D to this prospectus supplement.
•  A CMSA bond level file, together with a CMSA collateral summary file setting forth information with respect to the underlying mortgage loans and the corresponding mortgaged real properties, respectively.
•  A mortgage pool data update report, which is to contain substantially the categories of information regarding the underlying mortgage loans set forth on Annexes A-1 through A-4 to this prospectus supplement, with that information to be presented in tabular format substantially similar to the format utilized on those annexes. The mortgage pool data update report may be included as part of the distribution date statement.

The master servicer or the special servicer, as specified in the series 2006-C7 pooling and servicing agreement, is required to deliver to the trustee (or, in the case of the special servicer, to the master servicer for delivery, directly or as part of other reports, to the trustee) monthly, and the trustee is required to make available, as and under the circumstances described below under ‘‘—Information Available Electronically,’’ a copy of each of the following reports with respect to the underlying mortgage loans (except as provided in the fourth succeeding paragraph below with respect to the Outside Serviced Trust Mortgage Loans) and the corresponding mortgaged real properties:

•  a CMSA delinquent loan status report;
•  a CMSA historical loan modification and corrected mortgage loan report;
•  a CMSA REO status report;
•  a CMSA servicer watch list;
•  a loan payoff notification report;
•  a CMSA comparative financial status report;
•  a CMSA loan level reserve/LOC report;
•  a CMSA loan periodic update file;
•  a CMSA advance recovery report;
•  a CMSA property file; and
•  a CMSA financial file.

In addition, upon the request of any holder or, to the extent identified to the reasonable satisfaction of the trustee, beneficial owner of an offered certificate, the trustee will be required to request from the master servicer, and, upon receipt,

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make available to the requesting party, during normal business hours at the offices of the trustee, copies of the following reports required to be prepared and maintained by the master servicer and/or the special servicer:

•  with respect to any mortgaged real property or REO Property, a CMSA operating statement analysis report; and
•  with respect to any mortgaged real property or REO Property, a CMSA NOI adjustment worksheet.

The reports identified in the preceding three paragraphs as CMSA reports will be in the forms prescribed in the standard Commercial Mortgage Securities Association investor reporting package. Forms of these reports are available at the CMSA’s internet website, located at www.cmbs.org.

Recipients of the reports described above in this ‘‘—Reports to Certificateholders; Available Information’’ section will be deemed to have agreed to keep the information therein confidential in accordance with applicable securities laws. Notwithstanding the foregoing, any information made available by or duplicated in filings made pursuant to the Exchange Act is required to be and will be made available to anyone.

With respect to each of the Outside Serviced Trust Mortgage Loans, the reports required to be delivered to the holder of those mortgage loans by the applicable master servicer, pursuant to the governing servicing agreement, are substantially similar, but not identical, to those required to be delivered to the trustee by the master servicer under the series 2006-C7 pooling and servicing agreement. To the extent any such information with respect to an Outside Serviced Trust Mortgage Loan or the related mortgaged real property is received from the master servicer under the related governing servicing agreement, the series 2006-C7 master servicer is required to aggregate that information with the CMSA reports the series 2006-C7 master servicer is required to prepare with respect to the underlying mortgage loans, and the trustee is then required to make those reports available as described below under ‘‘—Information Available Electronically.’’ The obligation of the series 2006-C7 master servicer and/or the trustee to remit any reports or information identified in this ‘‘—Reports to Certificateholders; Available Information’’ section with respect to an Outside Serviced Trust Mortgage Loan is dependent upon its receipt of the corresponding information from a party responsible for servicing that mortgage loan.

Within a reasonable period of time after the end of each calendar year, upon request, the trustee is required to send to each person who at any time during the calendar year was a series 2006-C7 certificateholder of record, a report summarizing on an annual basis, if appropriate, certain items of the monthly distribution date statements relating to amounts distributed to the certificateholder and such other information as may be required to enable the certificateholder to prepare its federal income tax returns. The foregoing requirements will be deemed to have been satisfied to the extent that the information is provided from time to time pursuant to the applicable requirements of the Internal Revenue Code.

Absent manifest error of which it is aware, none of the master servicer, the special servicer or the trustee will be responsible for the accuracy or completeness of any information supplied to it by a borrower, a mortgage loan seller or any other third party that is included in any reports, statements, materials or information prepared or provided by the master servicer, the special servicer or the trustee, as applicable. Notwithstanding the foregoing, the party signing reports required under the Exchange Act on our behalf is responsible for the information contained in those reports.

Book-Entry Certificates.    If you hold your offered certificates in book-entry form through DTC, you may, at your expense, obtain direct access to the monthly reports of the trustee as if you were a certificateholder, provided that you deliver a written certification to the trustee confirming your beneficial ownership in the offered certificates. Otherwise, until definitive certificates are issued with respect to your offered certificates, the information contained in those 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 series 2006-C7 certificate registrar are required to recognize as certificateholders only those persons in whose names the series 2006-C7 certificates are registered on the books and records of the certificate registrar.

Information Available Electronically.    The trustee will make available each month, for the relevant reporting periods, to the series 2006-C7 certificateholders and beneficial owners of series 2006-C7 certificates identified to the reasonable satisfaction of the trustee, the distribution date statement, any mortgage pool data update report, any loan payoff notification report, and the mortgage loan information presented in the standard Commercial Mortgage Securities Association investor reporting package formats via the trustee’s internet website. All the foregoing reports will be accessible on a restricted basis after receipt by the trustee of a certification in the form attached to the series 2006-C7 pooling and servicing agreement from the person(s) seeking access. The trustee’s internet website will initially be located at www.etrustee.net.

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The annual reports on Form 10-K, the distribution reports on Form 10-D, the current reports on Form 8-K and amendments to those reports filed or furnished with respect to the trust pursuant to section 13(a) or 15(d) of the Exchange Act will be made available on the website of the trustee as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. See ‘‘Description of the Certificates—Incorporation of Certain Documents by Reference; Reports Filed with the SEC’’ in the accompanying base prospectus.

The trustee will provide to each person, including any beneficial owner, to whom the accompanying base prospectus is delivered in connection with any offered certificates, free of charge upon written or oral request, a copy of any and all of the information that is incorporated by reference in the accompanying base prospectus but not delivered with the accompanying base prospectus. Requests for this information should be made to the trustee at LaSalle Bank National Association, 135 South LaSalle Street, Suite 1625, Chicago, IL 60603, Attention: Kathryn Hawkinson, telephone number (312) 904-6561.

The trustee may require the acceptance of a disclaimer and an agreement of confidentiality in connection with providing access to its internet website. The trustee will not be liable for the dissemination of information made in accordance with the series 2006-C7 pooling and servicing agreement.

Upon notice from the underwriters that the non-offered classes of series 2006-C7 certificates have been sold by them, the trustee will be required to make available electronically, on each distribution date, to the Trepp Group, Intex Solutions, Inc., Charter Research Corporation and/or any other similar third party information provider, a copy of the reports made available to the series 2006-C7 certificateholders.

None of the trustee, the master servicer or the special servicer will make any representations or warranties as to the accuracy or completeness of, and may disclaim responsibility for, any information made available by the trustee, the master servicer or the special servicer, as the case may be, for which it is not the original source. Notwithstanding the foregoing, the party signing reports required under the Exchange Act on our behalf is responsible for the information contained in those reports.

Other Information.    The series 2006-C7 pooling and servicing agreement will obligate the trustee to make available at its offices, during normal business hours, upon reasonable advance written notice, 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 certificate, originals or copies of, among other things, the following items:

•  the final prospectus supplement, the accompanying base prospectus and any other disclosure documents relating to the non-offered classes of the series 2006-C7 certificates, in the form most recently provided by us or on our behalf to the trustee;
•  the series 2006-C7 pooling and servicing agreement, each sub-servicing agreement delivered to the trustee since the Issue Date, and any amendments to those agreements;
•  all monthly reports of the trustee delivered, or otherwise electronically made available, to series 2006-C7 certificateholders since the Issue Date;
•  all statements of compliance delivered to the trustee annually by the master servicer and/or the special servicer since the Issue Date, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Evidence as to Compliance’’ in this prospectus supplement;
•  all assessment reports and attestation reports delivered to the trustee annually with respect to the master servicer and/or the special servicer since the Issue Date, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Evidence as to Compliance’’ in this prospectus supplement;
•  the most recent appraisal, if any, with respect to each mortgaged real property for an underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) obtained by the master servicer or the special servicer and delivered to the trustee;
•  the mortgage files for the underlying mortgage loans, including all documents, such as modifications, waivers and amendments of those underlying mortgage loans, that are to be added to the mortgage files from time to time, to the extent held by the trustee;
•  upon request, the most recent inspection report with respect to each mortgaged real property with respect to an underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan) prepared by or on behalf of the master servicer or the special servicer and delivered to the trustee as described under ‘‘Description of the Series 2006-C7 Pooling and Servicing Agreement—Inspections; Collection of Operating Information’’ in this prospectus supplement;

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•  upon request, except in the case of an Outside Serviced Trust Mortgage Loan, the most recent quarterly and annual operating statement and rent roll for each mortgaged real property for an underlying 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 ‘‘Description of the Series 2006-C7 Pooling and Servicing Agreement—Inspections; Collection of Operating Information’’ in this prospectus supplement; and
•  with respect to each Outside Serviced Trust Mortgage Loan, the governing servicing agreement and any reports and other information delivered under that agreement to the master servicer on behalf of the trust as holder of the Outside Serviced Trust Mortgage Loan.

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 (or the master servicer, if applicable) may require:

•  in the case of a registered holder of an offered certificate or a beneficial owner of an offered certificate held in book-entry form, a written confirmation executed by the requesting person or entity, in the form attached to the series 2006-C7 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, together with a related indemnity; 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 series 2006-C7 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, together with a related indemnity.

Voting Rights

The voting rights for the series 2006-C7 certificates will be allocated among the respective classes of those certificates as follows:

•  99% of the voting rights will be allocated among the holders of the various classes of series 2006-C7 certificates that have principal balances, pro rata in accordance with those principal balances;
•  1% of the voting rights will be allocated among the holders of the class X-CL, X-CP and X-W certificates, pro rata in accordance with their respective notional amounts; and
•  0% of the voting rights will be allocated among the holders of the class R-I, R-II, R-III and V certificates.

Voting rights allocated to a class of series 2006-C7 certificateholders will be allocated among those certificateholders in proportion to their respective percentage interests in that class.

Termination

The obligations created by the series 2006-C7 pooling and servicing agreement will terminate following the earliest of—

1.  the final payment or advance on, other liquidation of, the last mortgage loan or related REO Property remaining in the trust, and
2.  the purchase of all of the mortgage loans and REO Properties remaining in the trust by any single certificateholder or group of certificateholders of the series 2006-C7 controlling class, the special servicer, the master servicer, us or Lehman Brothers Inc., in that order of preference.

Written notice of termination of the series 2006-C7 pooling and servicing agreement will be given to each series 2006-C7 certificateholder. The final payment with respect to each series 2006-C7 certificate will be made only upon surrender and cancellation of that certificate at the office of the series 2006-C7 certificate registrar or at any other location specified in the notice of termination.

Any purchase by any single holder or group of holders of the controlling class, the special servicer, the master servicer, us or Lehman Brothers Inc. of all the mortgage loans and REO Properties remaining in the trust is required to be made at a price generally equal to:

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•  the sum of—
1.  the total principal balance of all the mortgage loans then included in the trust, other than any mortgage loans as to which the mortgaged real properties have become REO Properties, together with (a) interest, other than Default Interest and Post-ARD Additional Interest, on those mortgage loans, (b) unreimbursed servicing advances for those mortgage loans and (c) unpaid interest on advances made with respect to those mortgage loans, and
2.  the appraised value of all REO Properties then included in the trust,

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 series 2006-C7 pooling and servicing agreement.

The purchase will result in early retirement of the outstanding series 2006-C7 certificates. However, the rights of any single holder or group of holders of the series 2006-C7 controlling class, the special servicer, the master servicer, us or Lehman Brothers Inc. 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 2006-C7 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 series 2006-C7 pooling and servicing agreement for all reasonable out-of-pocket costs and expenses incurred by the parties in connection with the purchase.

In addition, following the date on which the total principal balances of the class A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F and G certificates are reduced to zero, the trust fund may also be terminated, with the consent of 100% of the remaining 2006-C7 certificateholders and the master servicer and subject to such additional conditions as may be set forth in the series 2006-C7 pooling and servicing agreement, in connection with an exchange of all the remaining series 2006-C7 certificates for all the mortgage loans and REO Properties remaining in the trust fund at the time of exchange.

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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 payments on the certificate.

The rate, timing and amount of payments on any offered certificate will in turn depend on, among other things,

•  the pass-through rate for the certificate, which will be fixed or variable, as described in this prospectus supplement,
•  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 or notional amount, as applicable, of the certificate,
•  the rate, timing and severity of Realized Losses and Additional Trust Fund Expenses and the extent to which those losses and expenses result in the reduction of the principal balance or notional amount, as applicable, of, or the total payments on, 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 payments on the certificate.

See ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ and ‘‘Description of the Mortgage Pool’’ in this prospectus supplement and ‘‘—Rate and Timing of Principal Payments’’ below.

Pass-Through Rates.    If the pass-through rate applicable to any class of offered certificates is equal to, based upon or limited by the Weighted Average Pool Pass-Through Rate from time to time, then the yield on those offered certificates could be sensitive to changes in the relative composition of the mortgage pool as a result of scheduled amortization, voluntary prepayments and liquidations of the underlying mortgage loans following default.

See ‘‘Description of the Offered Certificates—Payments—Calculation of Pass-Through Rates’’ and ‘‘Description of the Mortgage Pool’’ in this prospectus supplement and ‘‘—Rate and Timing of Principal Payments’’ below.

Rate and Timing of Principal Payments.    The yield to maturity of the class X-CP certificates will be extremely sensitive to, and the yield maturity of any other offered certificates purchased at a discount or a premium will be affected by, the rate and timing of principal payments made in a reduction of the principal balances of those certificates. In turn, the rate and timing of principal payments that are applied or otherwise result in reduction of the principal balance or notional amount 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.

Prepayments and other early liquidations of the underlying mortgage loans will result in payments on the series 2006-C7 certificates of amounts that would otherwise be paid over the remaining terms of the mortgage loans. This will tend to accelerate the rate at which the total notional amount of the class X-CP certificates is reduced and further tend to shorten the weighted average lives of the offered certificates with principal balances. Defaults on the underlying mortgage loans, particularly at or near their maturity dates, may result in significant delays in payments of principal on the underlying mortgage loans and, accordingly, on the series 2006-C7 certificates, while work-outs are negotiated or foreclosures are completed. These delays will tend to lengthen the weighted average lives of the offered certificates with principal balances. 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 under an ARD Loan 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 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

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on the underlying mortgage loans are in turn paid or otherwise result in a reduction of the principal balance or notional amount 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 class X-CP certificates, or if you otherwise 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.

The yield to investors on the class X-CP certificates will be highly sensitive to the rate and timing of principal payments, including prepayments, on the underlying mortgage loans. Depending on the timing thereof, a payment of principal on the underlying mortgage loans that is, in turn, applied in reduction of the total principal balance of the class A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G and H certificates may result in a reduction in the total notional amount of the class X-CP certificates. If you are considering the purchase of class X-CP certificates, you should consider the risk that an extremely rapid rate of payments and other collections of principal on or with respect to the underlying mortgage loans could result in your failure to fully recover your initial investment.

In the event that prepayments and other early liquidations occur with respect to underlying mortgage loans that have relatively high net mortgage interest rates, the Weighted Average Pool Pass-Through Rate would decline, which could, in turn, adversely affect the yield on any offered certificate with a variable or capped pass-through rate. In addition, the pass-through rate for, and the yield on, the class X-CP certificates will vary with changes in the relative sizes of the respective Class X-CP Components, with each Class X-CP Component consisting of 30%, or a lesser designated portion, of the total principal balance of a class of series 2006-C7 principal balance certificates.

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.

Even if they are collected and payable on your offered certificates, prepayment premiums and yield maintenance charges may not be sufficient to offset fully any loss in yield on your offered certificates attributable to the related prepayments of the underlying mortgage loans.

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 payments on your offered certificates, the yield to maturity of your offered certificates and, in the case of offered certificates with principal balances, the rate of principal payments on your offered certificates and the weighted average life of your offered certificates. Delinquencies on the underlying mortgage loans, unless covered by monthly debt service advances, may result in shortfalls in payments of interest and/or principal on your offered certificates for the current month.

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 default rate and amount of losses actually experienced, and
•  the additional losses result in a reduction of the total payments on or the principal balance or notional amount, as applicable, 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 payments on or the principal balance or notional amount, as applicable, 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.

Depending on the timing thereof, any reduction of the total principal balance of the class A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F, G and H certificates caused by a Realized Loss with respect to the underlying mortgage loans or an Additional Trust Fund Expense may result in a reduction in the total notional amount of the class X-CP certificates.

Even if losses on the underlying mortgage loans do not result in a reduction of the total payments on or the principal balance or notional amount, as applicable, of your offered certificates, the losses may still affect the timing of payments on, and the weighted average life and/or yield to maturity of, your offered certificates.

In addition, if the master servicer, the special 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

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that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed out of payments and other collections of principal on the underlying mortgage loans otherwise distributable on the series 2006-C7 principal balance certificates, prior to being deemed reimbursed out of payments and other collections of interest on the underlying mortgage loans otherwise distributable on the series 2006-C7 certificates. As a result, the Total Principal Distribution Amount for the corresponding distribution date would be reduced, to not less than zero, by the amount of any such reimbursement. Accordingly, any such reimbursement would have the effect of reducing current payments of principal to any holders of the offered certificates otherwise entitled thereto.

The Effect of Loan Groups.    The mortgage pool has been divided into two loan groups for purposes of calculating distributions on certain classes of the offered certificates. As a result, the holders of the class A-1, A-2, A-AB and A-3 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 1 and, in the absence of significant losses on the mortgage pool, 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 2. In addition, the holders of the class A-1A 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 2 and, prior to the retirement of the class A-1, A-2, A-AB and A-3 certificates, in the absence of significant losses on the mortgage pool, 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 1. 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 mortgage loans in the trust:

•  prevailing interest rates;
•  the terms of the mortgage loans, including—
1.  provisions that require the payment of prepayment premiums and yield maintenance charges,
2.  provisions that impose prepayment lock-out periods, and
3.  amortization terms that require balloon payments;
•  the demographics and relative economic vitality of the areas in which the related mortgaged real properties are located;
•  the general supply and demand for commercial and multifamily rental space of the type available at the related 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;
•  possible changes in tax laws; and
•  other opportunities for investment.

See ‘‘Risk Factors,’’ ‘‘Description of the Mortgage Pool,’’ ‘‘The Series 2006-C7 Pooling and Servicing Agreement’’ and ‘‘Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination’’ in this prospectus supplement and ‘‘Description of the Governing Documents’’ and ‘‘Yield and Maturity Considerations—Yield and Prepayment Considerations’’ in the accompanying base prospectus.

The rate of prepayment on the mortgage loans in the trust is likely to be affected by prevailing market interest rates for real estate 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 will be prepaid on or before its anticipated repayment date or on any other date prior to maturity.

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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 prior to the exhaustion of tax depreciation benefits.

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.

Unpaid Interest.    If the portion of the Available P&I Funds payable with respect to interest on any class of offered certificates on any distribution date is less than the total amount of interest then payable for that class, the shortfall will be payable to the holders of those certificates on subsequent distribution dates, subject to the Available P&I Funds on those subsequent distribution dates and the priority of payments described under ‘‘Description of the Offered Certificates—Payments—Priority of Payments’’ in this prospectus supplement. That shortfall will not bear interest, however, and will therefore negatively affect the yield to maturity of that class of offered certificates for so long as it is outstanding.

Delay in Payments.    Because monthly payments 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.

Yield Sensitivity

The tables on Annex C-1 hereto show the pre-tax corporate bond equivalent yield to maturity and modified duration with respect to each class of offered certificates, as well as the weighted average life and the first and final distribution dates on which principal is to be paid with respect to each class of offered certificates with principal balances. We prepared those tables using the Modeling Assumptions. Where applicable, they also show the assumed purchase prices, which prices do not include accrued interest. Assumed purchase prices are expressed in 32nds as a percentage of the initial total principal balance or notional amount, as applicable, of each class of offered certificates. For example, 99-24 means 99 24/32%.

We calculated the yields set forth in the tables on Annex C-1 by—

•  determining the monthly discount rates that, when applied to the assumed stream of cash flows to be paid on each class of offered certificates, would cause the discounted present value of that assumed stream of cash flows to equal the assumed purchase prices, plus accrued interest from and including the first day of the initial interest accrual period to but excluding the assumed settlement date specified as part of the Modeling Assumptions, and
•  converting those monthly rates to semi-annual corporate bond equivalent rates.

That calculation does not take into account variations that may occur in the interest rates at which investors may be able to reinvest funds received by them as payments on the offered certificates and, consequently, does not purport to reflect the return on any investment in the offered certificates when those reinvestment rates are considered.

For purposes of the tables on Annex C-1, modified duration has been calculated using the modified Macaulay Duration as specified in the ‘‘PSA Standard Formulas.’’ The Macaulay Duration is calculated as the present value weighted average time to receive future payments of principal and interest (or, in the case of the class X-CP certificates, just payments of interest), and the PSA Standard Formula modified duration is calculated by dividing the Macaulay Duration by the appropriate semi-annual compounding factor. The duration of a security may be calculated according to various methodologies. Accordingly, no representation is made by us or any other person that the modified duration approach used

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in this prospectus supplement is appropriate. Duration, like yield, will be affected by the prepayment rate of the underlying mortgage loans and extensions with respect to balloon payments that actually occur during the life of an offered certificate and by the actual performance of the underlying mortgage loans, all of which may differ, and may differ significantly, from the assumptions used in preparing the tables on Annex C-1.

Prepayments on mortgage loans may be measured by a prepayment standard or model. The model used in this prospectus supplement is the Constant Prepayment Rate or CPR model. The CPR model represents an assumed constant annual rate of prepayment each month, expressed as a per annum percentage of the then outstanding principal balance of the subject mortgage loan(s). The CPR model does not purport to be either an historical description of the prepayment experience of any pool of loans or a prediction of the anticipated rate of prepayment of any pool of loans. We do not make any representations about the appropriateness of the CPR model.

The characteristics of the mortgage loans in the trust will differ in some respects from those assumed in preparing the tables on Annex C-1. Those tables are presented for illustrative purposes only. Neither the mortgage pool nor any particular underlying mortgage loan will prepay at any constant rate, and it is unlikely that the underlying mortgage loans will prepay in a manner consistent with any designated scenario for the tables on Annex C-1. In addition, there can be no assurance that—

•  the underlying mortgage loans (or any particular group of underlying mortgage loans) will prepay at any particular rate,
•  the underlying mortgage loans (or any particular group of underlying mortgage loans) will not prepay, involuntarily or otherwise, during lock-out/defeasance periods, yield maintenance periods and/or declining premium periods,
•  the ARD Loans in the trust will be paid in full on their respective anticipated repayment dates,
•  the actual pre-tax yields on, or any other payment characteristics of, any class of offered certificates will correspond to any of the information shown in the tables on Annex C-1, or
•  the total purchase prices of the offered certificates will be as assumed.

You must make your own decision as to the appropriate assumptions, including prepayment assumptions, to be used in deciding whether to purchase the offered certificates.

Weighted Average Lives

The weighted average life of any offered certificate with a principal balance refers to the average amount of time that will elapse from the Issue Date until each dollar to be applied in reduction of the principal balance of that certificate is distributed to the investor. For purposes of this prospectus supplement, the weighted average life of any offered certificate with a principal balance is determined as follows:

•  multiply the amount of each principal payment on the certificate by the number of years from the assumed settlement date to the related distribution date;
•  sum the results; and
•  divide the sum by the total amount of the reductions in the principal balance of the certificate.

Accordingly, the weighted average life of any offered certificate with a principal balance will be influenced by, among other things, the rate at which principal of the underlying 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. The weighted average life of any offered certificate may also be affected to the extent that additional payments of principal are in turn applied in reduction of the principal balance of that certificate occur as a result of the purchase of a mortgage loan from the trust or the optional termination of the trust. The purchase of a mortgage loan from the trust will have the same effect on payments to the offered certificateholders as if the subject mortgage loan had prepaid in full, except that no prepayment fee is collectable on the subject mortgage loans.

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-AB, A-3 and/or A-1A certificates (allocated among those classes as described under ‘‘Description of the Offered Certificates—Payments—Payments of Principal’’ and ‘‘—Payments—Priority of Payments’’ in this prospectus supplement), 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

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based upon their relative seniority, in each case until the related principal balance is reduced to zero. Because of the order in which the Total Principal Distribution Amount is applied, the weighted average lives of some classes of offered certificates with principal balances will be shorter, and the weighted average lives of the other classes of offered certificates with principal balances will be longer, than would otherwise be the case if the principal payment amount for each distribution date was being paid on a pro rata basis among the respective classes of series 2006-C7 certificates with principal balances.

The tables set forth in Annex C-2 show with respect to each class of offered certificates (exclusive of the class X-CP 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 underlying mortgage loans will differ from the assumptions used in calculating the tables on Annex C-2. 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 Annex C-2 and the actual characteristics and performance of the underlying 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 respective classes of the offered certificates. It is highly unlikely that the underlying mortgage loans will prepay in accordance with the Maturity Assumptions at any of the specified CPRs until maturity or that all the underlying mortgage loans will so prepay at the same rate. In addition, variations in the actual prepayment experience and the balance of the underlying mortgage loans that prepay may increase or decrease the percentages of initial principal balances and weighted average lives shown in the tables. Variations may occur even if the average prepayment experience of the underlying mortgage loans were to conform to the assumptions and be equal to any of the specified CPRs. 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 will prepay in accordance with the assumptions set forth in this prospectus supplement at any of the CPRs shown or at any other particular prepayment rate,
•  all the mortgage loans in the trust will prepay in accordance with the assumptions set forth in this prospectus supplement at the same rate, or
•  mortgage loans in the trust that are in a lock-out/defeasance period, a yield maintenance period or declining premium period will not prepay as a result of involuntary liquidations upon default or otherwise.

USE OF PROCEEDS

Substantially all of the proceeds from the sale of the offered certificates will be used by us to—

•  purchase the mortgage loans that we will include in the trust, and
•  pay expenses incurred in connection with the issuance of the series 2006-C7 certificates.

FEDERAL INCOME TAX CONSEQUENCES

General

Upon the issuance of the offered certificates, Sidley Austin LLP, our counsel, will deliver its opinion generally to the effect that, assuming compliance with the series 2006-C7 pooling and servicing agreement and the governing servicing agreement for each Outside Serviced Trust Mortgage Loan, and subject to any other assumptions set forth in the opinion, each of REMIC I, REMIC II and REMIC III will qualify as a REMIC under the Internal Revenue Code.

The assets of REMIC I will generally include—

•  the underlying mortgage loans,
•  any REO Properties acquired on behalf of the series 2006-C7 certificateholders,
•  the master servicer’s custodial account,

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•  the special servicer’s REO account, and
•  the trustee’s collection account and interest reserve account.

However, REMIC I will exclude any collections of Post-ARD Additional Interest on the ARD Loans held in that REMIC.

For federal income tax purposes,

•  the separate non-certificated regular interests in REMIC I will be the regular interests in REMIC I and will be the assets of REMIC II,
•  the class R-I certificates will evidence the sole class of residual interests in REMIC I,
•  the separate non-certificated regular interests in REMIC II will be the regular interests in REMIC II and will be the assets of REMIC III,
•  the class R-II certificates will evidence the sole class of residual interests in REMIC II,
•  the class A-1, A-2, A-AB, A-3, A-1A, X-CL, X-CP, X-W, A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates will evidence the regular interests in, and will generally be treated as debt obligations of, REMIC III, and
•  the class R-III certificates will evidence the sole class of residual interests in REMIC III.

For federal income tax purposes, each of the X-CL, X-CP and X-W classes will evidence multiple regular interests in REMIC III.

Discount and Premium; Prepayment Consideration

For federal income tax reporting purposes, the class X-CP certificates will, and the other classes of the offered certificates will not, be issued with more than a de minimis amount of original issue discount. If you own an offered certificate issued with original issue discount, you may have to report original issue discount income and be subject to a tax on this income before you receive a corresponding cash payment.

The IRS has issued regulations under sections 1271 to 1275 of the Internal Revenue Code generally addressing the treatment of debt instruments issued with original issue discount. Section 1272(a)(6) of the Internal Revenue Code provides for 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 the regulations issued under sections 1271 to 1275 of the Internal Revenue Code and section 1272(a)(6) of the Internal Revenue Code do not adequately address all 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 offered certificates.

If the method for computing original issue discount described in the accompanying base prospectus results in a negative amount for any period with respect to any holder of offered certificates, the amount of original issue discount allocable to such period would be zero. This is a possibility of particular relevance to a holder of a class X-CP certificate. The holder would be permitted to offset the negative amount only against future original issue discount, if any, attributable to his or her offered certificate. Although the matter is not free from doubt, a holder of a class X-CP certificate may be permitted to deduct a loss to the extent that his or her respective remaining basis in the certificate exceeds the maximum amount of future payments to which the holder is entitled, assuming no further prepayments of the underlying mortgage loans. Any loss might be treated as a capital loss.

Some of the offered certificates may be treated for federal income tax purposes as having been issued at a premium. Whether any holder of an offered certificate will be treated as holding a certificate with amortizable bond premium will depend on the certificateholder’s purchase price and the payments remaining to be made on the certificate at the time of its acquisition by the certificateholder. If you acquire an interest in any 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 base prospectus.

When determining the rate of accrual of market discount and premium, if any, with respect to the series 2006-C7 certificates for federal income tax purposes, the prepayment assumption used will be that following any date of determination:

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•  the mortgage loans with anticipated repayment dates will be paid in full on those dates,
•  no mortgage loan in the trust will be prepaid prior to maturity, and
•  there will be no extension of maturity for any mortgage loan in the trust.

Prepayment premiums and yield maintenance charges actually collected on the underlying mortgage loans will be paid on certain classes of the offered certificates as and to the extent described under ‘‘Description of the Offered Certificates— Payments—Payments of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement. It is not entirely clear under the Internal Revenue Code when the amount of a prepayment premium or yield maintenance charge should be taxed to the holder of a class of offered certificates entitled to that amount. For federal income tax reporting purposes, the tax administrator will report prepayment premiums or yield maintenance charges as income to the holders of a class of offered certificates entitled thereto only after the master servicer’s actual receipt of those amounts. The IRS may nevertheless seek to require that an assumed amount of prepayment premiums and yield maintenance charges be included in payments projected to be made on the applicable offered certificates and that the taxable income be reported based on the projected constant yield to maturity of those offered certificates. Therefore, the projected prepayment premiums and yield maintenance charges would be included prior to their actual receipt by holders of the applicable offered certificates. If the projected prepayment premiums and yield maintenance charges were 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 prepayment premiums and yield maintenance charges had been projected to be received. Moreover, it appears that prepayment premiums and yield maintenance charges are to be treated as ordinary income rather than capital gain. However, the correct characterization of the income is not entirely clear. We recommend you consult your own tax advisors concerning the treatment of prepayment premiums and yield maintenance charges.

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 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 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, in general, it appears that 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.

To the extent an offered 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. 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 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 mortgage loan to remain a qualified mortgage, the Treasury regulations require that—

(1)  the borrower pledges substitute collateral that consist solely of Government Securities;
(2)  the mortgage loan documents allow that substitution;

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(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 years of the startup day of the REMIC.

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(c)(3)(B) of the Internal Revenue Code, respectively.

See ‘‘Description of the Mortgage Pool’’ in this prospectus supplement and ‘‘Federal Income Tax Consequences—REMICs—Characterization of Investments in REMIC Certificates’’ in the accompanying base prospectus.

Constructive Sales of Class X-CP Certificates

Section 1259 of the Internal Revenue Code requires the recognition of gain upon the constructive sale of an appreciated financial position. A constructive sale of a financial position may occur if a taxpayer enters into a transaction 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. Accordingly, only class X-CP certificates, which do not have principal balances, could be subject to this provision if a holder of those offered certificates engages in a constructive sale transaction.

Prohibited Transactions Tax and Other Taxes

In the case of REO Properties directly operated by the special servicer, a tax may be imposed on any of the REMICs should the REO Properties consist primarily of hotels and income from the REO Property would be apportioned and classified as ‘‘service’’ or ‘‘non-service’’ income. The ‘‘service’’ portion of the income could be treated as net income from foreclosure property or net income from a prohibited transaction subject to federal tax either at the highest marginal corporate tax rate or at the 100% rate, respectively. Any tax imposed on the trust’s income from an REO Property would reduce the amount available for payment to the series 2006-C7 certificateholders.

See ‘‘The Series 2006-C7 Pooling and Servicing Agreement—REO Properties’’ in this prospectus supplement and ‘‘Federal Income Tax Consequences—REMICs—Prohibited Transactions Tax and Other Taxes’’ in the accompanying base prospectus.

For further information regarding the federal income tax consequences of investing in the offered certificates, see ‘‘Federal Income Tax Consequences—REMICs’’ in the accompanying base prospectus.

ERISA CONSIDERATIONS

If you are—

•  a fiduciary of a Plan, or
•  any other person investing ‘‘plan assets’’ of any Plan,

you are encouraged to 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 base prospectus.

If a Plan acquires a series 2006-C7 certificate, the underlying 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 base prospectus. However, we cannot predict in advance, nor can there be any continuing

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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, but this exception will be tested immediately after each acquisition of a series 2006-C7 certificate, whether upon initial issuance or in the secondary market. Because there are no relevant restrictions on the purchase and transfer of the series 2006-C7 certificates by Plans, it cannot be assured that benefit plan investors will own less than 25% of each class of the series 2006-C7 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’s underlying assets. However, if the trust or any of the Exemption-Favored Parties 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 U.S. Department of Labor issued an individual prohibited transaction exemption to a predecessor of Lehman Brothers Inc., which exemption is identified as Prohibited Transaction Exemption 91-14, as amended by Prohibited Transaction Exemptions 2000-58 and 2002-41. Subject to the satisfaction of conditions set forth in the Underwriter Exemption, it generally exempts from the application of the prohibited transaction provisions of sections 406(a) and (b) and 407(a) of ERISA, and the excise taxes imposed on these prohibited transactions under sections 4975(a) and (b) of 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 which must be satisfied for a transaction involving the purchase, sale and holding of an offered certificate to be eligible for exemptive relief under the 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, the certificate must be rated in one of the four highest generic rating categories by S&P, Fitch or Moody’s;
•  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 mortgage loans to the trust 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 series 2006-C7 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 each class of offered certificates receive an investment grade rating from each of S&P and Fitch. In addition, the initial trustee is not an affiliate of any other member of the Restricted Group. Accordingly, as of the Issue Date, 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 the purchase of an offered certificate, whether in the initial issuance of the certificate or in the secondary market, must make its own determination that the first and fourth general conditions set

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forth above will be satisfied with respect to the 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 meet the following requirements:

•  the trust assets 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 S&P, Fitch or Moody’s 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.

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, it may 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 an offered certificate 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, any party responsible for servicing an Outside Serviced Trust Mortgage Loan, provider of credit support, Exemption-Favored Party or mortgagor is, a Party in Interest with respect to the investing Plan,
•  the direct or indirect acquisition or disposition in the secondary market of an offered certificate by a Plan, and
•  the continued holding of an offered certificate by a Plan.

However, no exemption is provided from the restrictions of sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of an offered certificate on behalf of a Plan sponsored by any member of the Restricted Group, if such acquisition or holding is 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 the Underwriter Exemption, are satisfied, it 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 a borrower, or an affiliate of a borrower, with respect to 5.0% or less of the fair market value of the underlying mortgage loans;
•  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 the Underwriter Exemption are satisfied, it 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 trust assets.

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 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, 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.

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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 the Underwriter Exemption, would be satisfied at the time of the purchase.

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 which 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.

Any fiduciary of a Plan considering whether to purchase an offered certificate on behalf of that Plan is encouraged to 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.

LEGAL INVESTMENT

None of the offered certificates will be mortgage related securities for purposes of SMMEA. Furthermore, neither we nor any of the underwriters makes any representation as to the proper characterization of the offered certificates for legal investment, financial institution regulatory or other purposes, or as to the ability of particular investors to purchase the offered certificates under applicable legal investment or other restrictions. All investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities are encouraged to 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.

See ‘‘Legal Investment’’ in the accompanying base prospectus.

METHOD OF DISTRIBUTION

Subject to the terms and conditions of an underwriting agreement between us and the underwriters, the underwriters have agreed, severally and not jointly, to purchase from us, and we have agreed to sell to them, their respective allotments, in each case if any, of the offered certificates as set forth on the table below. Not every underwriter will have an obligation to acquire offered certificates. Proceeds to us from the sale of the offered certificates, before deducting expenses payable by us, will be approximately $2,890,297,000, plus accrued interest on all the offered certificates from November 11, 2006. It is expected that delivery of the offered certificates will be made to the underwriters in book-entry form through the same day funds settlement system of DTC on or about December 5, 2006, against payment for them in immediately available funds.


Underwriter Class A-1 Class A-2 Class A-AB Class A-3 Class A-1A
Lehman Brothers Inc. $ 40,000,000
$ 624,000,000
$ 54,000,000
$ 968,137,000
$ 427,623,000
UBS Global Asset Management (US) Inc. 0
0
0
N/A
0
KeyBanc Capital Markets, a division of McDonald Investments Inc. 0
0
0
0
0
Citigroup Global Markets Inc. 0
0
0
0
0
Total $ 40,000,000
$ 624,000,000
$ 54,000,000
$ 968,137,000
$ 427,623,000

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Underwriter Class A-M Class A-J Class B Class C Class D
Lehman Brothers Inc. $ 301,966,000
$ 294,417,000
$ 22,647,000
$ 30,197,000
$ 30,197,000
UBS Global Asset Management (US) Inc. 0
0
0
0
0
KeyBanc Capital Markets, a division of McDonald Investments Inc. 0
0
0
0
0
Citigroup Global Markets Inc. 0
0
0
0
0
Total $ 301,966,000
$ 294,417,000
$ 22,647,000
$ 30,197,000
$ 30,197,000

Underwriter Class E Class F Class X-CP
Lehman Brothers Inc. $ 26,422,000
$ 26,422,000
$ 856,119,600
UBS Global Asset Management (US) Inc. 0
0
0
KeyBanc Capital Markets, a division of McDonald Investments Inc. 0
0
0
Citigroup Global Markets Inc. 0
0
0
Total $ 26,422,000
$ 26,422,000
$ 856,119,600

The underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the offered certificates is subject to, among other things:

•  the receipt of various legal opinions; and
•  the satisfaction of various conditions, including that—
1.  no stop order suspending the effectiveness of our registration statement is in effect, and
2.  no proceedings for the purpose of obtaining a stop order are pending before or threatened by the SEC.

The underwriters currently intend to sell the offered certificates from time to time in one or more negotiated transactions or otherwise at varying prices to be determined at the time of sale. The underwriters may accomplish these transactions by selling the offered certificates to or through dealers, and the dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the underwriters. The underwriters may be deemed to have received compensation from us, in connection with the sale of the offered certificates, in the form of underwriting compensation. The underwriters and any dealers that participate with the underwriters in the distribution of the offered certificates may be deemed to be statutory underwriters and any profit on the resale of the offered certificates positioned by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended.

Each underwriter has represented to and agreed with us that:

(a)  it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’)) received by it in connection with the issue or sale of any offered certificates in circumstances in which section 21(1) of the FSMA does not apply to us; and
(b)  it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the offered certificates in, from or otherwise involving the United Kingdom.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’), each underwriter has represented to and agreed with us that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the ‘‘Relevant Implementation Date’’) it has not made and will not make an offer of series 2006-C7 certificates to the public in that Relevant Member State prior to the publication of a prospectus in relation to the series 2006-C7 certificates which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of series 2006-C7 certificates to the public in that Relevant Member State at any time:

(a)  to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

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(b)  to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or
(c)  in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ‘‘offer of series 2006-C7 certificates to the public’’ in relation to any series 2006-C7 certificates in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the series 2006-C7 certificates to be offered so as to enable an investor to decide to purchase or subscribe the series 2006-C7 certificates, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

The underwriting agreement provides that we must indemnify the underwriters, and that under limited circumstances the underwriters must indemnify us, against various civil liabilities under the Securities Act of 1933, as amended, relating to the disclosure in various free writing prospectuses relating to the offered certificates, this prospectus supplement, the accompanying base prospectus or our registration statement.

We have also been advised by the underwriters that they presently intend to make a market in the offered certificates. The underwriters have no obligation to do so, however, and any market making may be discontinued at any time. There can be no assurance that an active public market for the offered certificates will develop. See ‘‘Risk Factors—Lack of Liquidity Will Impair Your Ability to Sell Your Offered Certificates and May Have an Adverse Effect on the Market Value of Your Offered Certificates’’ in the accompanying base prospectus.

With respect to this offering—

•  Lehman Brothers Inc., one of our affiliates, is acting as co-lead manager and sole bookrunner,
•  UBS Global Asset Management (US) Inc. is acting as co-lead manager,
•  KeyBanc Capital Markets, a division of McDonald Investments Inc., is acting as co-manager; and
•  Citigroup Global Markets Inc. is acting as co-manager;

provided that UBS Global Asset Management (US) Inc., will not act as an underwriter with respect to the Class A-3 certificates.

LEGAL MATTERS

Particular legal matters relating to the offered certificates will be passed upon for us by Sidley Austin LLP, New York, New York, for all of the underwriters by Sidley Austin LLP, New York, New York and for UBS Global Asset Management (US) Inc. and KeyBanc Capital Markets by Cadwalader, Wickersham & Taft LLP, New York, New York.

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RATINGS

It is a condition to their issuance that the respective classes of offered certificates be rated as follows:


Class S&P Fitch
X-CP AAA AAA
A-1 AAA AAA
A-2 AAA AAA
A-AB AAA AAA
A-3 AAA AAA
A-1A AAA AAA
A-M AAA AAA
A-J AAA AAA
B AA+ AA+
C AA AA
D AA− AA−
E A+ A+
F A A

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, except in the case of the class X-CP certificates, the ultimate receipt by the holders of all payments of principal to which those holders are entitled on or before the related rated final distribution date. The ratings 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 payments of interest and 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,
•  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,
•  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,
•  whether and to what extent prepayment premiums, yield maintenance charges, Default Interest or Post-ARD Additional Interest will be received, and
•  the yield to maturity that investors may experience.

Also, a security rating does not represent any assessment of the possibility that the holders of the class X-CP certificates might not fully recover their investment in the event of rapid prepayments and/or other early liquidations of the underlying mortgage loans.

In general, ratings address credit risk and not prepayment risk. As described in this prospectus supplement, the amounts payable with respect to the class X-CP certificates consist primarily of interest. Even if the entire mortgage pool were to prepay in the initial month, with the result that the holders of the class X-CP certificates receive only a single month’s interest payment and, accordingly, suffer a nearly complete loss of their investment, all amounts due to those certificateholders will nevertheless have been paid. This result would be consistent with the ratings received on the class X-CP certificates. The ratings of the class X-CP certificates do not address the timing or magnitude of reduction of the notional amounts of those certificates, but only the obligation to pay interest timely on those notional amounts as so reduced from time to time.

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.

See ‘‘Rating’’ in the accompanying base prospectus.

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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 Annexes A-1, A-2, A-3, A-4, A-5, A-6 and B to this prospectus supplement.

‘‘520 Madison Avenue Borrower’’ means the borrower under the 520 Madison Avenue Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans— The 520 Madison Avenue Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘520 Madison Avenue Mortgage Loan’’ means the underlying mortgage loan secured by the 520 Madison Avenue Mortgaged Property.

‘‘520 Madison Avenue Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as 520 Madison Avenue.

‘‘1211 Avenue of the Americas Borrower’’ means the borrower under the 1211 Avenue of the Americas Loan Combination, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The 1211 Avenue of the Americas Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘1211 Avenue of the Americas Co-Lender Agreement’’ means the Co-Lender Agreement for the 1211 Avenue of the Americas Loan Combination.

‘‘1211 Avenue of the Americas Loan Combination’’ means, together, the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan.

‘‘1211 Avenue of the Americas Mortgage Loan’’ means the underlying mortgage loan secured by the 1211 Avenue of the Americas Mortgaged Property.

‘‘1211 Avenue of the Americas Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as 1211 Avenue of the Americas.

‘‘1211 Avenue of the Americas Non-Trust Loan’’ means the Non-Trust Loan secured by the 1211 Avenue of the Americas Mortgaged Property that is, at all times, pari passu in right of payment with the 1211 Avenue of the Americas Mortgage Loan.

‘‘1211 Avenue of the Americas Non-Trust Loan Noteholder’’ means the holder of the promissory note for the 1211 Avenue of the Americas Non-Trust Loan.

‘‘30/360 Basis’’ means the accrual of interest based on a 360-day year consisting of twelve 30-day months.

‘‘A/B Loan Combination’’ means a Loan Combination that consists only of an underlying mortgage loan and one or more Subordinate Non-Trust Loans. The Reston Town Center Loan Combination and the MezzCap Loan Combinations are A/B Loan Combinations.

‘‘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 Trust Fund Expense’’ means an expense of the trust that—

•  arises out of a default on a mortgage loan or an otherwise unanticipated event,
•  is not required to be paid by any party to the series 2006-C7 pooling and servicing agreement,
•  is not included in the calculation of a Realized Loss in respect of any particular underlying mortgage loan,
•  is not covered by a servicing advance or a corresponding collection from the related borrower and is not offset by late payment charges and/or Default Interest on the related mortgage loan or by amounts otherwise payable to the holder of any related Serviced Non-Trust Loan, and
•  causes a shortfall in the payments of interest (other than Post-ARD Additional Interest) or principal on any class of series 2006-C7 certificates.

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We provide some examples of Additional Trust Fund Expenses under ‘‘Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ in this prospectus supplement.

‘‘Administrative Cost Rate’’ means, with respect to each mortgage loan in the trust, the sum of—

•  the per annum rate at which the related master servicing fee (including any related primary servicing fee payable by the master servicer to any related sub-servicer who has entered into a sub-servicing agreement with the master servicer) is calculated under the series 2006-C7 pooling and servicing agreement,
•  the per annum rate at which the monthly trustee fee is calculated under the series 2006-C7 pooling and servicing agreement, and
•  solely with respect to an Outside Serviced Trust Mortgage Loan, the per annum rate at which the applicable servicing fee for the subject Outside Serviced Trust Mortgage Loan is calculated (on a 30/360 Basis) under the applicable pooling and servicing agreement.

‘‘ADR’’ means average daily rate.

‘‘Appraisal Reduction Amount’’ means, for any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan) as to which an Appraisal Trigger Event has occurred, an amount that will equal the excess, if any, of ‘‘x’’ over ‘‘y’’ where—

•  ‘‘x’’ is equal to the sum of:
1.  the Stated Principal Balance of the mortgage loan;
2.  to the extent not previously advanced by or on behalf of the master servicer or the trustee, all unpaid interest, other than any Default Interest and Post-ARD Additional Interest, accrued on the mortgage loan through the most recent due date prior to the date of determination;
3.  all accrued but unpaid special servicing fees, liquidation fees and workout fees with respect to the mortgage loan;
4.  all related unreimbursed advances made by or on behalf of the master servicer, the special servicer or the trustee with respect to the mortgage loan, together with interest on those advances as permitted under the series 2006-C7 pooling and servicing agreement;
5.  any other unpaid items that could become Additional Trust Fund Expenses in respect of the mortgage loan; and
6.  all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents and any unfunded improvement and other applicable reserves, with respect to the related mortgaged real property, net of any escrow reserves held by the master servicer or the special servicer that cover any such item; and
•  ‘‘y’’ is equal to the sum of:
1.  the excess, if any, of—
(a)  90% of the resulting appraised or estimated value of the related mortgaged real property or REO Property (which value may be subject to reduction by the special servicer, acting in accordance with the Servicing Standard, based on its review of the related appraisal and other relevant information), over
(b)  the amount of any obligations secured by liens on the property that are prior to the lien of the mortgage loan;
2.  the amount of escrow payments and reserve funds held by the master servicer with respect to the mortgage loan that—
(a)  are not required to be applied to pay real estate taxes and assessments, insurance premiums or ground rents,

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(b)  are not otherwise scheduled to be applied (except to pay debt service on the mortgage loan) within the 12-month period following the date of determination, and
(c)  may be used to reduce the principal balance of the mortgage loan; and
3.  the amount of any letter of credit that constitutes additional security for the mortgage loan that may be drawn upon for purposes of paying down the principal balance of the mortgage loan.

If, however, with respect to any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan)—

•  an Appraisal Trigger Event occurs,
•  no appraisal or other valuation estimate, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Required Appraisals,’’ is obtained or performed within 60 days after the occurrence of that Appraisal Trigger Event, and
•  either—
1.  no comparable appraisal or other valuation, or update of a comparable appraisal or other valuation, had been obtained or performed during the 12-month period prior to that Appraisal Trigger Event, or
2.  there has been a material change in the circumstances surrounding the related mortgaged real property subsequent to any earlier appraisal or other valuation, or any earlier update of an appraisal or other valuation, that would, in the special servicer’s judgment, materially affect the value of the property,

then until the required appraisal or other valuation is obtained or performed, the Appraisal Reduction Amount for the subject mortgage loan will equal 25% of the Stated Principal Balance of that mortgage loan. After receipt of the required appraisal or other valuation, the special servicer will determine the Appraisal Reduction Amount, if any, for the subject mortgage loan as described in the first sentence of this definition. For purposes of this definition, each mortgage loan that is part of a group of cross-collateralized mortgage loans will be treated separately for purposes of calculating any Appraisal Reduction Amount.

Each Appraisal Reduction Amount for a mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan) will be reduced to zero as of the date the related mortgage loan becomes a corrected mortgage loan, it has remained current for at least three consecutive monthly payments and no other Appraisal Trigger Event has occurred during the preceding three-month period; and no Appraisal Reduction Amount will exist as to any such mortgage loan after it has been paid in full, liquidated, repurchased or otherwise disposed of.

Notwithstanding the foregoing, each Loan Combination will be treated as a single underlying mortgage loan for purposes of calculating an Appraisal Reduction Amount. Consistent therewith, any Appraisal Reduction Amount or the equivalent under the series 2006-C6 pooling and servicing agreement with respect to the 1211 Avenue of the Americas Loan Combination, and any Appraisal Reduction Amount or the equivalent under the series 2006-C1 pooling and servicing agreement with respect to the Triangle Town Center Loan Combination, will be calculated in a manner substantially the same as that described above, except that any unpaid interest accrued on delinquency advances with respect to the related Non-Trust Loan(s) will be taken into account in calculating an Appraisal Reduction Amount with respect to each such Loan Combination.

Any Appraisal Reduction Amount with respect to a Loan Combination will be allocated among the mortgage loans in that Loan Combination as follows—

•  with respect to the 1211 Avenue of the Americas Loan Combination, any resulting Appraisal Reduction Amount will be allocated, on a pro rata basis by balance, between the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan;
•  with respect to the Extendicare Portfolio Loan Combination, any resulting Appraisal Reduction Amount will be allocated, on a pro rata basis by balance, between the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan;

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•  with respect to the Triangle Town Center Loan Combination, any resulting Appraisal Reduction Amount will be allocated under the series 2006-C1 pooling and servicing agreement, first, to the Triangle Town Center Subordinate Tranche Mortgage Loan, up to the amount of the outstanding principal balance of, and any accrued and unpaid interest on, the Triangle Town Center Subordinate Tranche Mortgage Loan, and then, between the Triangle Town Center Note A Senior Non-Trust Loan and the Triangle Town Center Note B-1 Senior Non-Trust Loan, as provided in the series 2006-C1 pooling and servicing agreement; and
•  with respect to each other Loan Combination, any resulting Appraisal Reduction Amount will be allocated, first, to the related Subordinate Non-Trust Loan, up to the amount of the outstanding principal balance of, and all accrued and unpaid interest (other than Default Interest) on, the subject Subordinate Non-Trust Loan, and then, to the subject underlying mortgage loan.

‘‘Appraisal Trigger Event’’ means, with respect to any mortgage loan in the trust (other than an Outside Serviced Trust Mortgage Loan) or any Serviced Non-Trust Loan, any of the following events:

•  the mortgage loan has been modified by the special servicer in a manner that—
1.  affects that amount or timing of any payment of principal or interest due on it, other than, or in addition to, bringing monthly debt service payments current with respect to the mortgage loan,
2.  except as expressly contemplated by the related loan documents, results in a release of the lien of the related mortgage instrument on any material portion of the related mortgaged real property without a corresponding principal prepayment in an amount, or the delivery by the related borrower of substitute real property collateral with a fair market value, that is not less than the fair market value of the property to be released, or
3.  in the judgment of the special servicer, otherwise materially impairs the security for the mortgage loan or materially reduces the likelihood of timely payment of amounts due on the mortgage loan;
•  the mortgage loan is delinquent—
1.  except in the case of a balloon payment, for 60 days beyond the date the subject payment was due, or
2.  solely in the case of a balloon payment, if any, for one business day after the subject balloon payment was due or, in certain circumstances involving the delivery of a refinancing commitment, for 30 days beyond the date on which that balloon payment was due (or for such shorter period ending on the date on which it is determined that the refinancing could not reasonably be expected to occur);
•  a receiver or similar official is appointed and continues for 60 days in that capacity in respect of the mortgaged real property securing the mortgage loan;
•  the related borrower becomes the subject of (1) voluntary bankruptcy, insolvency or similar proceedings, or (2) involuntary bankruptcy, insolvency or similar proceedings that remain undismissed for 60 days;
•  the mortgaged real property securing the mortgage loan becomes an REO Property; or
•  the mortgage loan remains outstanding five years after any extension of its maturity.

Appraisal Trigger Events or the equivalent with respect to the 1211 Avenue of the Americas Mortgage Loan will be as set forth in, and appraisals of the 1211 Avenue of the Americas Subordinate Tranche Mortgaged Property will be conducted under, the pooling and servicing agreement for the Series 2006-C6 Securitization (or other successor servicing agreement). Those Appraisal Trigger Events or the equivalent will be similar, but may not be identical, to those described above.

Appraisal Trigger Events or the equivalent with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan will be as set forth in, and appraisals of the Triangle Town Center Subordinate

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Tranche Mortgaged Property will be conducted under, the pooling and servicing agreement for the Series 2006-C1 Securitization (or other successor servicing agreement). Those Appraisal Trigger Events or the equivalent will be similar, but may not be identical, to those described above.

‘‘ARD Balance’’ means, with respect to an ARD Loan, the expected balance as of the anticipated repayment date, assuming no prepayments or defaults.

‘‘ARD Loan’’ means any mortgage loan in the trust that provides for various material incentives to the related borrower to pay the mortgage loan in full by a specified date prior to the related maturity date, referred to as its anticipated repayment date, but as to which the failure to repay such mortgage loan by such anticipated prepayment date would not by itself be a default.

‘‘Arizona Retail Portfolio Borrower’’ means the borrower under the Arizona Retail Portfolio Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Arizona Retail Portfolio Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Arizona Retail Portfolio Mortgage Loan’’ means the underlying mortgage loan secured by the Arizona Retail Portfolio Mortgaged Property.

‘‘Arizona Retail Portfolio Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Arizona Retail Portfolio.

‘‘Available P&I Funds’’ means the total amount available to make payments of interest and principal on the series 2006-C7 certificates on each distribution date. The Available P&I Funds are more particularly described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Accounts—Collection Account—Withdrawals’’ in this prospectus supplement.

‘‘Balloon Balance’’ has the same meaning as ‘‘Maturity Balance.’’

‘‘Balloon Loan’’ means any mortgage loan in the trust that by its original terms or by virtue of any modification entered into as of the Issue Date provides for an amortization schedule extending beyond its stated maturity date and as to which, in accordance with such terms, the scheduled payment due on its stated maturity date is significantly larger than the scheduled payment due on the due date next preceding its stated maturity date.

‘‘Capital Imp. Reserve’’ means, with respect to any mortgage loan in the trust, funded reserves escrowed for repairs, replacements and corrections of issues outlined in the engineering reports.

‘‘CBE’’ means corporate bond equivalent.

‘‘CERCLA’’ means the Federal Comprehensive Environmental, Response, Compensation and Liability Act of 1980, as amended.

‘‘Class A-AB Planned Principal Balance’’ has the meaning assigned to that term under ‘‘Description of the Certificates—Payments—Payments of Principal’’ in this prospectus supplement.

‘‘Class A Senior Principal Payment Cross-Over Date’’ means the first distribution date as of the commencement of business on which—

•  the class A-1, A-2, A-AB, A-3 and A-1A certificates, or any two or more of those classes, remain outstanding, and
•  the total principal balance of the class A-M, A-J, B, C, D, E, F, G, H, J, K, L, M, N, P, Q, S and T certificates have previously been reduced to zero as described under ‘‘Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ in this prospectus supplement.

‘‘Class X-CL Component’’ has the meaning assigned thereto under ‘‘Description of the Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.

‘‘Class X-CP Component’’ has the meaning assigned thereto under ‘‘Description of the Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.

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‘‘Class X-W Component’’ has the meaning assigned thereto under ‘‘Description of the Certificates—Payments—Calculation of Pass-Through Rates’’ in this prospectus supplement.

‘‘Clearstream’’ means Clearstream Banking Luxembourg.

‘‘CMSA’’ means the Commercial Mortgage Securities Association.

‘‘Co-Lender Agreement’’ means the co-lender agreement or other intercreditor agreement that has been executed in connection with each Loan Combination, that identifies the respective rights and obligations of the holders of the promissory notes that evidence the subject Loan Combination, and that is described under ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement.

‘‘Colony Square Borrower’’ means the borrower under the Colony Square Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Colony Square Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Colony Square Mortgage Loan’’ means the underlying mortgage loan secured by the Colony Square Mortgaged Property.

‘‘Colony Square Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Colony Square.

‘‘Condemnation Proceeds’’ means all proceeds and other amounts received in connection with the condemnation or the taking by right of eminent domain of a mortgaged real property or an REO Property, other than any such proceeds applied to the restoration of the property or otherwise released to the related borrower or another appropriate person.

‘‘CPI’’ means consumer price index.

‘‘CPR’’ means an assumed constant prepayment rate 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,’’ ‘‘Cut-off Date LTV Ratio’’ and ‘‘Cut-off Date LTV’’ each means:

•  with respect to any mortgage loan in the trust (other than an underlying mortgage loan that is part of an Outside Serviced Loan Combination or the Extendicare Portfolio Loan Combination), the ratio, expressed as a percentage, of—
1.  the cut-off date principal balance of the subject underlying mortgage loan, as shown on Annex A-1 to this prospectus supplement, to
2.  the appraised value of the related mortgaged real property or properties, as shown on Annex A-1 to this prospectus supplement (but without regard to any mortgaged real property or properties that are collateral for the subject underlying mortgage loan solely by reason of cross-collateralization with another mortgage loan);
•  with respect to each of the 1211 Avenue of the Americas Mortgage Loan and the Extendicare Portfolio Mortgage Loan, the ratio, expressed as a percentage, of—
1.  the cut-off date principal balance of the subject underlying mortgage loan, as shown on Annex A-1 to this prospectus supplement, together with the cut-off date principal balance of the related Pari Passu Non-Trust Loan, to
2.  the appraised value of the related mortgaged real property, as shown on Annex A-1 to this prospectus supplement; and
•  with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan, the ratio, expressed as a percentage, of—
1.  the aggregate cut-off date principal balance of the Triangle Town Center Subordinate Tranche Mortgage Loan, as shown on Annex A-1 to this prospectus supplement, together with the cut-off date principal balance of both of the Triangle Town Center Senior Non-Trust Loans, to

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2.  the appraised value of the Triangle Town Center Subordinate Tranche Mortgaged Property, as shown on Annex A-1 to this prospectus supplement.

‘‘Cut-off Date U/W NCF DSCR’’ means, with respect to any mortgage loan in the trust, the U/W NCF DSCR, except that for any underlying mortgage loan that provides for payments of interest only for a specified period prior to the maturity date, Cut-off Date U/W NCF DSCR is equal to the Net Cash Flow for the related mortgaged real property, divided by the sum of the actual interest-only payments (calculated in accordance with the related loan documents) that will be due in respect of that underlying mortgage loan during the 12-month period following the cut-off date or, if that underlying mortgage loan is part of a Loan Combination (other than an A/B Loan Combination), that will be due in respect of all of the mortgage loans in the subject Loan Combination.

‘‘D(x)’’ means, with respect to any mortgage loan in the trust, a period of x months during which voluntary prepayments of principal are prohibited, but the related borrower is permitted to defease that mortgage loan in order to obtain a release of one or more of the related mortgaged real properties.

‘‘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 related mortgage interest rate and any Post-ARD Additional Interest accrued on the mortgage loan.

‘‘Discount Rate’’ means, with respect to any prepaid mortgage loan in the trust, a rate which, when compounded monthly, is equivalent to the ‘‘Yield Maintenance Treasury Rate’’ when compounded semi-annually. The ‘‘Yield Maintenance Treasury Rate’’ means the yield calculated by the master servicer by linear interpolation of the yields, as such yields are reported in Federal Reserve Statistical Release H.15-Selected Interest Rates (519), under the heading U.S. Government Securities/Treasury Constant Maturities, with respect to the maturity dates set forth thereunder, one longer and one shorter, most nearly approximating the maturity date (or, in the case of an ARD Loan, the anticipated repayment date) of the relevant prepaid mortgage loan. If Federal Reserve Statistical Release H.15 is no longer published or does not indicate the information set forth above, then the master servicer will select a comparable publication or source for the purposes of determining the Yield Maintenance Treasury Rate.

‘‘DSCR’’ means debt service coverage ratio.

‘‘DSCR Net Cash Flow’’ has the same meaning as Underwritten Debt Service Coverage Ratio.

‘‘Effective Gross Income,’’ ‘‘EGI’’ and ‘‘U/W EGI’’ each means for any mortgaged real property securing a mortgage loan in the trust:

•  the revenue derived from the use and operation of that property; less
•  allowances for vacancies, concessions and credit losses.

In determining rental revenue for multifamily rental properties, self-storage properties and mobile home park properties, the related originator generally either reviewed rental revenue shown on the certified rolling 12-month operating statements or annualized the rental revenue and reimbursement of expenses shown on rent rolls or recent partial year operating statements with respect to the prior one- to 12-month periods.

In the case of hospitality properties, gross receipts were generally determined on the basis of historical operating levels shown on the borrower-supplied 12-month trailing operating statements.

In general, any non-recurring revenue items and non-property related revenue were eliminated from the calculation of EGI.

In determining the ‘‘revenue’’ component of EGI for each mortgaged real property (other than a hospitality property), the related originator generally relied on the most recent rent roll supplied by the related borrower (subject to the discussion in the following paragraph). In some cases, where the actual vacancy shown on that rent roll and the market vacancy was less than 5%, the originator generally assumed a minimum of 5% vacancy in determining revenue from rents, except that, in the case of certain

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anchored shopping centers, certain office properties and certain single tenant properties, space occupied by those anchor tenants, significant office tenants or single tenants may have been disregarded in performing the vacancy adjustment due to the length of the related leases or the creditworthiness of those tenants, in accordance with the originator’s underwriting standards. For mortgaged real properties (other than hospitality properties), the related originator generally annualized rental revenue shown on the most recent certified rent roll, after applying the applicable vacancy factor, without further regard to the terms, including expiration dates, of the leases shown on that rent roll.

In the case of some of the underlying mortgage loans, the calculation of EGI for the related mortgaged real property or properties was based on assumptions regarding projected rental income, annual net cash flow and/or occupancy, including, without limitation, one or more of the following:

•  the assumption that a particular tenant at the subject mortgaged real property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged real property or is out for signature will be executed and in place on a future date;
•  the assumption that a portion of the currently vacant and unleased space at the subject mortgaged real property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market;
•  the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged real property;
•  certain additional lease-up assumptions as may be described in the footnotes to Annex A-1 to this prospectus supplement; and
•  certain other assumptions regarding the payment of rent not currently being paid.

There is no assurance that the foregoing assumptions made with respect to any subject underlying mortgage loan will, in fact, be consistent with actual property performance. If they are not consistent, actual annual effective gross income for a mortgaged property may be less than the EGI presented with respect to that property in this prospectus supplement.

For more detailed information regarding the EGI with respect to specific underlying mortgage loans and/or the related mortgaged real properties, you should review Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans and the footnotes thereto.

‘‘ERISA’’ means the Employee Retirement Income Security Act of 1974, as amended.

‘‘ERISA Plan’’ means any employee benefit plan that is subject to the fiduciary responsibility provisions of ERISA.

‘‘Euroclear’’ means The Euroclear System.

‘‘Exchange Act’’ means the Securities Exchange Act of 1934, as amended.

‘‘Exemption-Favored Party’’ means any of—

•  Lehman Brothers Inc.,
•  any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Lehman Brothers Inc., and
•  any member of the underwriting syndicate or selling group of which a person described in the prior two bullets is a manager or co-manager with respect to the offered certificates.

‘‘Extendicare Portfolio Borrowers’’ means the borrowers under the Extendicare Portfolio Loan Combination, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Extendicare Portfolio Mortgage Loan—The Borrowers and Sponsor’’ in this prospectus supplement.

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‘‘Extendicare Portfolio Co-Lender Agreement’’ means the Co-Lender Agreement for the Extendicare Portfolio Loan Combination.

‘‘Extendicare Portfolio Loan Combination’’ means, together, the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan.

‘‘Extendicare Portfolio Mortgage Loan’’ means the underlying mortgage loan secured by the Extendicare Portfolio Mortgaged Property.

‘‘Extendicare Portfolio Mortgaged Properties’’ means the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Extendicare Portfolio.

‘‘Extendicare Portfolio Non-Trust Loan’’ means the Non-Trust Loan secured by the Extendicare Portfolio Mortgaged Properties that is, at all times, pari passu in right of payment with the Extendicare Portfolio Mortgage Loan.

‘‘Extendicare Portfolio Non-Trust Loan Noteholder’’ means the holder of the promissory note for the Extendicare Portfolio Non-Trust Loan.

‘‘FF&E’’ means furniture, fixtures and equipment.

‘‘Fitch’’ means Fitch, Inc.

‘‘FSMA’’ means the Financial Services and Markets Act 2000.

‘‘GAAP’’ means generally accepted accounting principles in the United States of America.

‘‘GLA’’ means gross leasable area.

‘‘Government Property Advisors Portfolio Borrower’’ means the borrower under the Government Property Advisors Portfolio Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Government Property Advisors Portfolio Mortgage Loan —The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Government Property Advisors Portfolio Mortgage Loan’’ means the underlying mortgage loan secured by the Government Property Advisors Portfolio Mortgaged Property.

‘‘Government Property Advisors Portfolio Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Government Property Advisors Portfolio.

‘‘Government Securities’’ means government securities within the meaning of section 2(a)(16) of the Investment Company Act of 1940, as amended.

‘‘Initial Loan Group 1 Balance’’ means the aggregate principal balance, as of the cut-off date, of the underlying mortgage loans that are part of Loan Group 1, after application of all scheduled payments of principal due on or before the cut-off date.

‘‘Initial Loan Group 2 Balance’’ means the aggregate principal balance, as of the cut-off date, of the underlying mortgage loans that are part of Loan Group 2, after application of all scheduled payments of principal due on or before the cut-off date.

‘‘Initial Mortgage Pool Balance’’ means the aggregate principal balance, as of the cut-off date, of the mortgage loans that are included in the trust, after application of all scheduled payments of principal due on or before the cut-off date.

‘‘Insurance Proceeds’’ means all proceeds and other amounts received under any hazard, flood, title or other insurance policy that provides coverage with respect to a mortgaged real property or the related underlying mortgage loan, together with any comparable amounts received with respect to an REO Property, other than any such proceeds applied to the restoration of the property or otherwise released to the related borrower or another appropriate person.

‘‘Internal Revenue Code’’ means the Internal Revenue Code of 1986, as amended.

‘‘IRS’’ means the Internal Revenue Service.

‘‘Issue Date’’ means the date of initial issuance for the series 2006-C7 certificates, which will be on or about December 5, 2006.

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‘‘Key,’’ as referred to under the ‘‘Loan Seller’’ column on Annex A-1 hereto, means KeyBank or any affiliate of KeyBank.

‘‘KeyBank’’ means KeyBank National Association.

‘‘KeyBank Mortgage Loan’’ means each mortgage loan that was, directly or indirectly, acquired by us from the KeyBank Mortgage Loan Seller for inclusion in the trust.

‘‘KeyBank Mortgage Loan Seller’’ means KeyBank National Association.

‘‘LaSalle’’ means LaSalle Bank National Association.

‘‘LBHI’’ means Lehman Brothers Holdings Inc.

‘‘Lease Termination Payments’’ means any fees or payments received from any tenant under a lease affecting a mortgaged real property in connection with termination cancellation, surrender, sale or other disposition of such lease.

‘‘Lehman,’’ as referred to under the ‘‘Loan Seller’’ column on Annex A-1 hereto, means LBHI or any affiliate of LBHI.

‘‘Lehman Mortgage Loan’’ means each mortgage loan that was, directly or indirectly, acquired by us from the Lehman Mortgage Loan Seller for inclusion in the trust.

‘‘Lehman Mortgage Loan Seller’’ means, individually and collectively, LBHI and each of our other affiliates, if any, that transferred mortgage loans to us for inclusion in the trust.

‘‘Liquidation Proceeds’’ means, in general, all cash proceeds received and retained by the trust in connection with—

•  the full or partial liquidation of defaulted mortgage loans by foreclosure or otherwise;
•  the repurchase of any mortgage loan by us or the applicable mortgage loan seller, as described under ‘‘Description of the Mortgage Pool—Cures and Repurchases’’ in this prospectus supplement;
•  the purchase of any specially serviced mortgage loan as to which a material default exists, by any holder of a purchase option, as described under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Fair Value Option’’ in this prospectus supplement;
•  the purchase of all remaining mortgage loans and REO Properties in the trust by us, Lehman Brothers Inc., the special servicer, any certificateholder of the series 2006-C7 controlling class or the master servicer, as described under ‘‘Description of the Offered Certificates—Termination’’ in this prospectus supplement;
•  the purchase of an underlying mortgage loan that is part of a Loan Combination by a related Non-Trust Loan Noteholder in accordance with the related Co-Lender Agreement;
•  the purchase of any defaulted mortgage loan in the trust by a mezzanine lender pursuant to a purchase right as set forth in the related intercreditor agreement; and
•  the sale of an REO Property.

‘‘LNR’’ means LNR Property Holdings Ltd.

‘‘LNR Partners’’ means LNR Partners, Inc.

‘‘Loan Combination’’ means each of the Loan Combinations described, and identified in the chart, under ‘‘Description of the Mortgage Pool—Loan Combinations—General’’ in this prospectus supplement.

‘‘Loan Combination Controlling Party’’ means the party or, collectively, the parties designated as such with respect to each Loan Combination (other than a MezzCap Loan Combination) and having various rights and powers with respect to the subject Loan Combination, including (in the case of a Serviced Loan Combination) those described under ‘‘The Series 2006-C7 Pooling and Servicing

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Agreement—The Series 2006-C7 Controlling Class Representative and the Serviced Non-Trust Loan Noteholders’’ in this prospectus supplement. The Loan Combination Controlling Party for each Loan Combination (other than a MezzCap Loan Combination) is identified under each italicized subheading entitled ‘‘—Co-Lender Agreement—Consent Rights’’ in the applicable section relating to the subject Loan Combination under ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement.

‘‘Loan Group 1’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—General’’ in this prospectus supplement.

‘‘Loan Group 1 Multifamily Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as 504 Esplanade Apartments.

‘‘Loan Group 2’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—General’’ in this prospectus supplement.

‘‘Loan per Bed’’ means, with respect to each underlying mortgage loan secured by a lien on a mortgaged real property that constitutes a healthcare property, the cut-off date principal balance of that mortgage loan as shown on Annex A-1 to this prospectus supplement (or, in the case of any underlying mortgage loan that is part of a Loan Combination (other than an A/B Loan Combination), the total cut-off date principal balance of that mortgage loan and the related Non-Trust Loan(s)), divided by the number of beds at or in the related mortgaged real property.

‘‘Loan per SF,’’ ‘‘Loan per Sq. Ft.’’ and ‘‘Loan per Square Foot’’ each means, with respect to each underlying mortgage loan secured by a lien on a mortgaged real property that constitutes a retail, industrial/warehouse, self-storage or office property, the cut-off date principal balance of that mortgage loan as shown on Annex A-1 to this prospectus supplement (or, in the case of any underlying mortgage loan that is part of a Loan Combination (other than an A/B Loan Combination), the total cut-off date principal balance of that mortgage loan and the related Non-Trust Loan(s)), divided by the net rentable square foot area of the related mortgaged real property.

‘‘Loan per Unit’’ means, with respect to each underlying mortgage loan secured by a lien on a mortgaged real property that constitutes a multifamily rental apartment, a mobile home park property or a hospitality property, the cut-off date principal balance of that mortgage loan as shown on Annex A-1 to this prospectus supplement (or, in the case of any underlying mortgage loan that is part of a Loan Combination (other than an A/B Loan Combination), the total cut-off date principal balance of that mortgage loan and the related Non-Trust Loan(s)), divided by the number of dwelling units, pads or guest rooms, as applicable, at or on the related mortgaged real property.

‘‘LOC’’ means letter of credit.

‘‘L(x)’’ means, with respect to any mortgage loan in the trust, a period of x months during which voluntary prepayments of principal are prohibited and defeasance is not permitted.

‘‘Martin Resorts Borrower’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Martin Resorts Mortgage Loan—The Borrower and the Sponsor’’ in this prospectus supplement.

‘‘Martin Resorts Mortgage Loan’’ means the underlying mortgage loan secured by the Martin Resorts Mortgaged Property.

‘‘Martin Resorts Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Martin Resorts.

‘‘Master Servicer Remittance Amount’’ has the meaning assigned to that term under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—Accounts—Custodial Account—Withdrawals’’ in this prospectus supplement.

‘‘Material Breach’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool —Representations and Warranties’’ in this prospectus supplement.

‘‘Material Document Omission’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—Assignment of the Underlying Mortgage Loans’’ in this prospectus supplement.

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‘‘Maturity Balance’’ means, with respect to any mortgage loan in the trust, the expected balance of the subject mortgage loan on its maturity date or, in the case of an ARD Loan, its anticipated repayment date, assuming no prepayments of principal or defaults, except that, with respect to each of the mortgage loans secured by the mortgaged real properties identified on Annex A-1 to this prospectus supplement as Wolverine Portfolio, Redwood Portfolio II, and Lakewood Apartment Portfolio, respectively, the maturity date has been calculated assuming that any required or permitted additional monthly amortization payments are made thereon from excess cash flow as contemplated by the definition of ‘‘Modeling Assumptions.’’

‘‘Maturity Date Loan-to-Value Ratio,’’ ‘‘Maturity Date LTV,’’ ‘‘Maturity LTV Ratio’’ and ‘‘Scheduled Maturity LTV’’ each means:

•  with respect to any mortgage loan in the trust (other than the 1211 Avenue of the Americas Mortgage Loan, the Extendicare Portfolio Mortgage Loan and the Triangle Town Center Subordinate Tranche Mortgage Loan), the ratio, expressed as a percentage, of—
1.  the Maturity Balance of the subject underlying mortgage loan, to
2.  the appraised value of the related mortgaged real property or properties, as shown on Annex A-1 to this prospectus supplement (but without regard to any mortgaged real property or properties that are collateral for the subject underlying mortgage loan solely by reason of cross-collateralization with another mortgage loan);
•  with respect to each of the 1211 Avenue of the Americas Mortgage Loan and the Extendicare Portfolio Mortgage Loan, the ratio, expressed as a percentage, of—
1.  the expected total balance of the subject underlying mortgage loan and the related Pari Passu Non-Trust Loan on their stated maturity date, assuming no prepayments of principal or defaults, to
2.  the appraised value of the related mortgaged real property or properties, as shown on Annex A-1 to this prospectus supplement; and
•  with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan, the ratio, expressed as a percentage, of—
1.  the expected total principal balance on the related stated maturity date, assuming no prepayments of principal or defaults, of the Triangle Town Center Subordinate Tranche Mortgage Loan, together with both of the Triangle Town Center Senior Non-Trust Loans, to
2.  the appraised value of the Triangle Town Center Subordinate Tranche Mortgaged Property, as shown on Annex A-1 to this prospectus supplement.

‘‘MezzCap Loan Combination’’ has the meaning given to that term under ‘‘Description of the Mortgage Pool—Loan Combinations—MezzCap Loan Combinations’’ in this prospectus supplement.

‘‘MezzCap Material Default’’ means, with respect to a MezzCap Loan Combination, one of the following events: (a) either of the related underlying mortgage loan or Subordinate Non-Trust Loan has been accelerated; (b) a continuing monetary default; or (c) a bankruptcy action has been filed by or against the related borrower.

‘‘Midtown Plaza Borrowers’’ means the borrowers under the Midtown Plaza Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Midtown Plaza Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Midtown Plaza Mortgage Loan’’ means the underlying mortgage loan secured by the Midtown Plaza Mortgaged Property.

‘‘Midtown Plaza Mortgaged Property’’ means the mortgaged real property identified on Annex A 1 to this prospectus supplement as Midtown Plaza.

‘‘Modeling Assumptions’’ means, collectively, the following assumptions regarding the series 2006-C7 certificates and the mortgage loans in the trust:

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•  the mortgage loans have the characteristics set forth on Annex A-1 and the Initial Mortgage Pool Balance is approximately $3,019,658,540, the Initial Loan Group 1 Balance is approximately $2,592,035,525 and the Initial Loan Group 2 Balance is approximately $427,623,015;
•  the initial total principal balance or notional amount, as the case may be, of each class of series 2006-C7 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 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 for monthly payments which are timely received, and each of the mortgage loans accrues interest on an Actual/360 Basis or a 30/360 Basis, as applicable;
•  all prepayments on the mortgage loans are assumed to be accompanied by a full month’s interest;
•  there are no breaches of our representations and warranties or those of the UBS Mortgage Loan Seller or of the KeyBank Mortgage Loan Seller regarding the mortgage loans;
•  no voluntary or involuntary prepayments are received as to any mortgage loan during that mortgage loan’s prepayment lock-out period, defeasance period or prepayment consideration period, in each case if any;
•  each ARD Loan is paid in full on its anticipated repayment date;
•  except as otherwise expressly assumed in any of the other bullets in this definition, 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;
•  no person or entity entitled thereto exercises its right of optional termination described in this prospectus supplement under ‘‘Description of the Offered Certificates—Termination;’’
•  there are no Material Breaches or Material Document Omissions with respect to the underlying mortgage loans;
•  no Prepayment Interest Shortfalls are incurred and no prepayment premiums or yield maintenance charges are collected;
•  there are no Additional Trust Fund Expenses;
•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Wolverine Portfolio, where the related borrower is required to make additional monthly amortization payments of $48,719.31, solely to the extent available from excess cash flow, on and after the payment date in December 11, 2011, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments;
•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Redwood Portfolio II, where the related borrower is required to make additional monthly amortization payments of $22,144.02, solely to the extent available from excess cash flow, on and after the payment date in October 11, 2011, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments;
•  with respect to the underlying mortgage loan secured by the mortgaged real property identified on Annex A-1 to this prospectus supplement as Lakewood Apartment Portfolio, where the related borrower is required to make additional monthly amortization payments of $4,573.23, solely to the extent available from excess cash flow, on and after the payment date in November 11, 2009, it is assumed that the related borrower does, in fact, make such additional monthly amortization payments;

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•  payments on the offered certificates are made on the 15th day of each month, commencing in December 2006; and
•  the offered certificates are settled on December 5, 2006.

For purposes of the Modeling Assumptions, a ‘‘prepayment consideration period’’ is any period during which a mortgage loan provides that voluntary prepayments be accompanied by prepayment consideration in the form of (a) a yield maintenance charge, (b) a prepayment premium calculated as a percentage—which may decline over time—of the principal amount prepaid or (c) some combination of (a) and (b).

‘‘Moody’s’’ means Moody’s Investors Service, Inc.

‘‘N/A’’ and ‘‘NAP’’ mean that, with respect to a particular category of data, the data is not applicable.

‘‘NAV’’ means that, with respect to a particular category of data, the data is not available.

‘‘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 entire mortgage pool during the related collection period, over
•  the total payments made by the master servicer to cover those Prepayment Interest Shortfalls.

‘‘Net Cash Flow,’’ ‘‘U/W Net Cash Flow’’ and ‘‘U/W NCF’’ each means for any mortgaged real property securing a mortgage loan in the trust:

•  the revenue derived from the use and operation of that property; less
•  the total of the following items—
(a)  allowances for vacancies and credit losses,
(b)  operating expenses, such as utilities, administrative expenses, repairs and maintenance, management fees and advertising,
(c)  fixed expenses, such as insurance, real estate taxes and ground lease payments, if applicable, and
(d)  replacement reserves, and reserves for tenant improvement costs and leasing commissions, based either on actual reserves or on underwritten annualized amounts.

Net Cash Flow can also be expressed as (a) Effective Gross Income minus (b) Total Expenses and underwritten replacement reserves and tenant improvements and leasing commissions.

Net Cash Flow does not reflect interest expenses and non-cash items, such as depreciation and amortization, and generally does not reflect capital expenditures.

In determining the Net Cash Flow for any mortgaged real property securing a mortgage loan in the trust, the related originator relied on one or more of the following items supplied by the related borrower:

•  rolling 12-month operating statements;
•  applicable year-to-date financial statements, if available;
•  full year budgeted financial statements, if available;
•  except in the case of hospitality properties, single tenant properties and self-storage properties, rent rolls that were current as of a date not earlier than eight months prior to the respective date of origination; and
•  in the case of single tenant properties, the payments due under the related lease.

In the case of the 10 underlying mortgage loans described under ‘‘Description of the Mortgage Pool —Significant Underlying Mortgage Loans’’ in this prospectus supplement and a few other underlying mortgage loans, some of the above described items were reviewed by an accountant under a set of agreed

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upon procedures. Except as described in the prior sentence, however, these items were not audited or otherwise confirmed by an independent party.

In determining rental revenue for multifamily rental properties, self-storage properties and mobile home park properties, the related originator either reviewed rental revenue shown on the certified rolling 12-month operating statements or annualized the rental revenue and reimbursement of expenses shown on rent rolls or recent partial year operating statements with respect to the prior one- to 12-month periods.

In the case of hospitality properties, gross receipts were determined on the basis of historical operating levels shown on the borrower-supplied 12-month trailing operating statements.

In general, any non-recurring revenue items and non-property related revenue were eliminated from the calculation of Net Cash Flow and U/W Net Cash Flow.

In determining the ‘‘revenue’’ component of Net Cash Flow for each mortgaged real property (other than a hospitality property), the related originator generally relied on the most recent rent roll supplied by the related borrower (subject to the discussion in the following paragraph). In some cases, where the actual vacancy shown on that rent roll and the market vacancy was less than 5%, the originator generally assumed a minimum of 5% vacancy in determining revenue from rents, except that, in the case of certain anchored shopping centers, certain office properties and certain single tenant properties, space occupied by those anchor tenants, significant office tenants or single tenants may have been disregarded in performing the vacancy adjustment due to the length of the related leases or the creditworthiness of those tenants, in accordance with the originator’s underwriting standards. For mortgaged real properties (other than hospitality properties), the related originator generally annualized rental revenue shown on the most recent certified rent roll, after applying the applicable vacancy factor, without further regard to the terms, including expiration dates, of the leases shown on that rent roll.

In the case of the Extendicare Portfolio Mortgage Loan, in calculating U/W NCF, the ‘‘revenue’’ component is based on the aggregate operating revenue at the 82 Extendicare Portfolio Mortgaged Properties, and not on payments under the Master Lease or the Operating Leases.

In the case of some of the underlying mortgage loans, the calculation of Net Cash Flow, U/W Net Cash Flow and U/W NCF for the related mortgaged real property or properties (which is, in turn, used in the calculation of underwritten debt service coverage ratios) was based on assumptions regarding projected rental income, annual net cash flow and/or occupancy, including, without limitation, one or more of the following:

•  the assumption that a particular tenant at the subject mortgaged real property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged real property or is out for signature will be executed and in place on a future date;
•  the assumption that a portion of the currently vacant and unleased space at the subject mortgaged real property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market;
•  the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged real property;
•  certain additional lease-up assumptions as may be described in the footnotes to Annex A-1 to this prospectus supplement; and
•  certain other assumptions regarding the payment of rent not currently being paid.

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There is no assurance that the foregoing assumptions made with respect to any subject underlying mortgage loan will, in fact, be consistent with actual property performance. Actual annual Net Cash Flow for a mortgaged property may be less than the U/W Net Cash Flow presented with respect to that property in this prospectus supplement.

In determining the ‘‘expense’’ component of Net Cash Flow for each mortgaged real property, the related originator generally relied on full-year or year-to-date financial statements, rolling 12-month operating statements and/or year-to-date financial statements supplied by the related borrower, except that:

•  if tax or insurance expense information more current than that reflected in the financial statements was available, the newer information was generally used;
•  property management fees were generally assumed to be 1.0% to 6.0% (depending on the property) of effective gross revenue (or, in the case of a hospitality property, gross receipts), except that, in some cases, property management fees were assumed to be capped at $1,000,000; and
•  in general, assumptions were made with respect to the average amount of reserves for leasing commissions, tenant improvement expenses and capital expenditures.

Annual replacement reserves are —

(a) in the case of retail, office, self-storage and industrial/warehouse properties, generally not more than $0.31 per square foot of net rentable commercial area and may be zero;

(b) in the case of multifamily rental apartments, generally not more than approximately $1,333 per residential unit per year, depending on the condition of the property any may be zero;

(c) in the case of mobile home park properties, generally $44 per pad per year; and

(d) in the case of hospitality properties, generally 4%, inclusive, of gross revenues.

In some instances, the related originator (where it deemed appropriate) recharacterized as capital expenditures those items reported by borrowers as operating expenses, thereby increasing ‘‘Net Cash Flow.’’

For more detailed information regarding the Net Cash Flow with respect to specific underlying mortgage loans and/or the related mortgaged real properties, you should review Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans and the footnotes thereto.

Net Cash Flow will be calculated either with respect to a particular 12-month period or otherwise on an annualized basis.

‘‘Net Mortgage Pass-Through Rate’’ means:

•  in the case of each underlying mortgage loan that accrues interest on a 30/360 Basis, for any distribution date, an annual rate equal to—
1.  the mortgage interest rate in effect for that mortgage loan as of the Issue Date,

minus

2.  the related Administrative Cost Rate;
•  in the case of each underlying mortgage loan (other than the 1211 Avenue of the Americas Mortgage Loan and/or a KeyBank Mortgage Loan) that accrues interest on an Actual/360 Basis, for any distribution date, an annual rate generally equal to—

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1.  the product of (a) 12, times (b) a fraction, expressed as a percentage, the numerator of which, subject to adjustment as described below in this definition, is the total amount of interest that accrued or would have accrued, as applicable, with respect to that mortgage loan on an Actual/360 Basis during the related interest accrual period, based on its Stated Principal Balance immediately preceding the subject distribution date and its mortgage interest rate in effect as of the Issue Date, and the denominator of which is the Stated Principal Balance of that mortgage loan immediately prior to the subject distribution date,

minus

2.  the related Administrative Cost Rate;
•  in the case of the 1211 Avenue of the Americas Mortgage Loan (which accrues interest on an Actual/360 Basis), for any distribution date, an annual rate generally equal to—
1.  the product of (a) 12, times (b) a fraction, expressed as a percentage, the numerator of which, subject to adjustment as described below in this definition, is the total amount of interest that accrued or would have accrued, as applicable, with respect to that mortgage loan on an Actual/360 Basis during the related interest accrual period, based on its Stated Principal Balance immediately preceding the subject distribution date and an annual rate equal to (i) its mortgage interest rate in effect as of the Issue Date, minus (ii) 0.0100% (which is the related annual servicing fee rate on a 30/360 Basis under the series 2006-C6 pooling and servicing agreement), adjusted to an actual/360 equivalent, and the denominator of which is the Stated Principal Balance of that mortgage loan immediately prior to the subject distribution date,

minus

2.  the sum of the related master servicing fee rate and the trustee fee rate under the series 2006-C7 pooling and servicing agreement; and
•  in the case of the each KeyBank Mortgage Loan that accrues interest on an Actual/360 Basis, for any distribution date, an annual rate generally equal to the product of (a) 12, times (b) a fraction, expressed as a percentage, the numerator of which, subject to adjustment as described below in this definition, is the total amount of interest that accrued or would have accrued, as applicable, with respect to that mortgage loan on an Actual/360 Basis during the related interest accrual period, based on its Stated Principal Balance immediately preceding the subject distribution date and an annual rate equal to (i) its mortgage interest rate in effect as of the Issue Date, minus (ii) the related Administrative Cost Rate, and the denominator of which is the Stated Principal Balance of that mortgage loan immediately prior to the subject 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 that comprises the numerator of the fraction described in clause 1(b) of each of the second and third bullets, and clause (b) of the fourth bullet, of this definition will be decreased to reflect any interest reserve amount with respect to the subject mortgage loan that is transferred from the trustee’s collection 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 that comprises the numerator of the fraction described in clause 1(b) of each of the second and third bullets, and clause (b) of the fourth bullet, of this definition will be increased to reflect any interest reserve amount(s) with respect to the subject mortgage loan that are transferred from the trustee’s interest reserve account to the trustee’s collection account during that month.

‘‘Net Operating Income,’’ ‘‘U/W Net Operating Income’’ and ‘‘U/W NOI’’ each means, for any mortgaged real property securing a mortgage loan in the trust, an amount generally equal to:

•  the U/W Net Cash Flow for that mortgaged real property;

plus

•  underwritten replacement reserves and tenant improvements and leasing commissions.

Net Operating Income can also be expressed as Effective Gross Income minus Total Expenses.

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Net Operating Income will be calculated either with respect to a particular 12-month period or otherwise on an annualized basis.

‘‘Non-Trust Loan’’ means any mortgage loan that is part of a Loan Combination but is not included in the trust.

‘‘Non-Trust Loan Noteholder’’ means the holder of a promissory note for a Non-Trust Loan.

‘‘Non-Trust Loan Securities’’ means any securities backed by a Serviced Non-Trust Loan.

‘‘NR’’ means not rated.

‘‘O(z)’’ means, with respect to any Mortgage Loan, a period of z months during which prepayments of principal are permitted without the payment of any prepayment premium or yield maintenance charge and no defeasance can be required.

‘‘Occupancy Percentage’’ or ‘‘Occupancy Rate’’ means:

•  in the case of multifamily rental properties and mobile home park properties, the percentage of rental units or pads, as applicable, that are rented as of the date of determination;
•  in the case of office, retail and industrial/warehouse properties, the percentage of the net rentable square footage rented as of the date of determination (subject to, in the case of certain underlying mortgage loans, one or more of the additional lease-up assumptions described in the following paragraph);
•  in the case of healthcare properties, the percentage of available beds occupied as of the date of determination;
•  in the case of hospitality properties, the percentage of available rooms occupied for the trailing 12-month period ending on the date of determination; and
•  in the case of self-storage facilities, either the percentage of the net rentable square footage rented or the percentage of units rented for the trailing 12-month period ending on the date of determination, depending on borrower reporting.

Occupancy Percentage or Occupancy Rate with respect to an underlying mortgage loan secured by multiple mortgaged real properties reflects the weighted average occupancy of those mortgaged real properties based upon the portion of such mortgage loan allocated to each related mortgaged real property.

In the case of some of the underlying mortgage loans, the calculation of Occupancy Percentage or Occupancy Rate for the related mortgaged real property or properties was based on assumptions regarding projected occupancy, including one or more of the following:

•  the assumption that a particular tenant at the subject mortgaged real property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged real property or is out for signature will be executed and in place on a future date;
•  the assumption that a portion of the currently vacant and unleased space at the subject mortgaged real property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged real property; and
•  certain additional lease-up assumptions as may be described in the footnotes to Annex A-1 to this prospectus supplement.

There is no assurance that the foregoing assumptions made with respect to any subject underlying mortgage loan will, in fact, be consistent with actual property performance.

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For more detailed information regarding Occupancy Percentages and Occupancy Rates with respect to specific underlying mortgage loans and/or the related mortgaged real properties, you should review Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans and the footnotes thereto.

‘‘Original Amortization Term’’ means, with respect to each mortgage loan in the trust, the number of months from origination to the month in which that mortgage loan would fully amortize in accordance with its amortization schedule, without regard to any balloon payment that may be due, and assuming no prepayments of principal and no defaults.

‘‘Original Interest-Only Period’’ means, with respect to any mortgage loan in the trust, the period, if any, following the related origination date during which scheduled payments of interest only are required.

‘‘Original Term to Maturity’’ means, with respect to each mortgage loan in the trust, the number of months from origination to maturity or, in the case of an ARD Loan, to the anticipated repayment date.

‘‘Other Secured Debt’’ means debt that is secured by the related mortgaged real property or by direct or indirect interests in the borrower of the related underlying mortgage loan.

‘‘Outside Serviced Loan Combination’’ has the meaning assigned to that term under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—General’’ in this prospectus supplement.

‘‘Outside Serviced Trust Mortgage Loan’’ has the meaning assigned to that term under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—General’’ in this prospectus supplement.

‘‘P&I’’ means principal and/or interest.

‘‘Pari Passu Non-Trust Loan’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—Loan Combinations—General’’ in this prospectus supplement. The 1211 Avenue of the Americas Non-Trust Loan and the Extendicare Non-Trust Loan are the Pari Passu Non-Trust Loans.

‘‘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 Internal Revenue Code.

‘‘Permitted Encumbrances’’ means, with respect to any mortgaged real property securing a mortgage loan in the trust, any and all of the following:

•  liens for real estate taxes, water charges, sewer rents and assessments not yet due and payable,
•  covenants, conditions and restrictions, rights of way, easements and other matters that are of public record or that are omitted as exceptions in the related lender’s title insurance policy (or, if not yet issued, omitted as exceptions in a fully binding pro forma title policy or title policy commitment),
•  the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related mortgaged real property,
•  condominium declarations of record and identified in the related lender’s title insurance policy (or, if not yet issued, identified in a pro forma title policy or title policy commitment), and
•  if the subject loan is a cross-collateralized mortgage loan, the lien of the mortgage instrument for any other mortgage loan in the trust with which the subject mortgage loan is cross-collateralized.

‘‘Permitted Investments’’ means U.S. government securities and other investment grade obligations specified in the series 2006-C7 pooling and servicing agreement.

‘‘Plan’’ means any ERISA Plan or any other employee benefit or retirement plan, arrangement or account, including any individual retirement account or Keogh plan, that is subject to section 4975 of the Internal Revenue Code.

‘‘Plan Asset Regulations’’ means the regulations of the U.S. Department of Labor promulgated under ERISA.

‘‘Post-ARD Additional Interest’’ means, with respect to any ARD Loan, the additional interest accrued with respect to that mortgage loan as a result of the marginal increase in the related mortgage

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interest rate upon passage of the related anticipated repayment date, as that additional interest may compound in accordance with the terms of that mortgage loan.

‘‘Prepayment Interest Excess’’ means, with respect to any full or partial prepayment of an underlying mortgage loan made by the related borrower or otherwise received in connection with a casualty or condemnation, 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 to the date of prepayment, less the amount of related master servicing fees (and, in the case of an Outside Serviced Trust Mortgage Loan, comparable servicing fees under the governing servicing agreement) payable from that interest collection, and exclusive of any Default Interest and Post-ARD Additional Interest included in that interest collection.

‘‘Prepayment Interest Shortfall’’ means, with respect to any full or partial prepayment of an underlying mortgage loan made by the related borrower or otherwise received in connection with a casualty or condemnation, 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 from the date of prepayment to but not including that due date, less the amount of related master servicing fees (and, in the case of an Outside Serviced Trust Mortgage Loan, comparable servicing fees under the governing servicing agreement) that would have been payable from that uncollected interest, and exclusive of any portion of that uncollected interest that would have represented Default Interest or Post-ARD Additional Interest.

‘‘Prepayment Provisions’’ means, with respect to any underlying mortgage loan, the type and duration of any indicated prepayment provision. The number in any parenthetical reflects the number of calendar months in the applicable period during which the subject prepayment provision is in effect, with any partial calendar month being calculated as a full calendar month, commencing with the calendar month in which the origination date occurred and ending in the calendar month in which the prepayment period terminates. For example, an underlying mortgage loan that was originated on February 17, 2006 and is in a lockout period through February 16, 2007 has a total lockout period consisting of 13 months.

‘‘PTCE’’ means prohibited transaction class exemption.

‘‘PTE’’ means prohibited transaction exemption.

‘‘Realized Losses’’ mean losses on or with respect to the underlying mortgage loans arising from the inability to collect all amounts due and owing under those mortgage loans, including by reason of the fraud or bankruptcy of a borrower or, to the extent not covered by insurance, a casualty of any nature at a mortgaged real property. We discuss the calculation of Realized Losses under ‘‘Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses’’ in this prospectus supplement.

‘‘Recovered Amount’’ has the meaning assigned to that term in the definition of ‘‘Total Principal Distribution Amount’’ below in this glossary.

‘‘Relevant Implementation Date’’ has the meaning assigned to that term under ‘‘Method of Distribution’’ in this prospectus supplement.

‘‘Relevant Member State’’ has the meaning assigned to that term under ‘‘Method of Distribution’’ in this prospectus supplement.

‘‘Remaining Amortization Term’’ means, with respect to each mortgage loan in the trust, the number of months remaining from the cut-off date to the month in which that mortgage loan would fully amortize in accordance with its amortization schedule, without regard to any balloon payment that may be due and assuming no prepayments of principal and no defaults.

‘‘Remaining Interest-Only Period’’ means, with respect to any mortgage loan in the trust, the period, if any, following the cut-off date during which scheduled payments of interest only are required.

‘‘Remaining Term to Maturity’’ means, with respect to each mortgage loan in the trust, the number of months remaining to maturity or, in the case of an ARD Loan, to the anticipated repayment date.

‘‘REMIC’’ means a real estate mortgage investment conduit as defined in section 860D of the Internal Revenue Code.

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‘‘REO Property’’ means any mortgaged real property or interest therein that is acquired by or on behalf of the trust through foreclosure, deed-in-lieu of foreclosure or otherwise following a default on the corresponding underlying mortgage loan.

‘‘Replacement Reserve’’ means, with respect to any mortgage loan in the trust, funded reserves escrowed for ongoing items such as repairs and replacements, including, in the case of hospitality properties, reserves for furniture, fixtures and equipment. In some cases, however, the reserve will be subject to a maximum amount, and once that maximum amount is reached, the reserve will not thereafter be funded, except to the extent it is drawn upon.

‘‘Republic Portfolio Borrower’’ means the borrower under the Republic Portfolio Mortgage Loan, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Republic Portfolio Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Republic Portfolio Mortgage Loan’’ means the underlying mortgage loan secured by the Republic Portfolio Mortgaged Property.

‘‘Republic Portfolio Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Republic Portfolio.

‘‘Reston Town Center Borrower’’ means the borrower under the Reston Town Center Loan Combination, as identified under ‘‘Description of the Mortgage Pool—Significant Underlying Mortgage Loans—The Reston Town Center Mortgage Loan—The Borrower and Sponsor’’ in this prospectus supplement.

‘‘Reston Town Center Co-Lender Agreement’’ means the Co-Lender Agreement for the Reston Town Center Loan Combination.

‘‘Reston Town Center Loan Combination’’ means, together, the Reston Town Center Mortgage Loan and the Reston Town Center Non-Trust Loan.

‘‘Reston Town Center Mortgage Loan’’ means the underlying mortgage loan secured by the Reston Town Center Mortgaged Property.

‘‘Reston Town Center Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Reston Town Center.

‘‘Reston Town Center Non-Trust Loan’’ means the Non-Trust Loan secured by the Reston Town Center Mortgaged Property that is evidenced by a promissory note designated as note B.

‘‘Reston Town Center Non-Trust Loan Noteholder’’ means the holder of the promissory note for the Reston Town Center Non-Trust Loan.

‘‘Restricted Group’’ means, collectively—

1.  the trustee,
2.  the Exemption-Favored Parties,
3.  us,
4.  the master servicer,
5.  the special servicer,
6.  any sub-servicers,
7.  any party having servicing responsibilities with respect to an Outside Serviced Trust Mortgage Loan or any related REO Property;
8.  the mortgage loan sellers,
9.  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 Issue Date, and
10.  any and all affiliates of any of the aforementioned persons.

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‘‘REVPAR’’ means, with respect to any hospitality property, revenues per available room.

‘‘S&P’’ means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

‘‘SEC’’ means the Securities and Exchange Commission.

‘‘Securities Act’’ means the Securities Act of 1933, as amended.

‘‘Senior Non-Trust Loan’’ has the meaning assigned to that term under ‘‘Description of the Mortgage Pool—Loan Combinations—General’’ in this prospectus supplement. Each of the Triangle Town Center Senior Non-Trust Loans are Senior Non-Trust Loans.

‘‘Series 2006-C1 Securitization’’ means the securitization that includes the Triangle Town Center Note A Senior Non-Trust Loan, and in connection with which the LB-UBS Commercial Mortgage Trust 2006-C1, Commercial Mortgage Pass-Through Certificates, Series 2006-C1, were issued.

‘‘Series 2006-C6 Securitization’’ means the securitization that includes the 1211 Avenue of the Americas Non-Trust Loan, and in connection with which the LB-UBS Commercial Mortgage Trust 2006-C6, Commercial Mortgage Pass-Through Certificates, Series 2006-C6, were issued.

‘‘Serviced Loan Combination’’ has the meaning assigned to that term under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—General’’ in this prospectus supplement.

‘‘Serviced Non-Trust Loan’’ has the meaning assigned to that term under ‘‘The Series 2006-C7 Pooling and Servicing Agreement—General’’ in this prospectus supplement.

‘‘Serviced Non-Trust Loan Noteholder’’ means the holder of a promissory note for a Serviced Non-Trust Loan.

‘‘Servicing File’’ means, in general, with respect to each underlying mortgage loan (other than an Outside Serviced Trust Mortgage Loan), to the extent obtained in connection with such underlying mortgage loan, the following documents: copies of any final appraisal, final survey, final engineering report, final environmental report, opinion letters of counsel to a related borrower delivered in connection with the closing of that mortgage loan, escrow agreements, reserve agreements, organizational documentation for the related borrower, the related guarantor or the related indemnitor (if the related guarantor or indemnitor is an entity), insurance certificates or insurance review reports, leases for tenants representing 10% or more of the annual income with respect to the related mortgaged real property, final seismic report and property management agreements, rent roll, property operating statement and financial statements for the related guarantor or indemnitor, cash management or lockbox agreement and zoning letters or zoning reports.

‘‘Servicing Standard’’ means, with respect to either the master servicer or the special servicer, to service and administer, for the benefit of the series 2006-C7 certificateholders (or, with respect to a Serviced Loan Combination, for the benefit of the series 2006-C7 certificateholders and the related Serviced Non-Trust Loan Noteholder(s)), those mortgage loans and any REO Properties that such party is obligated to service and administer under the series 2006-C7 pooling and servicing agreement:

•  in accordance with the higher of the following standards of care—
1.  the same manner in which, and with the same care, skill, prudence and diligence with which, the master servicer or the special servicer, as the case may be, services and administers comparable mortgage loans with similar borrowers and comparable foreclosure properties for other third-party portfolios, giving due consideration to the customary and usual standards of practice of prudent institutional commercial mortgage lenders servicing their own mortgage loans and foreclosure properties, and
2.  the same manner in which, and with the same care, skill, prudence and diligence with which, the master servicer or special servicer, as the case may be, services and administers comparable mortgage loans and foreclosure properties owned by the master servicer or special servicer, as the case may be,

in either case exercising reasonable business judgment and acting in accordance with applicable law, the terms of the series 2006-C7 pooling and servicing agreement and the terms of the respective subject mortgage loans and any applicable co-lender, intercreditor and/or similar agreements;

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•  with a view to—
1.  the timely recovery of all payments of principal and interest, including balloon payments, under those mortgage loans, or
2.  in the case of (a) a specially serviced mortgage loan or (b) a mortgage loan as to which the related mortgaged real property has become an REO Property, the maximization of recovery on that mortgage loan to the series 2006-C7 certificateholders (as a collective whole) (or, if a Serviced Loan Combination is involved, with a view to the maximization of recovery on the subject Loan Combination to the series 2006-C7 certificateholders and the related Serviced Non-Trust Loan Noteholder(s) (as a collective whole)) of principal and interest, including balloon payments, on a present value basis; and
•  without regard to—
1.  any relationship, including as lender on any other debt (including mezzanine debt or a Serviced Non-Trust Loan), that the master servicer or the special servicer, as the case may be, or any affiliate thereof, may have with any of the underlying borrowers, or any affiliate thereof, or any other party to the series 2006-C7 pooling and servicing agreement,
2.  the ownership by the master servicer or the special servicer, as the case may be, or any affiliate thereof of any series 2006-C7 certificate or any interest in a Serviced Non-Trust Loan,
3.  the obligation of the master servicer or the special servicer, as the case may be, to make advances,
4.  the right of the master servicer or the special servicer, as the case may be, or any affiliate of either of them, to receive compensation or reimbursement of costs under the series 2006-C7 pooling and servicing agreement generally or with respect to any particular transaction, and
5.  the ownership, servicing or management for others of any mortgage loan or real property not subject to the series 2006-C7 pooling and servicing agreement by the master servicer or the special servicer, as the case may be, or any affiliate thereof.

With the 1211 Avenue of the Americas Mortgage Loan, which is being serviced under the series 2006-C6 pooling and servicing agreement, and the Triangle Town Center Subordinate Tranche Mortgage Loan, which is being serviced under the series 2006-C1 pooling and servicing agreement, the applicable governing servicing agreement in each case provides for a servicing standard which is substantially similar to the foregoing.

‘‘Servicing Transfer Event’’ means, with respect to any mortgage loan being serviced under the series 2006-C7 pooling and servicing agreement, any of the following events:

1.  the related borrower (or any related guarantor) fails to make when due any scheduled debt service payment, including a balloon payment, and the failure actually continues, or the master servicer determines that it will continue, or the special servicer (with the consent of the series 2006-C7 controlling class representative) determines that it will continue, unremedied (without regard to any grace period)—
(a)  except in the case of a delinquent balloon payment, for 60 days beyond the date the subject payment was due, or
(b)  solely in the case of a delinquent balloon payment, for one business day after the subject balloon payment was due or, in certain circumstances involving the delivery of a refinancing commitment prior to the related maturity date, for 30 days beyond the date on which that balloon payment was due (or for such shorter period ending on the date on which it is determined that the refinancing could not reasonably be expected to occur)
2.  a default (other than as described in clause 1. of this definition, and other than as a result of a failure by the borrower to maintain all-risk casualty insurance or other insurance with respect to a mortgaged real property that covers acts of terrorism provided that the special servicer has

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  determined (subject to any required consent of the series 2006-C7 controlling class representative or the related Loan Combination Controlling Party, in each case if and as applicable) that such insurance (a) is not available at commercially reasonable rates and such hazards are not commonly insured against at the time for properties similar to the subject mortgaged real property and located in and around the region in which the subject mortgaged real property is located or (b) is not available at any rate) occurs under the mortgage loan that the master servicer or the special servicer has determined, in accordance with the Servicing Standard, materially impairs the value of the corresponding mortgaged real property as security for the mortgage loan or otherwise materially adversely affects the interests of series 2006-C7 certificateholders or, in the case of a Serviced Non-Trust Loan, the interests of the related Serviced Non-Trust Loan Noteholder, and the default continues unremedied for either (i) one business day (but only if the subject default gives rise to immediate acceleration without application of a cure period under the terms of the mortgage loan) or (ii) otherwise, the greater of (A) the applicable cure period under the terms of the mortgage loan and (B) 30 days; provided that any default requiring a servicing advance will be deemed to materially and adversely affect the interests of the series 2006-C7 certificateholders or, in the case of a Serviced Non-Trust Loan, the interests of the related Serviced Non-Trust Loan Noteholder;
3.  the master servicer determines, or the special servicer (with the consent of the series 2006-C7 controlling class representative) determines, in each case in accordance with the Servicing Standard, that (a) a default in the making of a monthly debt service payment, including a balloon payment, is likely to occur and the default is likely to remain unremedied (without regard to any grace period) for at least the applicable period contemplated in clause 1. of this definition or (b) a default (other than as described in clause 1. of this definition, and other than as a result of a failure by the borrower to maintain all-risk casualty insurance or other insurance with respect to a mortgaged real property that covers acts of terrorism provided that the special servicer has determined that such insurance (i) is not available at commercially reasonable rates and such hazards are not commonly insured against at the time for properties similar to the subject mortgaged real property and located in and around the region in which the subject mortgaged real property is located or (ii) is not available at any rate) is likely to occur under the mortgage loan that will materially impair the value of the corresponding mortgaged real property as security for the mortgage loan or otherwise materially adversely affect the interests of series 2006-C7 certificateholders or, in the case of a Serviced Non-Trust Loan, the interests of the related Serviced Non-Trust Loan Noteholder and the default is likely to remain unremedied for at least the applicable period contemplated in clause 2. of this definition;
4.  various events of bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities, or similar proceedings occur with respect to the related borrower or the corresponding mortgaged real property, or the related borrower takes various actions indicating its bankruptcy, insolvency or inability to pay its obligations; or
5.  the master servicer receives notice of the commencement of foreclosure or similar proceedings with respect to the corresponding mortgaged real property.

A Servicing Transfer Event will cease to exist, if and when:

•  with respect to the circumstances described in clause 1. of this definition, the related borrower makes three consecutive full and timely monthly debt service payments under the terms of the mortgage loan, as those terms may be changed or modified in connection with a bankruptcy or similar proceeding involving the related borrower or by reason of a modification, extension, waiver or amendment granted or agreed to by the master servicer or the special servicer;
•  with respect to the circumstances described in clause 2. of this definition, the default is cured in the judgment of the special servicer;
•  with respect to the circumstances described in clauses 3. and 4. of this definition, those circumstances cease to exist in the judgment of the special servicer, but, with respect to any bankruptcy or insolvency proceedings contemplated by clause 4., no later than the entry of an order or decree dismissing the proceeding; and

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•  with respect to the circumstances described in clause 5. of this definition, the proceedings are terminated.

If a Servicing Transfer Event exists with respect to one mortgage loan in a Loan Combination, it will also be considered to exist for the other mortgage loans in that Loan Combination, provided that, if a Serviced Non-Trust Loan Noteholder prevents the occurrence of a Servicing Transfer Event with respect to the related mortgage loan in the trust through the exercise of cure rights as set forth in the related Co-Lender Agreement, then the existence of such Servicing Transfer Event with respect to the related Serviced Non-Trust Loan will not, in and of itself, result in the existence of a Servicing Transfer Event with respect to the related mortgage loan in the trust, or the transfer to special servicing of the applicable Loan Combination, unless a separate Servicing Transfer Event has occurred with respect thereto.

The 1211 Avenue of the Americas Mortgage Loan is not being serviced under the series 2006-C7 pooling and servicing agreement, and the servicing transfer events or the equivalent with respect thereto under the series 2006-C6 pooling and servicing agreement (which governs the servicing of the 1211 Avenue of the Americas Loan Combination) will be similar, but may not be identical, to the foregoing, including with respect to the provisions described in the preceding paragraph relating to limited automatic servicing transfer events with respect to all of the mortgage loans comprising that Loan Combination.

Furthermore, the Triangle Town Center Subordinate Tranche Mortgage Loan is not being serviced under the series 2006-C7 pooling and servicing agreement, and the servicing transfer events or the equivalent with respect thereto under the series 2006-C1 pooling and servicing agreement (which governs the servicing of the Triangle Town Center Loan Combination) will be similar, but may not be identical, to the foregoing, including with respect to the provisions described in the second preceding paragraph relating to limited automatic servicing transfer events with respect to all of the mortgage loans comprising that Loan Combination.

‘‘SF’’ means square feet.

‘‘Shadow’’ means, with respect to any mortgaged real property used for retail purposes, a store or other business that materially affects the draw of customers to that property, but which may be located at a nearby property or on a portion of that property that does not constitute security for the related mortgage loan in the trust.

‘‘Shadow Rating’’ means that it has been confirmed to us by S&P and Fitch that the subject underlying mortgage loan has, in the context of its inclusion in the trust, credit characteristics consistent with the specified ratings.

‘‘SMMEA’’ means the Secondary Mortgage Market Enhancement Act of 1984, as amended.

‘‘Stated Principal Balance’’ means, for each mortgage loan in the trust, an amount that:

•  will initially equal its cut-off date principal balance; and
•  will be permanently reduced on each 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 (without regard to any reduction in, or addition to, that Total Principal Distribution Amount contemplated by the second paragraph and/or third paragraph of the definition of ‘‘Total Principal Distribution Amount’’ below in this glossary), and
2.  the principal portion of any Realized Loss incurred with respect to that mortgage loan during the related collection period in connection with a final liquidation or a forgiveness of debt.

However, the ‘‘Stated Principal Balance’’ of an underlying mortgage loan will, in all cases, be zero as of the first distribution date following the end of the collection period in which it is determined that all amounts ultimately collectable with respect to the mortgage loan or any related REO Property have been received.

‘‘Subordinate Non-Trust Loan’’ has the meaning assigned to such term under ‘‘Description of the Mortgage Pool—Loan Combinations—General’’ in this prospectus supplement.

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‘‘Subordinate Trust Loan’’ means the Triangle Town Center Subordinate Tranche Mortgage Loan.

‘‘Subordinate Serviced Non-Trust Loan’’ means any Serviced Non-Trust Loan that is a Subordinate Non-Trust Loan.

‘‘TI/LC’’ means tenant improvements and leasing commissions.

‘‘TI/LC Reserve’’ means, with respect to any mortgage loan in the trust, funded reserves escrowed for tenant improvement allowances and leasing commissions. In certain cases, however, the reserve will be subject to a maximum amount, and once that maximum amount is reached, the reserve will not thereafter be funded, except to the extent it is drawn upon. With respect to the Outside Serviced Trust Mortgage Loan, the foregoing reserves are collected and held by a servicer under the applicable governing servicing agreement.

‘‘Total Expenses’’ and ‘‘U/W Total Expenses’’ each means, for any mortgaged real property securing a mortgage loan in the trust, all operating expenses associated with that property, including utilities, administrative expenses, repairs and maintenance, management fees, advertising costs, insurance premiums, real estate taxes and ground lease payments.

In determining ‘‘Total Expenses’’ for each mortgaged real property, the related originator generally relied on full-year or year-to-date financial statements, rolling 12-month operating statements and/or year-to-date financial statements supplied by the related borrower, except that:

•  if tax or insurance expense information more current than that reflected in the financial statements was available, the newer information was generally used; and
•  property management fees were generally assumed to be 1.0% to 6.0% (depending on the property) of effective gross revenue (or, in the case of a hospitality property, gross receipts), except that, in some cases, property management fees were assumed to be capped at $1,000,000.

There is no assurance that the foregoing assumptions made with respect to any subject underlying mortgage loan will, in fact be consistent with actual property performance. Actual annual total expenses for a mortgaged property may be more than the Total Expenses presented with respect to that property in this prospectus supplement.

For more detailed information regarding the Total Expenses with respect to specific underlying mortgage loans and/or the related mortgaged real properties, you should review Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans and the footnotes thereto.

‘‘Total Principal Distribution Amount’’ means, for any distribution date, an amount equal to the total, without duplication, of the following:

•  all payments of principal, including voluntary principal prepayments, received by or on behalf of the trust on the underlying mortgage loans during the related collection period, in each case exclusive of any portion of the particular payment 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 cut-off date or on a due date subsequent to the end of the related collection period;
•  all monthly payments of principal received by or on behalf of the trust on the underlying mortgage loans prior to, but that are due during, the related collection period;
•  all other collections, including Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds, that were received by or on behalf of the trust on or with respect to any of the underlying mortgage loans 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 underlying mortgage loan or, in the case of an REO Property, of the related underlying mortgage loan, in each case exclusive of any portion of the particular collection that represents a late collection of principal due on or before the cut-off date or for which an advance of principal was previously made for a prior distribution date; and
•  all advances of principal made with respect to the underlying mortgage loans for that distribution date.

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Notwithstanding the foregoing, if the master servicer, the special 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 (together with accrued interest thereon), then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed out of payments and other collections of principal on the underlying mortgage loans otherwise distributable on the series 2006-C7 principal balance certificates (with a corresponding reduction in the applicable Total Principal Distribution Amount), prior to being deemed reimbursed out of payments and other collections of interest on the underlying mortgage loans otherwise distributable on the series 2006-C7 certificates. As a result, the Total Principal Distribution Amount for the corresponding distribution date would be reduced, to not less than zero, by the amount of any such reimbursement. In addition, if payments and other collections of principal on the mortgage pool are applied to reimburse, or pay interest on, any advance that is determined to be nonrecoverable from collections on the related underlying mortgage loan, as described in the prior sentence, then that advance will be reimbursed, and/or interest thereon will be paid, first out of payments or other collections of principal on the loan group that includes the subject underlying mortgage loan as to which the advance was made, and prior to using payments or other collections of principal on the other loan group.

If any advance is considered to be nonrecoverable from collections on the related underlying mortgage loan and is, therefore, reimbursed out of payments and other collections of principal with respect to the entire mortgage pool as described in the preceding paragraph, and if there is a subsequent recovery of that item, the amount of that recovered item (a ‘‘Recovered Amount’’) would generally be included as part of the Total Principal Distribution Amount for the distribution date following the collection period in which that recovered item was received. In addition, if and to the extent that any advance is determined to be nonrecoverable from collections on the related underlying mortgage loan and, therefore, interest on such advance is paid out of general principal collections on the mortgage pool, and if interest on such advance is subsequently reimbursed to the trust out of Default Interest, late payment charges or any other amounts collected on the underlying mortgage loan as to which such advance was made, then an amount equal to that portion of such Default Interest, late payment charge or other amount that was applied to reimburse the trust for interest on such advance (also, a ‘‘Recovered Amount’’) would generally be included as part of the Total Principal Distribution Amount for the distribution date following the collection period in which that Default Interest, late payment charge or other amount was received. For purposes of determining the respective portions of the Total Principal Distribution Amount attributable to each loan group, those Recovered Amounts will be deemed allocated to offset the corresponding prior reductions in amounts attributable to each loan group in reverse order to that set forth in the last sentence of the prior paragraph.

The Total Principal Distribution Amount will not include any payments or other collections of principal with respect to any Non-Trust Loan.

‘‘TRIA’’ means the Terrorism Risk Insurance Extension Act of 2005, signed into law by President Bush on December 22, 2005.

‘‘Triangle Town Center Co-Lender Agreement’’ means the Co-Lender Agreement for the Triangle Town Center Loan Combination.

‘‘Triangle Town Center Loan Combination’’ means, collectively, the Triangle Town Center Subordinate Tranche Mortgage Loan and the Triangle Town Center Senior Non-Trust Loans.

‘‘Triangle Town Center Subordinate Tranche Mortgage Loan’’ means the underlying mortgage loan secured by the Triangle Town Center Subordinate Tranche Mortgaged Property.

‘‘Triangle Town Center Subordinate Tranche Mortgaged Property’’ means the mortgaged real property identified on Annex A-1 to this prospectus supplement as Triangle Town Center Subordinate Tranche.

‘‘Triangle Town Center Note A Senior Non-Trust Loan’’ means the Triangle Town Center Senior Non-Trust Loan evidenced by a promissory note designated as note A1.

‘‘Triangle Town Center Note B-1 Senior Non-Trust Loan’’ means the Triangle Town Center Senior Non-Trust Loan evidenced by a promissory note designated as note B-1.

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‘‘Triangle Town Center Senior Non-Trust Loans’’ means the two (2) senior Non-Trust Loans secured by the Triangle Town Center Subordinate Tranche Mortgaged Property.

‘‘UBS,’’ as referred to under the ‘‘Loan Seller’’ column on Annex A-1 hereto, means UBSREI or any affiliate of UBSREI.

‘‘UBS Mortgage Loan’’ means each mortgage loan that was acquired by us from the UBS Mortgage Loan Seller for inclusion in the trust.

‘‘UBS Mortgage Loan Seller’’ and ‘‘UBSREI’’ each means UBS Real Estate Investments Inc.

‘‘Underwriter Exemption’’ means Prohibited Transaction Exemption 91-14, as amended to date, including by Prohibited Transaction Exemption 2000-58 and Prohibited Transaction Exemption 2002-41, as described under ‘‘ERISA Considerations’’ in this prospectus supplement.

‘‘Underwriting Reserves’’ means, with respect to any mortgage loan in the trust, estimated annual capital costs, as used by the related originator in determining Net Cash Flow.

‘‘Underwritten Debt Service Coverage Ratio,’’ ‘‘DSCR Net Cash Flow’’ and ‘‘U/W NCF DSCR’’ each means, with respect to any mortgage loan in the trust (except as otherwise described below), the ratio of—

•  the Net Cash Flow for the related mortgaged real property or properties (without regard to any mortgaged real property or properties that are collateral for the subject underlying mortgage loan solely by reason of cross-collateralization with another mortgage loan), to
•  twelve times the amount of monthly debt service that will be payable under the subject mortgage loan commencing on the first due date after the cut-off date or, if the subject mortgage loan is currently in an initial interest-only period, on the first due date after the commencement of the scheduled amortization.

Notwithstanding the foregoing, the calculation of Underwritten Debt Service Coverage Ratio for the following mortgage loans that we intend to include in the trust will take into account the adjustments described below:

•  with respect to the 1211 Avenue of the Americas Mortgage Loan, the amount described in the second bullet of the preceding paragraph is based on monthly debt service payments for the entire 1211 Avenue of the Americas Loan Combination, including the 1211 Avenue of the Americas Mortgage Loan and the 1211 Avenue of the Americas Non-Trust Loan;
•  with respect to the Extendicare Portfolio Mortgage Loan, the amount described in the second bullet of the preceding paragraph is based on monthly debt service payments for the entire Extendicare Portfolio Loan Combination, including the Extendicare Portfolio Mortgage Loan and the Extendicare Portfolio Non-Trust Loan;
•  with respect to the Triangle Town Center Subordinate Tranche Mortgage Loan, unless the context clearly indicates otherwise, the amount described in the second bullet of the preceding sentence of the preceding paragraph is based on the monthly debt service payments for entire Triangle Town Center Subordinate Tranche Loan Combination, including the Triangle Town Center Subordinate Tranche Mortgage Loan and both of the Triangle Town Center Senior Non-Trust Loans (see ‘‘Description of the Mortgage Pool—Loan Combinations’’ in this prospectus supplement);
•  in the case of any mortgage loan that provides for payments of interest only until the related stated maturity date or anticipated repayment date, the amount described in the second bullet of the preceding paragraph is based upon the actual interest-only payments (calculated in accordance with the related loan documents) due with respect to the subject mortgage loan during the 12-month period following the cut-off date; and

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•  in the case of each underlying mortgage loan that requires the related borrower to make additional monthly amortization payments solely to the extent available from excess cash flow after a certain date, the calculation of underwritten debt service coverage ratio is based upon interest only payments (calculated in accordance with the related loan documents) that will be due in respect of the subject mortgage loan during the 12-month period following the cut-off date.

Unless the context clearly indicates otherwise, the Underwritten Debt Service Coverage Ratio for an underlying mortgage loan that is part of a Loan Combination does not take into account any related Subordinate Non-Trust Loan.

In the case of some of the underlying mortgage loans, the calculation of Underwritten Debt Service Coverage Ratio, DSCR Net Cash Flow and U/W NCF DSCR for the related mortgaged real property or properties was based on assumptions regarding projected rental income, annual net cash flow and/or occupancy, including one or more of the following:

•  the assumption that a particular tenant at the subject mortgaged real property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged real property or is out for signature will be executed and in place on a future date;
•  the assumption that a portion of the currently vacant and unleased space at the subject mortgaged real property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market;
•  the assumption that certain rental income that is to be payable commencing on a future date under a signed lease but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy will be paid commencing on such future date;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged real property;
•  certain additional lease-up assumptions as may be described in the footnotes to Annex A-1 to this prospectus supplement; and
•  certain other assumptions regarding the payment of rent not currently being paid.

There is no assurance that the foregoing assumptions made with respect to any subject underlying mortgage loan will, in fact, be consistent with actual property performance and, in such event, actual annual net cash flow for a mortgaged property may be less than the underwritten annual net cash flow presented with respect to that property in this prospectus supplement.

For more detailed information regarding the Underwritten Debt Service Coverage Ratio, DSCR Net Cash Flow and U/W NCF DSCR with respect to specific underlying mortgage loans and/or the related mortgaged real properties, you should review Annex A-1—Certain Characteristics of Individual Underlying Mortgage Loans and the footnotes thereto.

‘‘United States 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

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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.

‘‘U/W EGI’’ has the same meaning as Effective Gross Income.

‘‘U/W NCF’’ has the same meaning as Net Cash Flow.

‘‘U/W NCF DSCR’’ has the same meaning as Underwritten Debt Service Coverage Ratio.

‘‘U/W Net Cash Flow’’ has the same meaning as Net Cash Flow.

‘‘U/W Net Operating Income’’ has the same meaning as Net Operating Income.

‘‘U/W NOI’’ has the same meaning as Net Operating Income.

‘‘U/W Total Expenses’’ has the same meaning as Total Expenses.

‘‘Weighted Average Pool Pass-Through Rate’’ means, for each interest accrual period, the weighted average of the respective Net Mortgage Pass-Through Rates for all of the underlying mortgage loans for the related distribution date, weighted on the basis of those mortgage loans’ respective Stated Principal Balances immediately prior to the related distribution date.

‘‘Year Built’’ means the year that a mortgaged real property was originally constructed. With respect to any mortgaged real property that was constructed in phases, ‘‘Year Built’’ refers to the year that the first phase was originally constructed.

‘‘Year Renovated’’ means the year that a mortgaged real property was most recently renovated in a substantial manner.

‘‘YM(y)’’ means, with respect to any mortgage loan in the trust, a period of y months during which prepayments of principal are permitted, but must be accompanied by a yield maintenance charge calculated pursuant to a yield maintenance formula.

‘‘YM(x) % (y)’’ means, with respect to any mortgage loan in the trust, a period of y months during which prepayments of principal are permitted, but must be accompanied by a yield maintenance charge equal to the greater of an amount calculated pursuant to a yield maintenance formula and x% of the principal amount prepaid.

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ANNEX A-1

CERTAIN CHARACTERISTICS OF INDIVIDUAL UNDERLYING MORTGAGE LOANS







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LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7

ITALICS Indicate Loans Secured by Multiple Properties

Capitalized terms used on this Annex A-1 have the same meanings assigned thereto
in the Glossary to the accompanying Offering Prospectus



CONTROL  FOOTNOTE  GROUP
  NO.       NO.      NO.  LOAN SELLER                   PROPERTY NAME
-------------------------------------------------------------------------------------

    1       (1)      1        LB       520 Madison Avenue
    2       (2)      1        LB       1211 Avenue of the Americas
    3       (3)      1        LB       Extendicare Portfolio
   3A1               1        LB       Valley Manor Nursing & Rehabilitation Center
   3A2               1        LB       Elkins Crest Health & Rehabilitation Center
   3A3               1        LB       Cedar Springs Health & Rehab Center
   3A4               1        LB       Tremont Health and Rehabilitation Center
   3A5               1        LB       Willowcrest Care Center
   3A6               1        LB       Ironwood Health & Rehab. Center
   3A7               1        LB       Beaver Valley Nursing & Rehabilitation Center
   3A8               1        LB       Hospitality Nursing & Rehab. Center
   3A9               1        LB       Bon Harbor Nursing & Rehab Center
  3A10               1        LB       River's Bend Health & Rehab
  3A11               1        LB       Woodcrest Manor Care Center
  3A12               1        LB       Arbors at Milford
  3A13               1        LB       Spruce Manor Nursing & Rehabilitation Center
  3A14               1        LB       Belair Health & Rehabilitation Center
  3A15               1        LB       Arbors at New Castle Subacute & Rehab Center
  3A16               1        LB       Canterbury Nursing
  3A17               1        LB       Arbors at Fairmont
  3A18               1        LB       Slate Belt Nursing
  3A19               1        LB       Dresher Hill Health and Rehabilitation Center
  3A20               1        LB       Irvine Health & Rehab. Center
  3A21               1        LB       Evergreen Nursing & Rehab. Center
  3A22               1        LB       Puget Sound Healthcare Center
  3A23               1        LB       Salyersville Health Care Center
  3A24               1        LB       Meadow View Health & Rehab. Center
  3A25               1        LB       The Gardens on University
  3A26               1        LB       Sunrise Manor Nursing & Rehab. Center
  3A27               1        LB       Forest Ridge Health & Rehab. Center
  3A28               1        LB       Aldercrest Health & Rehab Center
  3A29               1        LB       Crestwood Convalescent Center
  3A30               1        LB       Northwood Nursing & Rehabilitation Center
  3A31               1        LB       Bremerton Health & Rehab Center
  3A32               1        LB       Texas Terrace Care Center
  3A33               1        LB       Morningside Health Center
  3A34               1        LB       Sheboygan Progressive Care Center
  3A35               1        LB       Cypress Grove Rehab. Center
  3A36               1        LB       Franklin Hills Health & Rehab Center
  3A37               1        LB       Medco Center of Paducah
  3A38               1        LB       Columbus Rehab & Subacute Institute
  3A39               1        LB       Morganfield Nursing & Rehab.
  3A40               1        LB       Westpark Rehab. Center
  3A41               1        LB       Kenwood House
  3A42               1        LB       Park Health & Rehab. Center
  3A43               1        LB       Rockmill Rehab. Centre
  3A44               1        LB       Arbors at Fairlawn
  3A45               1        LB       Arbors West
  3A46               1        LB       LaCrosse Health & Rehab. Center
  3A47               1        LB       Medco Center of Brandenburg
  3A48               1        LB       Riverside Nursing & Rehab. Center
  3A49               1        LB       Mount Vernon Nursing & Rehab. Center
  3A50               1        LB       Medco Center of Campbellsville
  3A51               1        LB       Woodsfield Nursing & Rehab. Center
  3A52               1        LB       Richfield Health Center
  3A53               1        LB       Madison Manor
  3A54               1        LB       Fordsville Nursing & Rehab. Center
  3A55               1        LB       Medco Center of Hardinsburg
  3A56               1        LB       Abington Crest Nursing & Rehabilitation Center
  3A57               1        LB       Arbors at Dayton Nursing & Subacute Center
  3A58               1        LB       Todd-Dickey Nursing & Rehab. Center
  3A59               1        LB       American Heritage Care Center
  3A60               1        LB       Springfield Nursing and Rehabilitation Center
  3A61               1        LB       Weyauwega Health Care Center
  3A62               1        LB       Heritage Nursing & Rehab. Center
  3A63               1        LB       Ivy Court
  3A64               1        LB       Arbors at London
  3A65               1        LB       Medco Center of Bowling Green
  3A66               1        LB       Crystal River Nursing & Rehab. Center
  3A67               1        LB       Scott Villa Nursing & Rehabilitation Center
  3A68               1        LB       Rocksprings Rehab. Center
  3A69               1        LB       Kittitas Valley Health & Rehab. Center
  3A70               1        LB       Cornell Area Care Center
  3A71               1        LB       Medco Center of Franklin
  3A72               1        LB       Medco Health & Rehab. Center
  3A73               1        LB       Eastgate Manor Nursing & Rehab. Center
  3A74               1        LB       Rose Of Sharon Manor
  3A75               1        LB       Pembroke Nursing & Rehab. Center
  3A76               1        LB       Shady Lawn Nursing Home
  3A77               1        LB       Parkview Nursing Center
  3A78               1        LB       Professional Care Rehab Center
  3A79               1        LB       Elizabethtown Nursing & Rehab. Center
  3A80               1        LB       Elkhart Rehab. Center
  3A81               1        LB       Prairie Village Nursing & Rehabilitation Center
  3A82               1        LB       Ridgewood Nursing & Rehab. Center
    4       (4)      1        LB       Reston Town Center
    5       (5)      1        LB       Colony Square
    6                1        Key      Republic Portfolio
   6A1               1        Key      The Campus at Dulles Technology Center
   6A2               1        Key      Dulles Park Technology Center
    7       (6)      1        UBS      Government Property Advisors Portfolio
   7A1               1        UBS      1781 McKees Rocks Road
   7A2               1        UBS      4000 Collins Road
   7A3               1        UBS      4500 1st Avenue South
   7A4               1        UBS      6451 Boeing Drive
   7A5               1        UBS      11307 Roszell
   7A6               1        UBS      2334 East Highway 80
   7A7               1        UBS      6300 West Fond Du Lac
   7A8               1        UBS      1545 Hawkins Boulevard
   7A9               1        UBS      2909 West Second Street
  7A10               1        UBS      5210 Perry Robinson Circle
  7A11               1        UBS      13430 Yarmouth Drive
  7A12               1        UBS      2555 East Gila Ridge Road
  7A13               1        UBS      2520 South 1 Road
  7A14               1        UBS      230 North Mannheim Road
  7A15               1        UBS      3400 Conner Street
  7A16               1        UBS      2345 South 2nd Street
  7A17               1        UBS      1460 Northwest 19th Street
  7A18               1        UBS      301 North Elmire Street
  7A19               1        UBS      1101 15th Street North
  7A20               1        UBS      1735 Coffee Port Road
  7A21               1        UBS      4240 Lee's Summit Road
  7A22               1        UBS      7400 Dianna
  7A23               1        UBS      2110 Telephone Road
  7A24               1        UBS      1350 Doughty Road
  7A25               1        UBS      7450 John White Boulevard
  7A26               1        UBS      1728 Paseo San Luis
  7A27               1        UBS      3000 East Villa Maria
  7A28               1        UBS      40090 Hempstead Road
  7A29               1        UBS      2400 East Jackson
  7A30               1        UBS      2010 La Salle
  7A31               1        UBS      703 Church Street
  7A32               1        UBS      2400 Osborn Lane
  7A33               1        UBS      2505 Stone Hollow
  7A34               1        UBS      17283 General Puller Highway
  7A35               1        UBS      317 Casa Drive
  7A36               1        UBS      605 West 4th Street
  7A37               1        UBS      103 Park Hill Drive
  7A38               1        UBS      1320 East Highway 84
    8       (7)      1        UBS      Arizona Retail Portfolio
   8A1               1        UBS      Scottsdale Promenade
   8A2               1        UBS      Union Crossing Shopping Center
   8A3               1        UBS      Cooper Village
   8A4               1        UBS      Chandler Mercado
   8A5               1        UBS      Glendale Square
   8A6               1        UBS      Three Fountains
   8A7               1        UBS      Higley & Pecos
   8A8               1        UBS      Greenway Village
   8A9               1        UBS      Casa Grande
  8A10               1        UBS      Fairway Park Plaza
  8A11               1        UBS      Tempe Scottsdale Center
  8A12               1        UBS      Blockbuster Elliot/McClintock Pad
  8A13               1        UBS      Sunflower Plaza
  8A14               1        UBS      McQueen & Guadalupe North
    9       (8)      1        LB       Midtown Plaza
   10       (9)      1        UBS      Martin Resorts
  10A1               1        UBS      Pismo Lighthouse Suites
  10A2               1        UBS      Paso Robles Inn
  10A3               1        UBS      Avila Lighthouse Suites
  10A4               1        UBS      Shore Cliff Lodge
  10A5               1        UBS      Shelter Cove Lodge
   11       (10)     2        UBS      Wolverine Portfolio
  11A1               2        UBS      South Lyon Woods
  11A2               2        UBS      Appletree Estates
  11A3               2        UBS      College Heights
  11A4               2        UBS      Metro Commons
  11A5               2        UBS      Brighton Village
  11A6               2        UBS      Hillcrest Acres
  11A7               2        UBS      Royal Village
  11A8               2        UBS      Fernwood Estates
  11A9               2        UBS      Chalet Village
  11A10              2        UBS      Satellite Bay
   12                1        LB       Bucs Headquarters Office Bldg
   13                1        LB       The Gallery at Beach Place
   14                1        LB       695/710 Route 46
  14A1               1        LB       695 Route 46
  14A2               1        LB       710 Route 46
   15                2        LB       Archstone Woodlands Apartments
   16       (11)     1        UBS      Triangle Town Center Subordinate Tranche
   17                1        LB       500 Collins Avenue
   18                2        LB       Jefferson at Kessler Park
   19                1        UBS      Santa Maria Plaza
   20       (12)     2        UBS      Redwood Portfolio II
  20A1               2        UBS      Colonial Acres
  20A2               2        UBS      Algoma Estates
  20A3               2        UBS      Colonial Manor
   21                2        LB       Thornblade Park Apartments
   22                1        UBS      6380 Wilshire
   23                1        Key      Weatherford Marketplace
   24       (13)     1        UBS      Brunswig Square
   25                1        LB       Statesboro Mall
   26                2        LB       Jefferson at Founders Park
   27                1        Key      175 Fulton Avenue
   28                1        Key      First and Main North
   29                1        LB       Cool Creek Commons
   30                1        Key      Sharp Rees-Stealy Medical Office Building
   31                2        LB       Windsor Apartments
   32                2        LB       Lexington on the Green
   33                2        UBS      Grandview Apartments
   34                1        LB       Bradford Towne Center
   35                1        UBS      Lexham Street Retail
   36                1        Key      Sunset Place
   37                1        LB       Beta Center
   38                2        LB       New Hampton Commons Apartments
   39                2        LB       Jamesbridge Apartments
   40                1        Key      West Road Collection
   41                1        LB       Canterbury Village Shopping Center
   42                2        Key      Cumberland Links Apartments
   43                2        UBS      Sienna Springs Apartments
   44                1        LB       Dublin Mall
   45                1        Key      Shoppes at Oakmonte
   46                1        Key      Meadows Marketplace
   47                2        LB       Windsor Landing Apartments
   48                2        LB       Ramsgate Apartments
   49                1        UBS      Citizens Ohio Portfolio 2
  49A1               1        UBS      333 South Broadway
  49A2               1        UBS      1000 North Main Street
  49A3               1        UBS      1165 East Waterloo Road
  49A4               1        UBS      3100 Cleveland Avenue South
  49A5               1        UBS      3323 Kent Road
  49A6               1        UBS      9231 Chillicothe Road
  49A7               1        UBS      2233 East Perishing Street
  49A8               1        UBS      2495 Easton Street Northeast
  49A9               1        UBS      4333 Belmont Avenue
  49A10              1        UBS      8806 Ohio River Road
  49A11              1        UBS      15765 Broadway Avenue
  49A12              1        UBS      5205 Storer Avenue
   50       (14)     1        LB       Victor Marketplace
   51                2        LB       Indian Springs Apartments
   52                1        Key      Home Depot
   53                1        Key      Mid Park Centre
   54                1        UBS      Citizens Michigan Portfolio 5
  54A1               1        UBS      790 Penniman Avenue
  54A2               1        UBS      13620 Northbay Drive
  54A3               1        UBS      19410 Middlebelt Road
  54A4               1        UBS      36836 Van Dyke Road
  54A5               1        UBS      28999 West Five Mile Road
   55                1        LB       Cross Continents Office Building
   56                1        LB       Felton's Shopping Center
   57                1        LB       Melbourne Village
   58                1        LB       Pacific Marina Inn
   59                1        LB       Bee's Ferry Crossing
   60       (15)     1        Key      Park Place LaPalma
   61                1        UBS      Route 6 and Stoneleigh
   62                2        LB       Majestic Oaks
   63                2        UBS      Manns Mobile Home Park Portfolio
  63A1               2        UBS      M.A.N.N.S. MHP
  63A2               2        UBS      Ashville MHP
  63A3               2        UBS      Westbrook MHP
  63A4               2        UBS      By Way MHP
   64                1        UBS      Citizens Illinois Portfolio 3
  64A1               1        UBS      11150 South Western Avenue
  64A2               1        UBS      2811 North Narragansett Avenue
  64A3               1        UBS      2131 South China Place
  64A4               1        UBS      400 West 75th Street
  64A5               1        UBS      5830 West 35th Street
   65       (16)     1        LB       Drug Store Portfolio
  65A1               1        LB       Drug Store Portfolio - Eckerd
  65A2               1        LB       Drug Store Portfolio - Walgreens
   66                2        UBS      Boulevard Estates
   67                1        UBS      Citizens Illinois Portfolio 1
  67A1               1        UBS      45 West Roosevelt Road
  67A2               1        UBS      11960 South Western Avenue
  67A3               1        UBS      333 East Irving Park Road
  67A4               1        UBS      170 East Main Street
  67A5               1        UBS      600 South Governor's Highway
  67A6               1        UBS      7900 South LaVergne Avenue
   68                2        UBS      Bank Street Court
   69                1        Key      Iron Point Office
   70                1        Key      Phoenicia Specialty Foods
   71                1        Key      Rampart Campus
   72                1        UBS      Commonwealth Center
   73                1        UBS      Woodlands Retail
   74                1        LB       Park Place Plaza
   75                1        LB       Lakeview I & II
   76                1        UBS      Citizens Northeast Portfolio
  76A1               1        UBS      5068 Shelburne Road
  76A2               1        UBS      68 Helena Drive
  76A3               1        UBS      1675 Diamond Hill Road
  76A4               1        UBS      1477 Broad Street
  76A5               1        UBS      1117 Shelburne Road
  76A6               1        UBS      450 Ocean Avenue
  76A7               1        UBS      464 Hope Street
  76A8               1        UBS      431 Woodstock Road
  76A9               1        UBS      48 Portland Street
  76A10              1        UBS      1108 VT Route 149
   77                1        LB       Parker Square - Bldg 600
   78                2        LB       Serene Village
   79                2        LB       Crystal Pointe Apartments
   80                2        LB       Windsor Townhomes & Erin's @ Windsor
   81                1        Key      PrimaPharm Life Science Building
   82                2        LB       Preston Racquet Club
   83                2        LB       Royal Crest Apartments
   84                1        LB       Pratt & Whitney Building
   85                1        Key      CVS Commerce Bank - New Carrolton
   86                1        Key      North Shore Self Storage
   87                2        LB       Fountains Gardens & Fountains Corner
   88                1        LB       Town West Plaza
   89                1        Key      Waynesboro Shopping Center
   90                1        Key      Hamburg Shopping Center
   91                2        UBS      Village Green Apartments
   92       (17)     2        Key      Gaffney Portfolio
  92A1               2        Key      Creekside at Wellington
  92A2               2        Key      Magnolia Ridge Apartments
   93                1        Key      Dix-Toledo Shopping Center
   94                2        LB       Shenandoah Woods
   95                1        Key      Ashley Furniture Home Store
   96                1        Key      Air Industries
   97                1        LB       Patel Hotel Portfolio
  97A1               1        LB       Patel Hotel Portfolio - Country Inn & Suites
  97A2               1        LB       Patel Hotel Portfolio - Quality Inn
   98                1        LB       Fond du Lac Plaza
   99                1        Key      Stor-More West Seattle
   100               1        LB       Northpark Plaza
   101               2        UBS      Varsity Properties
  101A1              2        UBS      604-612 Franklin Boulevard
  101A2              2        UBS      207 West 39th Street
  101A3              2        UBS      2514 Hartford Road
  101A4              2        UBS      2503 Hartford Road
  101A5              2        UBS      3203 Highland Terrace
  101A6              2        UBS      3804 Duval Street
  101A7              2        UBS      4506 Caswell Avenue
  101A8              2        UBS      5007 Westfield Drive
  101A9              2        UBS      5004 Westfield Drive
 101A10              2        UBS      5002 North Fresco Drive
 101A11              2        UBS      3907 Avenue F
   102               1        LB       Stonegate Crossing
   103               1        UBS      Citizens New York Portfolio 4
  103A1              1        UBS      126 West Main Street
  103A2              1        UBS      324 Prospect Street
  103A3              1        UBS      70 Main Street
  103A4              1        UBS      247 Main Street
  103A5              1        UBS      4116 Center Street
  103A6              1        UBS      3092 Main Street
  103A7              1        UBS      603 River Road
   104               1        UBS      Citizens 15 Portfolio
  104A1              1        UBS      23801 Michigan Avenue
  104A2              1        UBS      15930 Michigan Avenue
   105               2        LB       Village West Apartments
   106               1        UBS      Citizens New York Portfolio 1
  106A1              1        UBS      26 South Route 9W
  106A2              1        UBS      253 North Main Street
  106A3              1        UBS      1818 5th Avenue
  106A4              1        UBS      4883 State Highway 30
  106A5              1        UBS      9 North Main Street
   107               1        Key      Chillicothe Plaza
   108               1        Key      Maryland Food Center Warehouse
   109               1        Key      The University Medical Plaza
   110               2        UBS      Westbrook Apartments
   111               2        LB       Southern Oaks
   112               1        UBS      Citizens 4 Portfolio
  112A1              1        UBS      9401 South Cicero Avenue
  112A2              1        UBS      4001 South Harlem Avenue
   113               1        Key      Rocklin Self Storage
   114               1        LB       Lemon Bay
   115      (18)     2        UBS      Lakewood Apartment Portfolio
  115A1              2        UBS      Belvidere Apartments
  115A2              2        UBS      Adriana Apartments
  115A3              2        UBS      Riverside Apartments
   116      (19)     1        LB       Walgreens - Henderson
   117               1        UBS      Citizens New York Portfolio 3
  117A1              1        UBS      244 Main Street
  117A2              1        UBS      32 Saranac Avenue
  117A3              1        UBS      314 Hosley Avenue
  117A4              1        UBS      2523 Route 9N
  117A5              1        UBS      55 Broadway
  117A6              1        UBS      Route 30
  117A7              1        UBS      750 Utica Street
  117A8              1        UBS      Route 28 and 30
  117A9              1        UBS      4995 Route 28 North
 117A10              1        UBS      25 Water Street
   118               1        UBS      Best Western - Oak Harbor
   119      (20)     1        LB       Walgreens - Seguin, Texas
   120               1        Key      504 Esplanade Apartments
   121      (21)     1        Key      Walgreens
   122               1        Key      Stor-More Burien
   123               1        LB       2051 Dogwood Street
   124               1        UBS      Fulton Industrial
   125               2        UBS      Edgewater & Westcourt Apartments
  125A1              2        UBS      Edgewater Apartments
  125A2              2        UBS      Westcourt Apartments
   126               1        LB       Bear Valley West Self Storage
   127               1        UBS      Winston Plaza
   128      (22)     1        LB       General McMullen Self Storage
   129               1        LB       Butterfield Business Center
   130               1        LB       100 Medical Center Parkway
   131               1        LB       Plantation Storage
   132               2        Key      Maplewood Village Mobile Home Community
   133               1        UBS      Citizens 27 Portfolio
  133A1              1        UBS      955 Boardman-Poland Road
  133A2              1        UBS      3720 Center Road
  133A3              1        UBS      214 High Street
   134               1        Key      Cool Springs Collection
   135               2        LB       Hidden Pines
   136               1        UBS      American Mini Storage
   137               1        UBS      Rite Aid Zanesville
   138               1        UBS      Citizens 22 Portfolio
  138A1              1        UBS      3180 Sheridan Drive
  138A2              1        UBS      2000 Monroe Avenue
  138A3              1        UBS      212 Main Street
   139               1        UBS      Citizens New York Portfolio 2
  139A1              1        UBS      1516 Western Avenue
  139A2              1        UBS      456 Broadway
  139A3              1        UBS      3 Winterton Road
  139A4              1        UBS      6708 Route 9
  139A5              1        UBS      69 Main Street
   140      (23)     1        LB       Walgreens - Floyds Knob
   141               1        LB       Pecanland Village SC
   142      (24)     1        UBS      Walgreens - Reedsburg
   143               2        LB       Parkview Apartments
   144               1        UBS      Citizens 21 Portfolio
  144A1              1        UBS      North Chenango and Genessee Street
  144A2              1        UBS      9 Margaret Street
  144A3              1        UBS      89 Oriskany Boulevard
   145               1        UBS      North Meadows
   146               1        Key      Kuykendahl Medical Office
   147               1        LB       Sunrise II Mini Storage
   148               1        LB       Layton Hills Business Park
   149               1        UBS      Hamilton Mills
   150               1        Key      Wortham Village Shopping Center
   151               1        LB       Shelley Station
   152               1        UBS      Citizens 13 Portfolio
  152A1              1        UBS      31231 Harper Avenue
  152A2              1        UBS      69055 Main Street
   153               1        UBS      Storage Plus
   154               1        LB       Lincoln Meadows Retail Center
   155               1        UBS      Storage Zone
  155A1              1        UBS      Storage Zone II
  155A2              1        UBS      Storage Zone I
   156               1        LB       Park Meadows Village and Mrs. Winners
  156A1              1        LB       Park Meadows Village
  156A2              1        LB       Mrs. Winners
   157               1        LB       Comfort Inn - Metro Airport
   158               1        LB       Linens 'N Things of College Station
   159               1        UBS      Citizens 14 Portfolio
  159A1              1        UBS      27777 Southfield Road
  159A2              1        UBS      2050 12 Mile Road
   160               1        LB       Hampton Square Shopping Center
   161               1        UBS      20 North Central Avenue
   162               2        LB       Unity Pointe
   163               1        LB       Blalock Office Park
   164               2        LB       Ashley Square
   165               1        LB       White Pines Plaza
   166               2        UBS      Saddle Vineyards Apartments
   167               2        LB       Inglewood Village
   168               1        LB       Crossroads Shopping Center
   169               1        UBS      John's Creek
   170               1        UBS      Citizens 28 Portfolio
  170A1              1        UBS      780 West State Street
  170A2              1        UBS      315 East Main Street
   171      (25)     1        LB       Lambertson Lakes Shopping Center Phase II
   172               1        UBS      Autumn Springs
   173               1        LB       Silver Lake Plaza
   174               1        UBS      Diamond Head Inn
   175               1        LB       Stonecrest Village
   176               1        LB       Blackstone Building
   177               1        LB       Lewisville Retail Strip Center
   178               1        Key      AMC Theatre Outlot Retail Center
   179               1        LB       Fidelity Retail
   180               1        LB       310 Professional Building
   181               1        UBS      Hampton Bays Medical
   182               2        LB       Cleveland Ridge Apartments
   183               1        UBS      Family Dollar - 1425 East 71st Street
   184               1        Key      GetGo Station Monroeville


CONTROL
  NO.                                           ADDRESS                                              CITY
------------------------------------------------------------------------------------------------------------------

    1    520 Madison Avenue                                                                   New York
    2    1211 Avenue of the Americas                                                          New York
    3    Various                                                                              Various
   3A1   7650 Route 309                                                                       Coopersburg
   3A2   265 East Township Line Road                                                          Elkins Park
   3A3   N27 W5707 Lincoln Blvd.                                                              Cedarburg
   3A4   44 Donaldson Road                                                                    Tremont
   3A5   3821 South Chicago Avenue                                                            South Milwaukee
   3A6   1950 Ridgedale Rd.                                                                   South Bend
   3A7   257 Georgetown Road                                                                  Beaver Falls
   3A8   8633 32nd Avenue                                                                     Kenosha
   3A9   2420 West Third Street                                                               Owensboro
  3A10   960 South Rapids Road                                                                Manitowoc
  3A11   3875 Turkeyfoot Road                                                                 Elsmere
  3A12   5900 Meadowcreek Drive                                                               Milford
  3A13   220 South 4th Avenue                                                                 West Reading
  3A14   100 Little Road                                                                      Lower Burrell
  3A15   32 Buena Vista Drive                                                                 New Castle
  3A16   2827 Northgate Blvd.                                                                 Fort Wayne
  3A17   130 Kaufman Drive                                                                    Fairmont
  3A18   701 Slate Belt Boulevard                                                             Bangor
  3A19   1390 Camp Hill Road                                                                  Dresher
  3A20   411 Berta Wallace Drive                                                              Irvine
  3A21   430 Lily Road NE                                                                     Olympia
  3A22   4001 Capitol Mall Drive                                                              Olympia
  3A23   571 Parkway Drive                                                                    Salyersville
  3A24   900 Anson Street                                                                     Salem
  3A25   414 South University Road                                                            Spokane
  3A26   200 Norfleet Drive                                                                   Somerset
  3A27   140 South Marion Ave.                                                                Bremerton
  3A28   21400 72nd Avenue West                                                               Edmonds
  3A29   1116 East Lauridsen Blvd.                                                            Port Angeles
  3A30   3650 Klepinger Road                                                                  Dayton
  3A31   2701 Clare Avenue                                                                    Bremerton
  3A32   7900 West 28th Street                                                                St. Louis Park
  3A33   3431 N. 13th St                                                                      Sheboygan
  3A34   1902 Mead Avenue                                                                     Sheboygan
  3A35   4255 Medwell Drive                                                                   Newburgh
  3A36   6021 North Lidgerwood                                                                Spokane
  3A37   867 McGuire Avenue                                                                   Paducah
  3A38   44 South Souder Ave.                                                                 Columbus
  3A39   509 North Carrier Street                                                             Morganfield
  3A40   25 South Boehne Camp Road                                                            Evansville
  3A41   130 Meadowlark Dr.                                                                   Richmond
  3A42   4415 West 36 1/2 Street                                                              St. Louis Park
  3A43   3680 Dolson Court NW                                                                 Carroll
  3A44   575 Cleveland Massillon Road                                                         Fairlawn
  3A45   375 West Main Street                                                                 West Jefferson
  3A46   210 West LaCrosse Ave.                                                               Coeur d'Alene
  3A47   814 Old Ekron Road                                                                   Brandenburg
  3A48   1305 Alexander                                                                       Centralia
  3A49   1415 County Club Road                                                                Mt. Vernon
  3A50   1980 Old Greensburg Road                                                             Campbellsville
  3A51   37930 Airport Road                                                                   Woodsfield
  3A52   7727 Portland Avenue South                                                           Richfield
  3A53   131 Meadowlark Dr.                                                                   Richmond
  3A54   313 West Main Street                                                                 Fordsville
  3A55   101 Fairgrounds Road                                                                 Hardinsburg
  3A56   1267 South Hill Road                                                                 Erie
  3A57   320 Albany Street                                                                    Dayton
  3A58   712 West 2nd Street                                                                  Leavenworth
  3A59   425 Davis Street                                                                     Hammond
  3A60   420 East Grundy Avenue                                                               Springfield
  3A61   717 East Alred                                                                       Weyauwega
  3A62   1119 N. Wisconsin Street                                                             Port Washington
  3A63   2200 Ironwood Place                                                                  Coeur d'Alene
  3A64   218 Elm Street                                                                       London
  3A65   1561 Newton Avenue                                                                   Bowling Green
  3A66   1401 Churchill Street                                                                Waupaca
  3A67   545 W. Moonglo Road                                                                  Scottsburg
  3A68   36759 Rocksprings Road                                                               Pomeroy
  3A69   1050 East Mountain View                                                              Ellensburg
  3A70   320 N. 7th Street                                                                    Cornell
  3A71   414 Robey Street                                                                     Franklin
  3A72   457 S. State Road 145                                                                French Lick
  3A73   2119 E. National Hwy.                                                                Washington
  3A74   1000 Lovell Avenue                                                                   Roseville
  3A75   124 West Nashville Highway                                                           Pembroke
  3A76   2582 Cerulean Road                                                                   Cadiz
  3A77   2200 White River Blvd.                                                               Muncie
  3A78   404 West Willow Street                                                               Dale
  3A79   1101 Woodland Drive                                                                  Elizabethtown
  3A80   2600 Morehouse Avenue                                                                Elkhart
  3A81   801 South State Road 57                                                              Washington
  3A82   1600 Saint Paris Pike                                                                Springfield
    4    11911-11921 Freedom Drive                                                            Reston
    5    1175 Peachtree Street NE                                                             Atlanta
    6    Various                                                                              Herndon
   6A1   13605-13665 Dulles Technology Drive                                                  Herndon
   6A2   13461 Sunrise Valley Drive                                                           Herndon
    7    Various                                                                              Various
   7A1   1781 McKees Rocks Road                                                               McKees Rocks
   7A2   4000 Collins Road                                                                    Lansing
   7A3   4500 1st Avenue South                                                                Birmingham
   7A4   6451 Boeing Drive                                                                    El Paso
   7A5   11307 Roszell Street                                                                 San Antonio
   7A6   2334 East Highway 80                                                                 Douglas
   7A7   6300 West Fond du Lac Avenue                                                         Milwaukee
   7A8   1545 Hawkins Boulevard                                                               El Paso
   7A9   2909 West Second Street                                                              Roswell
  7A10   5210 Perry Robinson Circle                                                           Lansing
  7A11   13430 Yarmouth Drive                                                                 Pickerington
  7A12   2555 East Gila Ridge Road                                                            Yuma
  7A13   2520 South I Road                                                                    Edinburg
  7A14   230 North Mannheim Road                                                              Hillside
  7A15   3400 Conner Street                                                                   Detroit
  7A16   2345 South 2nd Street                                                                El Centro
  7A17   1460 Northwest 19th Street                                                           Paris
  7A18   301 North Elmire Street                                                              Sayre
  7A19   1101 15th Street North                                                               Great Falls
  7A20   1735 Coffee Port Road                                                                Brownsville
  7A21   4240 Lee's Summit Road                                                               Independence
  7A22   7400 Diana Drive                                                                     El Paso
  7A23   2110 Telephone Road                                                                  Houston
  7A24   1350 Doughty Road                                                                    Egg Harbor Township
  7A25   7450 John White Boulevard                                                            Fort Worth
  7A26   1728 Paseo San Luis                                                                  Sierra Vista
  7A27   3000 East Villa Maria                                                                Bryan
  7A28   40090 Hempstead Road                                                                 Waller
  7A29   2400 East Jackson Street                                                             Hugo
  7A30   2010 La Salle Avenue                                                                 Waco
  7A31   703 Church Street                                                                    East Bernard
  7A32   2400 Osborn Lane                                                                     Bryan
  7A33   2505 Stone Hollow Drive                                                              Brenham
  7A34   17283 General Puller Highway                                                         Deltaville
  7A35   317 Casa Drive                                                                       Copperas Cove
  7A36   605 West 4th Street                                                                  Cameron
  7A37   103 Park Hill Drive                                                                  Hamilton
  7A38   1320 East Highway 84                                                                 Teague
    8    Various                                                                              Various
   8A1   7000 East Shea Boulevard                                                             Scottsdale
   8A2   4330-4410 West Union Hills                                                           Glendale
   8A3   6704-6744 East Broadway Road                                                         Mesa
   8A4   2041-2081 North Arizona Avenue                                                       Chandler
   8A5   5140-5190 West Peoria Avenue                                                         Glendale
   8A6   1310-1350 South Longmore Road                                                        Mesa
   8A7   3142 South Higley Road                                                               Gilbert
   8A8   3342 East Greenway Road                                                              Phoenix
   8A9   1150-1156 East Florence Boulevard                                                    Casa Grande
  8A10   5819-5897 West Indian School Road                                                    Phoenix
  8A11   2240 North Scottsdale Road                                                           Tempe
  8A12   1525 East Elliot Road                                                                Tempe
  8A13   8738 West Cholla Street                                                              Peoria
  8A14   904 North McQueen Road                                                               Gilbert
    9    1349 West Peachtree Street, 1360 Peachtree Street & 1372 Peachtree Street Northeast  Atlanta
   10    Various                                                                              Various
  10A1   2411 Price Street                                                                    Pismo Beach
  10A2   1103 Spring Street                                                                   Paso Robles
  10A3   550 Front Street                                                                     Avila Beach
  10A4   2555 Price Street                                                                    Pismo Beach
  10A5   2651 Price Street                                                                    Pismo Beach
   11    Various                                                                              Various
  11A1   530 Lanier Street                                                                    South Lyon
  11A2   1061 Wilson Avenue Northwest                                                         Grand Rapids
  11A3   3501 Auburn Road                                                                     Auburn Hills
  11A4   28745 Van Born Road                                                                  Romulus
  11A5   7500 Grand River Road                                                                Brighton
  11A6   3205 Douglas Avenue                                                                  Kalamazoo
  11A7   7519 Dorr Street                                                                     Toledo
  11A8   2701 Staghorn Court                                                                  Deland
  11A9   14622 North Nebraska Avenue                                                          Tampa
  11A10  6250 Roosevelt Boulevard                                                             Clearwater
   12    3302 West Martin Luther King, Jr. Boulevard                                          Tampa
   13    17 South Ft. Lauderdale Beach Blvd.                                                  Ft. Lauderdale
   14    Various                                                                              Fairfield Township
  14A1   695 Route 46                                                                         Fairfield Township
  14A2   710 Route 46                                                                         Fairfield Township
   15    2200 Woodlands Drive                                                                 Smyrna
   16    5959 Triangle Town Boulevard                                                         Raleigh
   17    500 Collins Avenue                                                                   Miami
   18    1520 North Beckley Avenue                                                            Dallas
   19    1318-1482 South Broadway                                                             Santa Maria
   20    Various                                                                              Various
  20A1   5374 E Deadwood Drive                                                                Kalamazoo
  20A2   4456 13 Mile Road                                                                    Rockford
  20A3   5500 West KL Avenue                                                                  Kalamazoo
   21    100 Mary Rose Lane                                                                   Greenville
   22    6380 Wilshire Boulevard                                                              Los Angeles
   23    116, 126 & 138 East Interstate Highway 20                                            Weatherford
   24    360 East 2nd Street                                                                  Los Angeles
   25    32 Statesboro Mall                                                                   Statesboro
   26    1401 North Zang Boulevard                                                            Dallas
   27    175 Fulton Avenue                                                                    Hempstead
   28    3710, 3730, 3770, 3771 Bloomington Street                                            Colorado Springs
   29    2430-2554 East 146th Street                                                          Carmel
   30    1400 East Palomar Street                                                             Chula Vista
   31    4415 NE 5th Street                                                                   Renton
   32    5850 Hillandale Road                                                                 Lithonia
   33    1319 East 45th Street and 4010 Avenue R                                              Kearney
   34    U.S. Route 6                                                                         Towanda
   35    967 & 970 Farmington Avenue, 27-43 LaSalle Road, 1253 New Britain Avenue             West Hartford
   36    3860 - 3890 South Lindbergh Boulevard                                                Sunset Hills
   37    5151 & 5171 Glenwood Avenue                                                          Raleigh
   38    1482 West Queen Street                                                               Hampton
   39    3815 Advantage Way Drive                                                             Memphis
   40    10777 North Freeway                                                                  Houston
   41    8637-8699 Sudley Road                                                                Manassas
   42    130 Cumberland Way                                                                   Pataskala
   43    9455 Skillman Street                                                                 Dallas
   44    2005 Veterans Boulevard                                                              Dublin
   45    1210 South International Parkway                                                     Lake Mary
   46    233-277 Hershey Road                                                                 Hershey
   47     7124 Southlake Pkwy                                                                 Morrow
   48    1407 Bernard Street                                                                  Denton
   49    Various                                                                              Various
  49A1   333 South Broadway                                                                   Akron
  49A2   1000 North Main Street                                                               North Canton
  49A3   1165 East Waterloo Road                                                              Akron
  49A4   3100 Cleveland Avenue South                                                          Canton
  49A5   3323 Kent Road                                                                       Stow
  49A6   9231 Chillicothe Road                                                                Kirtland
  49A7   2233 East Perishing Street                                                           Salem
  49A8   2495 Easton Street Northeast                                                         North Canton
  49A9   4333 Belmont Avenue                                                                  Youngstown
  49A10  8806 Ohio River Road                                                                 Wheelersburg
  49A11  15765 Broadway Avenue                                                                Maple Heights
  49A12  5205 Storer Avenue                                                                   Cleveland
   50    14775 Victor Hugo Boulevard                                                          Hugo
   51    3700 Watonga Boulevard                                                               Houston
   52    1816 Meriden-Waterbury Turnpike                                                      Southington
   53    1709, 1721 and 1729 Mid Park Drive; 1706, 1714 and 1722 Louisville Drive             Knoxville
   54    Various                                                                              Various
  54A1   790 Penniman Avenue                                                                  Plymouth
  54A2   13620 Northbay Drive                                                                 Sterling Heights
  54A3   19410 Middlebelt Road                                                                Livonia
  54A4   36836 Van Dyke Road                                                                  Sterling Heights
  54A5   28999 West Five Mile Road                                                            Livonia
   55    3838 North Sam Houston Parkway                                                       Houston
   56    877 Joe Frank Harris Parkway                                                         Cartersville
   57    1270 North Wickham Road                                                              Melbourne
   58    2628 Waiwai Loop                                                                     Honolulu
   59    2863, 2875 Ashley River Road & 2135 Bees Ferry Road                                  Charleston
   60    1743 Park Center Drive                                                               Orlando
   61    1879-1905 Route 6                                                                    Carmel
   62    5800 SW 20th Avenue                                                                  Gainesville
   63    Various                                                                              Various
  63A1   755 Stelzer Road                                                                     Columbus
  63A2   4800 Duvall Road                                                                     Ashville
  63A3   2700 Harrison Avenue                                                                 Columbus
  63A4   2778 Innis Road                                                                      Columbus
   64    Various                                                                              Various
  64A1   11150 South Western Avenue                                                           Chicago
  64A2   2811 North Narragansett Avenue                                                       Chicago
  64A3   2131 South China Place                                                               Chicago
  64A4   400 West 75th Street                                                                 Downer's Grove
  64A5   5830 West 35th Street                                                                Cicero
   65    Various                                                                              Various
  65A1   2040 Atlantic Avenue                                                                 Chesapeake
  65A2   301 North Main Street                                                                Holly Springs
   66    2266 Gulf to Bay Boulevard                                                           Clearwater
   67    Various                                                                              Various
  67A1   45 West Roosevelt Road                                                               Lombard
  67A2   11960 South Western Avenue                                                           Blue Island
  67A3   333 East Irving Park Road                                                            Wood Dale
  67A4   170 East Main Street                                                                 Braidwood
  67A5   600 South Governor's Highway                                                         Peotone
  67A6   7900 South LaVergne Avenue                                                           Burbank
   68    24-30 Bank Street                                                                    Philadelphia
   69    50 Iron Point Circle                                                                 Folsom
   70    12141 Westheimer Road                                                                Houston
   71    125 Rampart Way & 7600 East 1st Place                                                Denver
   72    5309 Commonwealth Center Parkway                                                     Midlothian
   73    16778 Interstate 45 South                                                            Conroe
   74    3761 Nova Road                                                                       Port Orange
   75    1701-1705 West Northwest Highway                                                     Grapevine
   76    Various                                                                              Various
  76A1   5068 Shelburne Road                                                                  Shelburne
  76A2   68 Helena Drive                                                                      Williston
  76A3   1675 Diamond Hill Road                                                               Woonsocket
  76A4   1477 Broad Street                                                                    Providence
  76A5   1117 Shelburne Road                                                                  South Burlington
  76A6   450 Ocean Avenue                                                                     New London
  76A7   464 Hope Street                                                                      Bristol
  76A8   431 Woodstock Road                                                                   Woodstock
  76A9   48 Portland Street                                                                   Rochester
  76A10  1108 VT Route 149                                                                    West Pawlet
   77    600 Parker Square                                                                    Flower Mound
   78    14014 Admiralty Way                                                                  Lynnwood
   79    35434 25th Ave. S.W.                                                                 Federal Way
   80    4170, 4231 & 4271 Altoona Drive                                                      Dallas
   81    9940 Mesa Rim Road                                                                   San Diego
   82    5840 Spring Valley Road                                                              Dallas
   83    190 N. Old Corry Field Road                                                          Pensacola
   84    15091 Al Highway 20                                                                  Huntsville
   85    8201 Annapolis Road                                                                  New Carrolton
   86    38 Swampscott Road                                                                   Salem
   87    5150 Hildring Drive East & 4151 Southwest Loop 820                                   Fort Worth
   88    5615 West 38th Street                                                                Indianapolis
   89    12771-12785 Washington Township Boulevard                                            Waynesboro
   90    500 Hawk Ridge Drive                                                                 Hamburg
   91    1005 Village Green Drive                                                             Norfolk
   92    Various                                                                              Gaffney
  92A1   1230 Overbrook Drive                                                                 Gaffney
  92A2   266 Goldmine Springs Road                                                            Gaffney
   93    15060-15310 Dix-Toledo Highway                                                       Southgate
   94    4250 West 34th Street                                                                Houston
   95    1705 South Forty Drive                                                               Greensboro
   96    1460 North Fifth Avenue & 1479-80 North Clinton Avenue                               Bay Shore
   97    Various                                                                              Indianapolis
  97A1   4325 Southport Crossings Way                                                         Indianapolis
  97A2   4345 Southport Crossings Way                                                         Indianapolis
   98    75 West Scott Street                                                                 Fond du Lac
   99    2850 Southwest Yancy Street                                                          Seattle
   100   6300 and 6320 Rufe Snow Drive                                                        North Richland Hills
   101   Various                                                                              Austin
  101A1  604-612 Franklin Boulevard                                                           Austin
  101A2  207 West 39th Street                                                                 Austin
  101A3  2514 Hartford Road                                                                   Austin
  101A4  2503 Hartford Road                                                                   Austin
  101A5  3203 Highland Terrace                                                                Austin
  101A6  3804 Duval Street                                                                    Austin
  101A7  4506 Caswell Avenue                                                                  Austin
  101A8  5007 Westfield Drive                                                                 Austin
  101A9  5004 Westfield Drive                                                                 Austin
 101A10  5002 North Fresco Drive                                                              Austin
 101A11  3907 Avenue F                                                                        Austin
   102   2735 South Hulen Street                                                              Fort Worth
   103   Various                                                                              Various
  103A1  126 West Main Street                                                                 Malone
  103A2  324 Prospect Street                                                                  Herkimer
  103A3  70 Main Street                                                                       Unadilla
  103A4  247 Main Street                                                                      Binghamton
  103A5  4116 Center Street                                                                   Lyons Falls
  103A6  3092 Main Street                                                                     Hartwick
  103A7  603 River Road                                                                       Chenango Bridge
   104   Various                                                                              Dearborn
  104A1  23801 Michigan Avenue                                                                Dearborn
  104A2  15930 Michigan Avenue                                                                Dearborn
   105   1449 Richland Rd.                                                                    Auburn
   106   Various                                                                              Various
  106A1  26 South Route 9W                                                                    West Haverstraw
  106A2  253 North Main Street                                                                Spring Valley
  106A3  1818 5th Avenue                                                                      Troy
  106A4  4883 State Highway 30                                                                Amsterdam
  106A5  9 North Main Street                                                                  Broadalbin
   107   887 North Bridge Street                                                              Chillicothe
   108   7855 Rappahannock Avenue                                                             Jessup
   109   20403 University Boulevard                                                           Sugar Land
   110   3474 53rd Avenue                                                                     Columbus
   111   6353 Skyline Drive                                                                   Houston
   112   Various                                                                              Various
  112A1  9401 South Cicero Avenue                                                             Oak Lawn
  112A2  4001 South Harlem Avenue                                                             Stickney
   113   6500 Fairway Drive                                                                   Rocklin
   114   1845 Englewood Road                                                                  Englewood
   115   Various                                                                              Lakewood
  115A1  12221-12227 Clifton Boulevard                                                        Lakewood
  115A2  11733 Edgewater Drive                                                                Lakewood
  115A3  17540 Madison Avenue                                                                 Lakewood
   116   400 Second Street                                                                    Henderson
   117   Various                                                                              Various
  117A1  244 Main Street                                                                      North Creek
  117A2  32 Saranac Avenue                                                                    Lake Placid
  117A3  314 Hosley Avenue                                                                    Tupper Lake
  117A4  2523 Route 9N                                                                        Au Sable Forks
  117A5  55 Broadway                                                                          Saranac Lake
  117A6  Route 30                                                                             Long Lake
  117A7  750 Utica Street                                                                     De Ruyter
  117A8  Route 28 and 30                                                                      Indian Lake
  117A9  4995 Route 28 North                                                                  Newcomb
 117A10  25 Water Street                                                                      Fort Covington
   118   33175 State Route 20                                                                 Oak Harbor
   119   1357 East Court Street                                                               Seguin
   120   504 Esplanade                                                                        Redondo Beach
   121   26800 John R Road                                                                    Madison Heights
   122   1612 Southwest 114th Street                                                          Seattle
   123   2051 Dogwood Street                                                                  Louisville
   124   7404-7440 Fulton Avenue                                                              Los Angeles
   125   Various                                                                              Lakewood
  125A1  12505 Edgewater Drive                                                                Lakewood
  125A2  12060 Lake Avenue                                                                    Lakewood
   126   12829 Bear Valley Road                                                               Victorville
   127   241 Winston Street                                                                   Los Angeles
   128   421 North General McMullen Drive                                                     San Antonio
   129   3700 East Columbia Street                                                            Tucson
   130   100 Medical Center Parkway                                                           Huntsville
   131   810 Sparkleberry Lane                                                                Columbia
   132   201 Cape Avenue                                                                      Cocoa
   133   Various                                                                              Various
  133A1  955 Boardman-Poland Road                                                             Boardman
  133A2  3720 Center Road                                                                     Brunswick
  133A3  214 High Street                                                                      Wadsworth
   134   790 Jordan Road                                                                      Franklin
   135   6360 Skyline Drive                                                                   Houston
   136   7399 US Highway 64                                                                   Memphis
   137   825 East Main Street                                                                 Zanesville
   138   Various                                                                              Various
  138A1  3180 Sheridan Drive                                                                  Amherst
  138A2  2000 Monroe Avenue                                                                   Rochester
  138A3  212 Main Street                                                                      East Aurora
   139   Various                                                                              Various
  139A1  1516 Western Avenue                                                                  Albany
  139A2  456 Broadway                                                                         Newburgh
  139A3  3 Winterton Road                                                                     Bloomingburg
  139A4  6708 Route 9                                                                         Rhinebeck
  139A5  69 Main Street                                                                       Worcester
   140   200 Lafollette Station                                                               Floyds Knobs
   141   4739 Pecanland Mall Drive                                                            Monroe
   142   1100 East Main Street                                                                Reedsburg
   143   1200 West Taylor Street                                                              Sherman
   144   Various                                                                              Various
  144A1  North Chenango and Genessee Street                                                   Greene
  144A2  9 Margaret Street                                                                    Plattsburgh
  144A3  89 Oriskany Boulevard                                                                Whitesboro
   145   10 North Meadows Drive                                                               McCandless
   146   21301 Kuykendahal Road                                                               Spring
   147   3225 S. Nellis Boulevard                                                             Las Vegas
   148   1550-1590 North Hill Field Road                                                      Layton
   149   2108 Teron Trace                                                                     Dacula
   150   12914 FM 1960 Road West                                                              Houston
   151   570 South State Street                                                               Shelley
   152   Various                                                                              Various
  152A1  31231 Harper Avenue                                                                  St. Clair Shores
  152A2  69055 Main Street                                                                    Richmond
   153   5701 Old Bullard Road                                                                Tyler
   154   18366 East Lincoln Avenue                                                            Parker
   155   Various                                                                              Tallahassee
  155A1  4525 Capital Circle Northwest                                                        Tallahassee
  155A2  3945 West Pensacola Street                                                           Tallahassee
   156   Various                                                                              Various
  156A1  9447 Park Meadow Drive                                                               Lone Tree
  156A2  1195 Merchants Drive                                                                 Dallas
   157   31800 Wick Road                                                                      Romulus
   158   1505 University Dr. East, Suite 700                                                  College Station
   159   Various                                                                              Various
  159A1  27777 Southfield Road                                                                Lathrup Village
  159A2  2050 12 Mile Road                                                                    Warren
   160   1325 West Elm Street                                                                 Hampton
   161   20-21 North Central Avenue                                                           Valley Stream
   162    6370 Windswept Lane                                                                 Houston
   163   1200 Blalock                                                                         Houston
   164   6330 Windswept Lane                                                                  Houston
   165   1008 East Main Street                                                                Cherryville
   166   3752 Winchester Road                                                                 Memphis
   167    6363 Skyline Drive                                                                  Houston
   168   1317 East Dixie Drive                                                                Asheboro
   169   6630 McGinnis Ferry Road                                                             Duluth
   170   Various                                                                              Various
  170A1  780 West State Street                                                                Alliance
  170A2  315 East Main Street                                                                 Louisville
   171   9650-9686 Washington Street                                                          Thornton
   172   300 Autumn Springs Court                                                             Franklin
   173   291 West Canfield Avenue                                                             Coeur d'Alene
   174   605 Diamond Street                                                                   San Diego
   175   341-361 Northside Dr                                                                 Valdosta
   176   100 South Dixie Highway                                                              West Palm Beach
   177   859 Highway 121                                                                      Lewisville
   178   28250 Diehl Road                                                                     Warrenville
   179   425 Commerce Street                                                                  Hernando
   180   310 South Dixie Highway                                                              West Palm Beach
   181   240 West Montauk Highway                                                             Hampton Bays
   182   206 Gray Avenue                                                                      Durham
   183   1425 East 71st Street                                                                Chicago
   184   4000 Monroeville Boulevard                                                           Monroeville


                                                       CROSS        ORIGINAL   CUT-OFF DATE  % OF AGGREGATE    CUMULATIVE %
CONTROL                              LOAN         COLLATERALIZED    BALANCE       BALANCE     CUT-OFF DATE   OF INITIAL POOL
  NO.     STATE        ZIP          PURPOSE           GROUPS          ($)           ($)          BALANCE         BALANCE
----------------------------------------------------------------------------------------------------------------------------

   1     NY              10022  Refinance         No              475,000,000   475,000,000           15.7%            15.7%
   2     NY              10016  Acquisition       No              275,000,000   275,000,000            9.1%            24.8%
   3     Various       Various  Recapitalization  No              250,000,000   250,000,000            8.3%            33.1%
  3A1    PA              18036                    Yes(LB-F)                       8,231,226
  3A2    PA              19027                    Yes(LB-F)                       8,189,831
  3A3    WI              53012                    Yes(LB-F)                       7,845,934
  3A4    PA              17981                    Yes(LB-F)                       7,349,195
  3A5    WI              53172                    Yes(LB-F)                       5,999,083
  3A6    IN              46614                    Yes(LB-F)                       5,534,186
  3A7    PA              15010                    Yes(LB-F)                       5,374,975
  3A8    WI              53142                    Yes(LB-F)                       5,215,763
  3A9    KY              42301                    Yes(LB-F)                       5,088,394
 3A10    WI              54220                    Yes(LB-F)                       5,069,289
 3A11    KY              41018                    Yes(LB-F)                       5,059,736
 3A12    OH              45150                    Yes(LB-F)                       5,008,788
 3A13    PA              19611                    Yes(LB-F)                       4,801,814
 3A14    PA              15068                    Yes(LB-F)                       4,750,866
 3A15    DE              19720                    Yes(LB-F)                       4,747,682
 3A16    IN              46835                    Yes(LB-F)                       4,422,891
 3A17    WV              26554                    Yes(LB-F)                       4,225,469
 3A18    PA              18013                    Yes(LB-F)                       4,203,179
 3A19    PA              19034                    Yes(LB-F)                       4,104,468
 3A20    KY              40336                    Yes(LB-F)                       3,910,230
 3A21    WA              98506                    Yes(LB-F)                       3,846,546
 3A22    WA              98502                    Yes(LB-F)                       3,735,098
 3A23    KY              41465                    Yes(LB-F)                       3,735,098
 3A24    IN              47167                    Yes(LB-F)                       3,706,440
 3A25    WA              99206                    Yes(LB-F)                       3,591,808
 3A26    KY              42501                    Yes(LB-F)                       3,515,386
 3A27    WA              98312                    Yes(LB-F)                       3,486,728
 3A28    WA              98026                    Yes(LB-F)                       3,483,544
 3A29    WA              98362                    Yes(LB-F)                       3,448,517
 3A30    OH              45416                    Yes(LB-F)                       3,270,201
 3A31    WA              98310                    Yes(LB-F)                       3,196,964
 3A32    MN              55426                    Yes(LB-F)                       3,193,779
 3A33    WI              53083                    Yes(LB-F)                       3,095,068
 3A34    WI              53081                    Yes(LB-F)                       3,085,516
 3A35    IN              47630                    Yes(LB-F)                       2,967,699
 3A36    WA              99208                    Yes(LB-F)                       2,942,225
 3A37    KY              42001                    Yes(LB-F)                       2,875,357
 3A38    OH              43222                    Yes(LB-F)                       2,776,646
 3A39    KY              42437                    Yes(LB-F)                       2,706,593
 3A40    IN              47712                    Yes(LB-F)                       2,665,198
 3A41    KY              40475                    Yes(LB-F)                       2,515,539
 3A42    MN              55416                    Yes(LB-F)                       2,461,407
 3A43    OH              43112                    Yes(LB-F)                       2,410,460
 3A44    OH              44333                    Yes(LB-F)                       2,397,723
 3A45    OH              43162                    Yes(LB-F)                       2,388,170
 3A46    ID              83814                    Yes(LB-F)                       2,346,775
 3A47    KY              40108                    Yes(LB-F)                       2,279,906
 3A48    WA              98531                    Yes(LB-F)                       2,279,906
 3A49    IN              47620                    Yes(LB-F)                       2,248,064
 3A50    KY              42718                    Yes(LB-F)                       2,238,511
 3A51    OH              43793                    Yes(LB-F)                       2,232,143
 3A52    MN              55423                    Yes(LB-F)                       2,228,959
 3A53    KY              40475                    Yes(LB-F)                       2,190,748
 3A54    KY              42343                    Yes(LB-F)                       2,171,643
 3A55    KY              40143                    Yes(LB-F)                       2,092,037
 3A56    PA              16509                    Yes(LB-F)                       2,057,010
 3A57    OH              45408                    Yes(LB-F)                       2,037,905
 3A58    IN              47137                    Yes(LB-F)                       1,923,273
 3A59    WI              54015                    Yes(LB-F)                       1,891,431
 3A60    KY              40069                    Yes(LB-F)                       1,888,246
 3A61    WI              54983                    Yes(LB-F)                       1,853,220
 3A62    WI              53074                    Yes(LB-F)                       1,830,930
 3A63    ID              83814                    Yes(LB-F)                       1,830,930
 3A64    OH              43140                    Yes(LB-F)                       1,811,825
 3A65    KY              42104                    Yes(LB-F)                       1,805,456
 3A66    WI              54981                    Yes(LB-F)                       1,706,745
 3A67    IN              47170                    Yes(LB-F)                       1,668,535
 3A68    OH              45769                    Yes(LB-F)                       1,649,429
 3A69    WA              98926                    Yes(LB-F)                       1,604,850
 3A70    WI              54732                    Yes(LB-F)                       1,585,745
 3A71    KY              42135                    Yes(LB-F)                       1,461,560
 3A72    IN              47432                    Yes(LB-F)                       1,420,165
 3A73    IN              47501                    Yes(LB-F)                       1,420,165
 3A74    MN              55113                    Yes(LB-F)                       1,391,507
 3A75    KY              42266                    Yes(LB-F)                       1,372,402
 3A76    KY              42211                    Yes(LB-F)                       1,273,691
 3A77    IN              47303                    Yes(LB-F)                       1,143,137
 3A78    IN              47523                    Yes(LB-F)                       1,079,453
 3A79    KY              42701                    Yes(LB-F)                       1,031,689
 3A80    IN              46517                    Yes(LB-F)                         792,872
 3A81    IN              47501                    Yes(LB-F)                         770,583
 3A82    OH              45504                    Yes(LB-F)                         757,846
   4     VA              20190  Refinance         No              121,500,000   121,500,000            4.0%            37.1%
   5     GA              30309  Acquisition       No              116,000,000   116,000,000            3.8%            41.0%
   6     VA              20171  Refinance         No              100,000,000   100,000,000            3.3%            44.3%
  6A1    VA              20171                    Yes (Key B)                    64,872,326
  6A2    VA              20171                    Yes (Key B)                    35,127,674
   7     Various       Various  Refinance         No               96,476,000    96,476,000            3.2%            47.5%
  7A1    PA              15136                    Yes (UBS-A)                    11,040,000
  7A2    MI              48910                    Yes (UBS-A)                     7,680,000
  7A3    AL              35222                    Yes (UBS-A)                     5,840,000
  7A4    TX              79925                    Yes (UBS-A)                     5,200,000
  7A5    TX              78217                    Yes (UBS-A)                     4,624,000
  7A6    AZ              85607                    Yes (UBS-A)                     4,600,000
  7A7    WI              53218                    Yes (UBS-A)                     4,560,000
  7A8    TX              79925                    Yes (UBS-A)                     4,312,000
  7A9    NM              88201                    Yes (UBS-A)                     3,760,000
 7A10    MI              48911                    Yes (UBS-A)                     3,360,000
 7A11    OH              43147                    Yes (UBS-A)                     2,920,000
 7A12    AZ              85365                    Yes (UBS-A)                     2,880,000
 7A13    TX              78539                    Yes (UBS-A)                     2,824,000
 7A14    IL              60162                    Yes (UBS-A)                     2,720,000
 7A15    MI              48215                    Yes (UBS-A)                     2,440,000
 7A16    CA              92243                    Yes (UBS-A)                     2,344,000
 7A17    TX              75460                    Yes (UBS-A)                     2,200,000
 7A18    PA              18840                    Yes (UBS-A)                     2,160,000
 7A19    MT              59401                    Yes (UBS-A)                     2,140,000
 7A20    TX              78521                    Yes (UBS-A)                     2,000,000
 7A21    MO              64055                    Yes (UBS-A)                     1,840,000
 7A22    TX              79904                    Yes (UBS-A)                     1,632,000
 7A23    TX              77023                    Yes (UBS-A)                     1,608,000
 7A24    NJ              08234                    Yes (UBS-A)                     1,360,000
 7A25    TX              76120                    Yes (UBS-A)                     1,360,000
 7A26    AZ              85635                    Yes (UBS-A)                     1,200,000
 7A27    TX              77803                    Yes (UBS-A)                     1,200,000
 7A28    TX              77484                    Yes (UBS-A)                     1,120,000
 7A29    OK              74743                    Yes (UBS-A)                     1,112,000
 7A30    TX              76706                    Yes (UBS-A)                       936,000
 7A31    TX              77435                    Yes (UBS-A)                       840,000
 7A32    TX              77803                    Yes (UBS-A)                       640,000
 7A33    TX              77833                    Yes (UBS-A)                       528,000
 7A34    VA              23043                    Yes (UBS-A)                       504,000
 7A35    TX              76522                    Yes (UBS-A)                       456,000
 7A36    TX              76520                    Yes (UBS-A)                       280,000
 7A37    TX              76531                    Yes (UBS-A)                       152,000
 7A38    TX              75860                    Yes (UBS-A)                       104,000
   8     AZ            Various  Refinance         No               86,000,000    86,000,000            2.8%            50.3%
  8A1    AZ              85254                    Yes (UBS-A)                    28,750,000
  8A2    AZ              85308                    Yes (UBS-A)                    11,070,000
  8A3    AZ              85206                    Yes (UBS-A)                    10,530,000
  8A4    AZ              85225                    Yes (UBS-A)                     7,950,000
  8A5    AZ              85302                    Yes (UBS-A)                     5,700,000
  8A6    AZ              85202                    Yes (UBS-A)                     5,060,000
  8A7    AZ              85297                    Yes (UBS-A)                     4,430,000
  8A8    AZ              85032                    Yes (UBS-A)                     2,550,000
  8A9    AZ              85222                    Yes (UBS-A)                     2,200,000
 8A10    AZ              85031                    Yes (UBS-A)                     2,060,000
 8A11    AZ              85281                    Yes (UBS-A)                     1,760,000
 8A12    AZ              85283                    Yes (UBS-A)                     1,580,000
 8A13    AZ              85345                    Yes (UBS-A)                     1,480,000
 8A14    AZ              85233                    Yes (UBS-A)                       880,000
   9     GA              30309  Acquisition       No               65,000,000    65,000,000            2.2%            52.5%
  10     CA            Various  Refinance         No               50,000,000    50,000,000            1.7%            54.1%
 10A1    CA              93449                    Yes (UBS-C)                    10,750,000
 10A2    CA              93446                    Yes (UBS-C)                    10,500,000
 10A3    CA              93424                    Yes (UBS-C)                    10,000,000
 10A4    CA              93449                    Yes (UBS-C)                     9,500,000
 10A5    CA              93449                    Yes (UBS-C)                     9,250,000
  11     Various       Various  Refinance         No               46,550,000    46,550,000            1.5%            55.7%
 11A1    MI              48178                    Yes (UBS-D)                     8,000,000
 11A2    MI              49534                    Yes (UBS-D)                     6,400,000
 11A3    MI              48326                    Yes (UBS-D)                     5,800,000
 11A4    MI              48174                    Yes (UBS-D)                     5,550,000
 11A5    MI              48114                    Yes (UBS-D)                     5,300,000
 11A6    MI              49004                    Yes (UBS-D)                     4,900,000
 11A7    OH              43615                    Yes (UBS-D)                     4,700,000
 11A8    FL              32724                    Yes (UBS-D)                     2,200,000
 11A9    FL              33613                    Yes (UBS-D)                     2,100,000
 11A10   FL              33760                    Yes (UBS-D)                     1,600,000
  12     FL              33607  Acquisition       No               41,000,000    41,000,000            1.4%            57.0%
  13     FL              33316  Refinance         No               40,000,000    40,000,000            1.3%            58.4%
  14     NJ              07004  Acquisition       No               35,000,000    35,000,000            1.2%            59.5%
 14A1    NJ              07004                    Yes (LB-B)                     22,000,000
 14A2    NJ              07004                    Yes (LB-B)                     13,000,000
  15     GA              30080  Acquisition       No               32,750,000    32,750,000            1.1%            60.6%
  16     NC              27616  Refinance         No               29,000,000    29,000,000            1.0%            61.6%
  17     FL              33139  Refinance         No               28,500,000    28,500,000            0.9%            62.5%
  18     TX              75203  Acquisition       Yes (LB-A)       25,200,000    25,200,000            0.8%            63.4%
  19     CA              93454  Refinance         No               23,500,000    23,500,000            0.8%            64.1%
  20     MI            Various  Refinance         No               22,550,000    22,550,000            0.7%            64.9%
 20A1    MI              49002                    Yes (UBS-C)                    11,550,000
 20A2    MI              49341                    Yes (UBS-C)                     7,250,000
 20A3    MI              49009                    Yes (UBS-C)                     3,750,000
  21     SC              29650  Acquisition       No               22,200,000    22,200,000            0.7%            65.6%
  22     CA              90048  Refinance         No               22,000,000    22,000,000            0.7%            66.3%
  23     TX              76087  Acquisition       No               21,925,000    21,925,000            0.7%            67.1%
  24     CA              90012  Acquisition       No               21,500,000    21,500,000            0.7%            67.8%
  25     GA              30458  Refinance         No               21,400,000    21,362,488            0.7%            68.5%
  26     TX              75203  Acquisition       Yes (LB-A)       21,300,000    21,300,000            0.7%            69.2%
  27     NY              11550  Refinance         No               19,850,000    19,850,000            0.7%            69.8%
  28     CO              80922  Refinance         No               18,500,000    18,442,239            0.6%            70.5%
  29     IN              46033  Refinance         No               18,000,000    18,000,000            0.6%            71.1%
  30     CA              91913  Refinance         No               16,000,000    16,000,000            0.5%            71.6%
  31     WA              98059  Refinance         No               15,900,000    15,900,000            0.5%            72.1%
  32     GA              30058  Acquisition       No               15,000,000    15,000,000            0.5%            72.6%
  33     NE              68847  Refinance         No               14,716,000    14,716,000            0.5%            73.1%
  34     PA              18854  Acquisition       No               14,500,000    14,500,000            0.5%            73.6%
  35     CT       06107, 06110  Refinance         No               14,500,000    14,500,000            0.5%            74.1%
  36     MO              63127  Refinance         No               14,000,000    14,000,000            0.5%            74.5%
  37     NC              27612  Acquisition       No               13,900,000    13,900,000            0.5%            75.0%
  38     VA              23669  Refinance         No               13,800,000    13,788,562            0.5%            75.4%
  39     TN              38128  Acquisition       No               13,500,000    13,500,000            0.4%            75.9%
  40     TX              77038  Refinance         No               13,352,000    13,352,000            0.4%            76.3%
  41     VA              20110  Refinance         No               13,200,000    13,200,000            0.4%            76.8%
  42     OH              43062  Refinance         No               12,000,000    11,977,302            0.4%            77.2%
  43     TX              75243  Refinance         No               11,500,000    11,463,534            0.4%            77.5%
  44     GA              31021  Refinance         No               11,200,000    11,180,367            0.4%            77.9%
  45     FL              32746  Refinance         No               11,100,000    11,100,000            0.4%            78.3%
  46     PA              17033  Refinance         No               10,775,000    10,775,000            0.4%            78.6%
  47     GA              30260  Acquisition       No               10,350,000    10,350,000            0.3%            79.0%
  48     TX              76201  Acquisition       No               10,000,000    10,000,000            0.3%            79.3%
  49     OH            Various  Acquisition       No                9,205,035     9,205,035            0.3%            79.6%
 49A1    OH              44308                    Yes (UBS-L)                     1,511,883
 49A2    OH              44720                    Yes (UBS-L)                     1,189,409
 49A3    OH              44306                    Yes (UBS-L)                       914,960
 49A4    OH              44707                    Yes (UBS-L)                       899,797
 49A5    OH              44224                    Yes (UBS-L)                       777,538
 49A6    OH              44094                    Yes (UBS-L)                       712,745
 49A7    OH              44460                    Yes (UBS-L)                       676,802
 49A8    OH              44721                    Yes (UBS-L)                       661,065
 49A9    OH              44505                    Yes (UBS-L)                       586,246
 49A10   OH              45694                    Yes (UBS-L)                       551,761
 49A11   OH              44137                    Yes (UBS-L)                       516,670
 49A12   OH              44102                    Yes (UBS-L)                       206,159
  50     MN              55038  Refinance         No                9,000,000     9,000,000            0.3%            79.9%
  51     TX              77092  Acquisition       No                9,000,000     9,000,000            0.3%            80.2%
  52     CT              06489  Acquisition       No                8,975,000     8,975,000            0.3%            80.5%
  53     TN              37921  Refinance         No                8,750,000     8,750,000            0.3%            80.8%
  54     MI            Various  Acquisition       No                8,556,920     8,556,920            0.3%            81.1%
 54A1    MI              48170                    Yes (UBS-F)                     2,513,018
 54A2    MI              48313                    Yes (UBS-F)                     2,320,950
 54A3    MI              48152                    Yes (UBS-F)                     1,434,685
 54A4    MI              48312                    Yes (UBS-F)                     1,325,294
 54A5    MI              48154                    Yes (UBS-F)                       962,973
  55     TX              77032  Acquisition       No                8,500,000     8,500,000            0.3%            81.4%
  56     GA              30120  Acquisition       No                8,500,000     8,500,000            0.3%            81.6%
  57     FL              32935  Refinance         No                8,400,000     8,400,000            0.3%            81.9%
  58     HI              96819  Acquisition       No                8,400,000     8,393,506            0.3%            82.2%
  59     SC              29414  Acquisition       No                8,300,000     8,300,000            0.3%            82.5%
  60     FL              32835  Refinance         No                8,245,000     8,223,932            0.3%            82.7%
  61     NY              10512  Acquisition       No                8,214,000     8,214,000            0.3%            83.0%
  62     FL              32607  Refinance         No                8,000,000     8,000,000            0.3%            83.3%
  63     OH            Various  Refinance         No                8,000,000     7,967,110            0.3%            83.5%
 63A1    OH              43219                    Yes (UBS-I)                     2,791,261
 63A2    OH              43103                    Yes (UBS-I)                     2,698,836
 63A3    OH              43204                    Yes (UBS-I)                     1,441,844
 63A4    OH              43219                    Yes (UBS-I)                     1,035,170
  64     IL            Various  Acquisition       No                7,878,479     7,878,479            0.3%            83.8%
 64A1    IL              60643                    Yes (UBS-N)                     1,727,696
 64A2    IL              60634                    Yes (UBS-N)                     1,716,647
 64A3    IL              60616                    Yes (UBS-N)                     1,542,077
 64A4    IL              60516                    Yes (UBS-N)                     1,449,145
 64A5    IL              60804                    Yes (UBS-N)                     1,442,914
  65     Various       Various  Acquisition       No                7,870,000     7,870,000            0.3%            84.1%
 65A1    VA              23324                    Yes (LB-C)                      4,350,000
 65A2    NC              27540                    Yes (LB-C)                      3,520,000
  66     FL              33765  Refinance         No                7,800,000     7,800,000            0.3%            84.3%
  67     IL            Various  Acquisition       No                7,708,684     7,708,684            0.3%            84.6%
 67A1    IL              60148                    Yes (UBS-O)                     2,858,270
 67A2    IL              60406                    Yes (UBS-O)                     1,597,762
 67A3    IL              60191                    Yes (UBS-O)                     1,224,337
 67A4    IL              60408                    Yes (UBS-O)                       804,599
 67A5    IL              60468                    Yes (UBS-O)                       719,373
 67A6    IL              60459                    Yes (UBS-O)                       504,343
  68     PA              19106  Refinance         No                7,500,000     7,500,000            0.2%            84.8%
  69     CA              95630  Refinance         No                7,500,000     7,494,249            0.2%            85.1%
  70     TX              77077  Refinance         No                7,500,000     7,493,767            0.2%            85.3%
  71     CO              80230  Refinance         No                7,500,000     7,491,573            0.2%            85.6%
  72     VA              23112  Acquisition       No                7,300,000     7,300,000            0.2%            85.8%
  73     TX              77384  Acquisition       No                7,270,000     7,270,000            0.2%            86.1%
  74     FL              32129  Refinance         No                7,200,000     7,200,000            0.2%            86.3%
  75     TX              76051  Acquisition       No                7,160,000     7,160,000            0.2%            86.5%
  76     Various       Various  Acquisition       No                7,076,077     7,076,077            0.2%            86.8%
 76A1    VT              05482                    Yes (UBS-Q)                     1,669,997
 76A2    VT              05495                    Yes (UBS-Q)                       994,452
 76A3    RI              02895                    Yes (UBS-Q)                       857,751
 76A4    RI              02905                    Yes (UBS-Q)                       733,904
 76A5    VT              05403                    Yes (UBS-Q)                       644,654
 76A6    CT              06320                    Yes (UBS-Q)                       569,248
 76A7    RI              02809                    Yes (UBS-Q)                       557,368
 76A8    VT              05091                    Yes (UBS-Q)                       419,339
 76A9    NH              03867                    Yes (UBS-Q)                       344,585
 76A10   VT              05775                    Yes (UBS-Q)                       284,779
  77     TX              75028  Refinance         No                6,800,000     6,800,000            0.2%            87.0%
  78     WA              98087  Refinance         No                6,650,000     6,650,000            0.2%            87.2%
  79     WA              98023  Refinance         No                6,550,000     6,550,000            0.2%            87.4%
  80     TX              75233  Refinance         No                6,280,000     6,280,000            0.2%            87.6%
  81     CA              92121  Refinance         No                6,000,000     6,000,000            0.2%            87.8%
  82     TX              75254  Acquisition       No                5,850,000     5,850,000            0.2%            88.0%
  83     FL              32507  Acquisition       No                5,850,000     5,850,000            0.2%            88.2%
  84     AL              35756  Acquisition       No                5,840,000     5,832,863            0.2%            88.4%
  85     MD              20784  Acquisition       No                5,750,000     5,750,000            0.2%            88.6%
  86     MA              01970  Refinance         No                5,700,000     5,700,000            0.2%            88.8%
  87     TX              76132  Refinance         No                5,530,000     5,530,000            0.2%            89.0%
  88     IN              46254  Refinance         No                5,458,000     5,458,000            0.2%            89.2%
  89     PA              17268  Acquisition       No                5,400,000     5,395,848            0.2%            89.3%
  90     PA              19526  Refinance         No                5,400,000     5,394,726            0.2%            89.5%
  91     NE              68701  Refinance         No                5,348,000     5,348,000            0.2%            89.7%
  92     SC            Various  Refinance         No                5,330,000     5,325,698            0.2%            89.9%
 92A1    SC              29341                    Yes (Key A)                     2,929,134
 92A2    SC              29340                    Yes (Key A)                     2,396,564
  93     MI              48195  Refinance         No                5,300,000     5,293,354            0.2%            90.0%
  94     TX              77092  Acquisition       Yes (LB-B)        5,200,000     5,200,000            0.2%            90.2%
  95     NC              27407  Refinance         No                5,200,000     5,194,227            0.2%            90.4%
  96     NY              11706  Acquisition       No                5,100,000     5,100,000            0.2%            90.6%
  97     IN              46237  Refinance         No                5,100,000     5,074,562            0.2%            90.7%
 97A1    IN              46237                    Yes (LB-D)                      3,034,787
 97A2    IN              46237                    Yes (LB-D)                      2,039,775
  98     WI              54935  Refinance         No                5,059,000     5,059,000            0.2%            90.9%
  99     WA              98126  Refinance         No                5,000,000     5,000,000            0.2%            91.1%
  100    TX              76180  Refinance         No                5,000,000     5,000,000            0.2%            91.2%
  101    TX            Various  Refinance         No                5,000,000     5,000,000            0.2%            91.4%
 101A1   TX              78751                    Yes (UBS-S)                     1,560,525
 101A2   TX              78751                    Yes (UBS-S)                       484,554
 101A3   TX              78703                    Yes (UBS-S)                       454,270
 101A4   TX              78703                    Yes (UBS-S)                       436,965
 101A5   TX              78731                    Yes (UBS-S)                       415,333
 101A6   TX              78751                    Yes (UBS-S)                       328,805
 101A7   TX              78751                    Yes (UBS-S)                       311,500
 101A8   TX              78731                    Yes (UBS-S)                       259,583
 101A9   TX              78731                    Yes (UBS-S)                       259,583
101A10   TX              78731                    Yes (UBS-S)                       246,604
101A11   TX              78751                    Yes (UBS-S)                       242,278
  102    TX              76109  Refinance         No                4,950,000     4,950,000            0.2%            91.6%
  103    NY            Various  Acquisition       No                4,864,987     4,864,987            0.2%            91.7%
 103A1   NY              12953                    Yes (UBS-T)                     1,539,664
 103A2   NY              13350                    Yes (UBS-T)                       833,515
 103A3   NY              13846                    Yes (UBS-T)                       734,532
 103A4   NY              13905                    Yes (UBS-T)                       626,941
 103A5   NY              13368                    Yes (UBS-T)                       441,425
 103A6   NY              13348                    Yes (UBS-T)                       354,577
 103A7   NY              13745                    Yes (UBS-T)                       334,333
  104    MI            Various  Acquisition       No                4,861,024     4,861,024            0.2%            91.9%
 104A1   MI              48124                    Yes (UBS-CC)                    2,572,956
 104A2   MI              48126                    Yes (UBS-CC)                    2,288,068
  105    AL              36832  Refinance         No                4,840,000     4,840,000            0.2%            92.0%
  106    NY            Various  Acquisition       No                4,677,051     4,677,051            0.2%            92.2%
 106A1   NY              10993                    Yes (UBS-U)                     1,626,380
 106A2   NY              10977                    Yes (UBS-U)                     1,266,037
 106A3   NY              12180                    Yes (UBS-U)                       773,205
 106A4   NY              12010                    Yes (UBS-U)                       643,615
 106A5   NY              12025                    Yes (UBS-U)                       367,814
  107    OH              45601  Refinance         No                4,550,000     4,550,000            0.2%            92.3%
  108    MD              20794  Acquisition       No                4,500,000     4,500,000            0.1%            92.5%
  109    TX              77479  Acquisition       No                4,500,000     4,492,219            0.1%            92.6%
  110    NE              68601  Refinance         No                4,450,000     4,450,000            0.1%            92.8%
  111    TX              77057  Acquisition       Yes (LB-B)        4,400,000     4,400,000            0.1%            92.9%
  112    IL            Various  Acquisition       No                4,278,447     4,278,447            0.1%            93.1%
 112A1   IL              60453                    Yes (UBS-S)                     3,010,567
 112A2   IL              60402                    Yes (UBS-S)                     1,267,880
  113    CA              95677  Refinance         No                4,200,000     4,189,061            0.1%            93.2%
  114    FL              34223  Refinance         No                4,100,000     4,100,000            0.1%            93.3%
  115    OH              44107  Refinance         No                4,100,000     4,100,000            0.1%            93.5%
 115A1   OH              44107                    Yes (UBS-Y)                     2,273,000
 115A2   OH              44107                    Yes (UBS-Y)                     1,075,000
 115A3   OH              44107                    Yes (UBS-Y)                       752,000
  116    KY              42420  Refinance         No                4,100,000     4,096,664            0.1%            93.6%
  117    NY            Various  Acquisition       No                4,088,893     4,088,893            0.1%            93.8%
 117A1   NY              12853                    Yes (UBS-V)                       670,237
 117A2   NY              12946                    Yes (UBS-V)                       602,333
 117A3   NY              12986                    Yes (UBS-V)                       563,716
 117A4   NY              12912                    Yes (UBS-V)                       520,792
 117A5   NY              12983                    Yes (UBS-V)                       516,501
 117A6   NY              12847                    Yes (UBS-V)                       362,949
 117A7   NY              13052                    Yes (UBS-V)                       354,701
 117A8   NY              12842                    Yes (UBS-V)                       181,921
 117A9   NY              12852                    Yes (UBS-V)                       171,219
117A10   NY              12937                    Yes (UBS-V)                       144,524
  118    WA              98277  Refinance         No                4,000,000     4,000,000            0.1%            93.9%
  119    TX              78155  Acquisition       No                4,000,000     4,000,000            0.1%            94.0%
  120    CA              90277  Acquisition       No                4,000,000     3,996,579            0.1%            94.2%
  121    MI              48071  Refinance         No                3,945,000     3,934,519            0.1%            94.3%
  122    WA              98146  Refinance         No                3,900,000     3,900,000            0.1%            94.4%
  123    CO              80027  Refinance         No                3,900,000     3,900,000            0.1%            94.5%
  124    CA              91605  Refinance         No                3,750,000     3,750,000            0.1%            94.7%
  125    OH              44107  Acquisition       No                3,750,000     3,750,000            0.1%            94.8%
 125A1   OH              44107                    Yes (UBS Z)                     2,250,000
 125A2   OH              44107                    Yes (UBS Z)                     1,500,000
  126    CA              92392  Refinance         No                3,750,000     3,746,925            0.1%            94.9%
  127    CA              90013  Refinance         No                3,700,000     3,678,144            0.1%            95.0%
  128    TX              78237  Refinance         No                3,650,000     3,650,000            0.1%            95.2%
  129    AZ              85714  Refinance         No                3,650,000     3,650,000            0.1%            95.3%
  130    TX              77340  Refinance         No                3,650,000     3,650,000            0.1%            95.4%
  131    SC              29229  Refinance         No                3,600,000     3,600,000            0.1%            95.5%
  132    FL              32926  Refinance         No                3,600,000     3,593,574            0.1%            95.6%
  133    OH            Various  Acquisition       No                3,586,021     3,586,021            0.1%            95.8%
 133A1   OH              44512                    Yes (UBS-OO)                    1,624,058
 133A2   OH              44212                    Yes (UBS-OO)                    1,074,196
 133A3   OH              44281                    Yes (UBS-OO)                      887,767
  134    TN              37067  Acquisition       No                3,550,000     3,550,000            0.1%            95.9%
  135    TX              77057  Acquisition       Yes (LB-B)        3,475,000     3,475,000            0.1%            96.0%
  136    TN              38133  Acquisition       No                3,440,000     3,440,000            0.1%            96.1%
  137    OH              43701  Acquisition       No                3,420,000     3,420,000            0.1%            96.2%
  138    NY            Various  Acquisition       No                3,386,165     3,386,165            0.1%            96.3%
 138A1   NY              14226                    Yes (UBS-JJ)                    1,422,242
 138A2   NY              14618                    Yes (UBS-JJ)                      997,872
 138A3   NY              14052                    Yes (UBS-JJ)                      966,051
  139    NY            Various  Acquisition       No                3,360,685     3,360,685            0.1%            96.4%
 139A1   NY              12203                    Yes (UBS-W)                     1,156,557
 139A2   NY              12550                    Yes (UBS-W)                       770,998
 139A3   NY              12721                    Yes (UBS-W)                       664,957
 139A4   NY              12572                    Yes (UBS-W)                       434,440
 139A5   NY              12197                    Yes (UBS-W)                       333,733
  140    IN              47119  Acquisition       No                3,340,000     3,340,000            0.1%            96.5%
  141    LA              71203  Refinance         No                3,300,000     3,300,000            0.1%            96.7%
  142    WI              53959  Acquisition       No                3,275,000     3,275,000            0.1%            96.8%
  143    TX              75092  Refinance         No                3,200,000     3,200,000            0.1%            96.9%
  144    NY            Various  Acquisition       No                3,119,763     3,119,763            0.1%            97.0%
 144A1   NY              13778                    Yes (UBS-II)                    1,240,581
 144A2   NY              12901                    Yes (UBS-II)                    1,091,387
 144A3   NY              13492                    Yes (UBS-II)                      787,795
  145    PA              15090  Refinance         No                3,100,000     3,100,000            0.1%            97.1%
  146    TX              77379  Acquisition       No                3,100,000     3,097,616            0.1%            97.2%
  147    NV              89121  Acquisition       No                3,100,000     3,097,511            0.1%            97.3%
  148    UT              84041  Acquisition       No                3,000,000     3,000,000            0.1%            97.4%
  149    GA              30019  Refinance         No                2,975,000     2,975,000            0.1%            97.5%
  150    TX              77065  Acquisition       No                2,870,000     2,865,026            0.1%            97.6%
  151    ID              83274  Refinance         No                2,800,000     2,800,000            0.1%            97.7%
  152    MI            Various  Acquisition       No                2,745,131     2,745,131            0.1%            97.8%
 152A1   MI              48082                    Yes (UBS-AA)                    1,786,365
 152A2   MI              48062                    Yes (UBS-AA)                      958,766
  153    TX              75703  Acquisition       No                2,700,000     2,700,000            0.1%            97.9%
  154    CO              80134  Refinance         No                2,700,000     2,700,000            0.1%            97.9%
  155    FL            Various  Acquisition       No                2,700,000     2,695,060            0.1%            98.0%
 155A1   FL              32303                    Yes (X)                         1,628,355
 155A2   FL              32304                    Yes (X)                         1,066,705
  156    Various       Various  Refinance         No                2,650,000     2,650,000            0.1%            98.1%
 156A1   CO              80124                    Yes (LB-E)                      2,000,000
 156A2   GA              30132                    Yes (LB-E)                        650,000
  157    MI              48174  Refinance         No                2,650,000     2,643,310            0.1%            98.2%
  158    TX              77840  Acquisition       No                2,610,000     2,610,000            0.1%            98.3%
  159    MI            Various  Acquisition       No                2,599,151     2,599,151            0.1%            98.4%
 159A1   MI              48076                    Yes (UBS-BB)                    1,601,698
 159A2   MI              48092                    Yes (UBS-BB)                      997,453
  160    SC              29924  Refinance         No                2,600,000     2,588,951            0.1%            98.5%
  161    NY              11580  Refinance         No                2,500,000     2,495,251            0.1%            98.5%
  162    TX              77057  Acquisition       Yes (LB-B)        2,440,000     2,440,000            0.1%            98.6%
  163    TX              77054  Refinance         No                2,425,000     2,425,000            0.1%            98.7%
  164    TX              77057  Acquisition       Yes (LB-B)        2,420,000     2,420,000            0.1%            98.8%
  165    NC              28021  Refinance         No                2,400,000     2,384,983            0.1%            98.9%
  166    TN              38118  Acquisition       No                2,360,000     2,358,235            0.1%            98.9%
  167    TX              77057  Acquisition       Yes (LB-B)        2,300,000     2,300,000            0.1%            99.0%
  168    NC              27203  Refinance         No                2,300,000     2,300,000            0.1%            99.1%
  169    GA              30097  Refinance         No                2,255,000     2,249,550            0.1%            99.2%
  170    OH            Various  Acquisition       No                2,216,075     2,216,075            0.1%            99.2%
 170A1   OH              44601                    Yes (UBS-QQ)                    1,148,952
 170A2   OH              44641                    Yes (UBS-QQ)                    1,067,123
  171    CO              80229  Refinance         No                2,200,000     2,198,079            0.1%            99.3%
  172    TN              37067  Refinance         No                2,015,000     2,015,000            0.1%            99.4%
  173    ID              83815  Refinance         No                1,950,000     1,950,000            0.1%            99.4%
  174    CA              92109  Refinance         No                1,950,000     1,948,513            0.1%            99.5%
  175    GA              31602  Refinance         No                1,950,000     1,946,674            0.1%            99.6%
  176    FL              33401  Refinance         No                1,825,000     1,823,623            0.1%            99.6%
  177    TX              75057  Acquisition       No                1,762,500     1,762,500            0.1%            99.7%
  178    IL              60555  Refinance         No                1,700,000     1,694,623            0.1%            99.8%
  179    MS              38632  Refinance         No                1,650,000     1,650,000            0.1%            99.8%
  180    FL              33401  Refinance         No                1,520,000     1,518,853            0.1%            99.9%
  181    NY              11946  Refinance         No                1,250,000     1,250,000            0.0%            99.9%
  182    NC              27701  Refinance         No                1,200,000     1,200,000            0.0%            99.9%
  183    IL              60619  Acquisition       No                1,011,000     1,011,000            0.0%           100.0%
  184    PA              15146  Acquisition       No                  870,000       870,000            0.0%           100.0%


                   ADMINISTRATIVE   INTEREST                              ORIGINAL      REMAINING        ORIGINAL
CONTROL  MORTGAGE       COST         ACCRUAL     AMORTIZATION          INTEREST-ONLY  INTEREST-ONLY      TERM TO
  NO.    RATE (%)       RATE          BASIS          TYPE              PERIOD (MOS.)  PERIOD (MOS.)  MATURITY (MOS.)
--------------------------------------------------------------------------------------------------------------------

    1    5.922989      0.02065     Actual/360  Interest-Only                     120            119              120
    2    6.417870      0.02065     Actual/360  Interest-Only                     120            118              120
    3    6.652500      0.02065     Actual/360  Interest-Only, Balloon             36             36               60
   3A1
   3A2
   3A3
   3A4
   3A5
   3A6
   3A7
   3A8
   3A9
  3A10
  3A11
  3A12
  3A13
  3A14
  3A15
  3A16
  3A17
  3A18
  3A19
  3A20
  3A21
  3A22
  3A23
  3A24
  3A25
  3A26
  3A27
  3A28
  3A29
  3A30
  3A31
  3A32
  3A33
  3A34
  3A35
  3A36
  3A37
  3A38
  3A39
  3A40
  3A41
  3A42
  3A43
  3A44
  3A45
  3A46
  3A47
  3A48
  3A49
  3A50
  3A51
  3A52
  3A53
  3A54
  3A55
  3A56
  3A57
  3A58
  3A59
  3A60
  3A61
  3A62
  3A63
  3A64
  3A65
  3A66
  3A67
  3A68
  3A69
  3A70
  3A71
  3A72
  3A73
  3A74
  3A75
  3A76
  3A77
  3A78
  3A79
  3A80
  3A81
  3A82
    4    5.500500      0.02065     Actual/360  Interest-Only                     120            119              120
    5    5.762000      0.02065     Actual/360  Interest-Only                      60             59               60
    6    6.090000      0.04065     Actual/360  Interest-Only, Balloon             84             83              120
   6A1
   6A2
    7    6.110000      0.02065     Actual/360  Interest-Only                      60             60               60
   7A1
   7A2
   7A3
   7A4
   7A5
   7A6
   7A7
   7A8
   7A9
  7A10
  7A11
  7A12
  7A13
  7A14
  7A15
  7A16
  7A17
  7A18
  7A19
  7A20
  7A21
  7A22
  7A23
  7A24
  7A25
  7A26
  7A27
  7A28
  7A29
  7A30
  7A31
  7A32
  7A33
  7A34
  7A35
  7A36
  7A37
  7A38
    8    6.180000      0.02065     Actual/360  Interest-Only                     120            120              120
   8A1
   8A2
   8A3
   8A4
   8A5
   8A6
   8A7
   8A8
   8A9
  8A10
  8A11
  8A12
  8A13
  8A14
    9    5.762000      0.02065     Actual/360  Interest-Only                      60             59               60
   10    5.956000      0.02065     Actual/360  Interest-Only, Balloon             40             39              120
  10A1
  10A2
  10A3
  10A4
  10A5
   11    6.130000      0.02065     Actual/360  Interest-Only                     120            120              120
  11A1
  11A2
  11A3
  11A4
  11A5
  11A6
  11A7
  11A8
  11A9
  11A10
   12    6.597000      0.02065     Actual/360  Balloon                             0              0              180
   13    6.210000      0.02065     Actual/360  Interest-Only, Balloon             48             46              120
   14    6.190000      0.02065     Actual/360  Interest-Only                      60             57               60
  14A1
  14A2
   15    6.200000      0.02065     Actual/360  Interest-Only                      60             59               60
   16    5.737000      0.02065     30/360      Interest-Only, Balloon             24             13              120
   17    5.950000      0.02065     Actual/360  Interest-Only                     120            120              120
   18    5.910000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   19    6.100000      0.02065     Actual/360  Interest-Only, Balloon             60             60              120
   20    6.450000      0.02065     Actual/360  Interest-Only                     120            118              120
  20A1
  20A2
  20A3
   21    6.060000      0.02065     Actual/360  Interest-Only                      60             58               60
   22    6.380000      0.02065     Actual/360  Interest-Only                     120            120              120
   23    5.890000      0.04065     Actual/360  Interest-Only, Balloon             60             59              120
   24    6.100000      0.02065     Actual/360  Interest-Only                     120            119              120
   25    6.190000      0.02065     Actual/360  Balloon                             0              0              120
   26    5.910000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   27    5.940000      0.04065     Actual/360  Interest-Only, Balloon             24             24               60
   28    5.200000      0.04065     Actual/360  Balloon                             0              0              120
   29    5.880000      0.02065     Actual/360  Interest-Only, Balloon             36             29              120
   30    6.170000      0.04065     Actual/360  Interest-Only, ARD                 60             60              120
   31    5.830000      0.02065     Actual/360  Interest-Only                     120            119              120
   32    5.970000      0.02065     Actual/360  Interest-Only                      60             59               60
   33    6.050000      0.02065     Actual/360  Interest-Only, Balloon             60             60              120
   34    6.410000      0.02065     Actual/360  Interest-Only, Balloon             36             36              120
   35    5.790000      0.02065     Actual/360  Interest-Only                     120            120              120
   36    6.320000      0.04065     Actual/360  Interest-Only, Balloon             36             35              120
   37    6.360000      0.08065     Actual/360  Interest-Only                      60             59               60
   38    6.000000      0.08065     Actual/360  Balloon                             0              0              120
   39    5.980000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   40    6.020000      0.04065     Actual/360  Interest-Only, Balloon             60             58              120
   41    6.010000      0.02065     Actual/360  Interest-Only, Balloon             60             60              120
   42    5.850000      0.04065     Actual/360  Balloon                             0              0              120
   43    6.410000      0.02065     Actual/360  Balloon                             0              0              120
   44    6.190000      0.02065     Actual/360  Balloon                             0              0              120
   45    6.080000      0.04065     Actual/360  Interest-Only, Balloon             36             34              120
   46    5.550000      0.04065     Actual/360  Balloon                             0              0              120
   47    5.930000      0.02065     Actual/360  Interest-Only, Balloon             36             35               84
   48    6.420000      0.02065     Actual/360  Interest-Only                      60             59               60
   49    6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  49A1
  49A2
  49A3
  49A4
  49A5
  49A6
  49A7
  49A8
  49A9
  49A10
  49A11
  49A12
   50    6.200000      0.05065     Actual/360  Interest-Only, Balloon             24             22              120
   51    5.850000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   52    6.040000      0.04065     Actual/360  Interest-Only, ARD                 60             59              120
   53    5.900000      0.04065     Actual/360  Balloon                             0              0              120
   54    6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  54A1
  54A2
  54A3
  54A4
  54A5
   55    6.210000      0.08065     Actual/360  Interest-Only, Balloon             24             22               60
   56    5.880000      0.02065     Actual/360  Interest-Only, Balloon             36             35              120
   57    5.902000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   58    6.260000      0.02065     Actual/360  Balloon                             0              0              120
   59    5.880000      0.02065     Actual/360  Balloon                             0              0              120
   60    6.180000      0.04065     Actual/360  Balloon                             0              0              120
   61    6.120000      0.02065     Actual/360  Interest-Only, Balloon             36             34              120
   62    5.851000      0.08065     Actual/360  Interest-Only, Balloon             24             20               60
   63    6.410000      0.02065     Actual/360  Balloon                             0              0              120
  63A1
  63A2
  63A3
  63A4
   64    6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  64A1
  64A2
  64A3
  64A4
  64A5
   65    6.120000      0.02065     Actual/360  Interest-Only                     120            118              120
  65A1
  65A2
   66    6.463000      0.02065     Actual/360  Interest-Only                      60             60               60
   67    6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  67A1
  67A2
  67A3
  67A4
  67A5
  67A6
   68    6.200000      0.02065     Actual/360  Interest-Only                     120            119              120
   69    6.290000      0.04065     Actual/360  Balloon                             0              0              120
   70    5.990000      0.04065     Actual/360  Balloon                             0              0              120
   71    5.790000      0.04065     Actual/360  Balloon                             0              0              120
   72    6.180000      0.02065     Actual/360  Interest-Only, Balloon             36             36              120
   73    5.980000      0.02065     Actual/360  Interest-Only, Balloon             36             36              120
   74    5.902000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   75    6.120000      0.02065     Actual/360  Balloon                             0              0              120
   76    6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  76A1
  76A2
  76A3
  76A4
  76A5
  76A6
  76A7
  76A8
  76A9
  76A10
   77    5.960000      0.06065     Actual/360  Interest-Only, Balloon             48             48              120
   78    5.830000      0.02065     Actual/360  Interest-Only                     120            119              120
   79    5.830000      0.02065     Actual/360  Interest-Only                     120            119              120
   80    6.310000      0.06065     Actual/360  Interest-Only, Balloon             60             57              120
   81    6.300000      0.09065     Actual/360  Interest-Only, ARD                 60             59              120
   82    6.260000      0.02065     Actual/360  Interest-Only, Balloon             12              9              120
   83    6.180000      0.02065     Actual/360  Interest-Only, Balloon             24             22              120
   84    6.220000      0.02065     Actual/360  Balloon                             0              0              120
   85    6.020000      0.04065     Actual/360  Interest-Only, ARD                 60             59              120
   86    5.850000      0.04065     Actual/360  Interest-Only                     120            119              120
   87    6.290000      0.05065     Actual/360  Interest-Only, Balloon             60             59              120
   88    6.100000      0.02065     Actual/360  Interest-Only, Balloon             48             45              120
   89    6.280000      0.04065     Actual/360  Balloon                             0              0              120
   90    6.100000      0.04065     30/360      Balloon                             0              0              120
   91    6.050000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   92    6.100000      0.04065     Actual/360  Balloon                             0              0              120
  92A1
  92A2
   93    6.090000      0.04065     Actual/360  ARD                                 0              0              120
   94    6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   95    6.250000      0.09065     Actual/360  ARD                                 0              0              120
   96    6.030000      0.04065     Actual/360  Balloon                             0              0              120
   97    6.340000      0.02065     Actual/360  Balloon                             0              0              120
  97A1
  97A2
   98    6.100000      0.02065     Actual/360  Interest-Only, Balloon             48             45              120
   99    5.900000      0.04065     Actual/360  Interest-Only                     120            119              120
   100   6.210000      0.02065     Actual/360  Interest-Only, Balloon             24             20              120
   101   6.150000      0.02065     Actual/360  Balloon                             0              0              120
  101A1
  101A2
  101A3
  101A4
  101A5
  101A6
  101A7
  101A8
  101A9
 101A10
 101A11
   102   6.100000      0.02065     Actual/360  Interest-Only, Balloon             36             35              120
   103   6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  103A1
  103A2
  103A3
  103A4
  103A5
  103A6
  103A7
   104   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  104A1
  104A2
   105   5.850000      0.02065     Actual/360  Interest-Only, Balloon             36             36               84
   106   6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  106A1
  106A2
  106A3
  106A4
  106A5
   107   6.110000      0.04065     Actual/360  Interest-Only, ARD                 36             35              120
   108   6.260000      0.09065     Actual/360  Interest-Only                     120            118              120
   109   6.250000      0.04065     Actual/360  Balloon                             0              0              120
   110   6.060000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   111   6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   112   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  112A1
  112A2
   113   6.100000      0.09065     Actual/360  Balloon                             0              0              120
   114   5.902000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   115   6.150000      0.02065     Actual/360  Interest-Only                     120            119              120
  115A1
  115A2
  115A3
   116   6.070000      0.02065     Actual/360  Balloon                             0              0              120
   117   6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  117A1
  117A2
  117A3
  117A4
  117A5
  117A6
  117A7
  117A8
  117A9
 117A10
   118   6.120000      0.02065     Actual/360  Balloon                             0              0              120
   119   6.140000      0.02065     Actual/360  Interest-Only, Balloon             60             60              120
   120   5.880000      0.04065     Actual/360  Balloon                             0              0              120
   121   6.150000      0.04065     Actual/360  ARD                                 0              0              120
   122   5.900000      0.04065     Actual/360  Interest-Only                     120            119              120
   123   6.110000      0.08065     Actual/360  Interest-Only, Balloon             36             35              120
   124   6.200000      0.02065     Actual/360  Interest-Only, Balloon             24             23              120
   125   6.060000      0.02065     Actual/360  Interest-Only, Balloon             60             60              120
  125A1
  125A2
   126   6.040000      0.08065     Actual/360  Balloon                             0              0              120
   127   6.350000      0.02065     Actual/360  Balloon                             0              0              120
   128   5.880000      0.02065     Actual/360  Interest-Only, Balloon             24             23              120
   129   6.280000      0.08065     Actual/360  Interest-Only, Balloon             60             57              120
   130   6.190000      0.06065     Actual/360  Interest-Only, Balloon             36             34              120
   131   6.290000      0.02065     Actual/360  Interest-Only, Balloon             24             22              120
   132   6.110000      0.04065     Actual/360  Balloon                             0              0              120
   133   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  133A1
  133A2
  133A3
   134   6.060000      0.09065     Actual/360  Interest-Only, Balloon             24             23              120
   135   6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   136   6.320000      0.02065     Actual/360  Interest-Only                     120            119              120
   137   6.150000      0.02065     Actual/360  Balloon                             0              0              120
   138   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  138A1
  138A2
  138A3
   139   6.191000      0.02065     Actual/360  Interest-Only                     120            117              120
  139A1
  139A2
  139A3
  139A4
  139A5
   140   5.980000      0.02065     Actual/360  Interest-Only                     120            120              120
   141   6.050000      0.02065     Actual/360  Interest-Only, Balloon             24             24              120
   142   6.000000      0.02065     Actual/360  Interest-Only                     120            120              120
   143   6.510000      0.02065     Actual/360  Interest-Only, Balloon             12              9              120
   144   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  144A1
  144A2
  144A3
   145   5.980000      0.02065     Actual/360  Interest-Only, Balloon             24             24              120
   146   6.280000      0.04065     Actual/360  Balloon                             0              0              120
   147   6.120000      0.08065     Actual/360  Balloon                             0              0              120
   148   6.010000      0.08065     Actual/360  Interest-Only, Balloon             36             35              120
   149   6.080000      0.02065     Actual/360  Balloon                             0              0              120
   150   6.240000      0.04065     Actual/360  Balloon                             0              0              120
   151   5.902000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   152   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  152A1
  152A2
   153   6.310000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   154   6.080000      0.02065     Actual/360  Interest-Only, Balloon             24             17              120
   155   6.000000      0.02065     Actual/360  Balloon                             0              0              120
  155A1
  155A2
   156   6.430000      0.02065     Actual/360  Balloon                             0              0              120
  156A1
  156A2
   157   6.440000      0.02065     Actual/360  Balloon                             0              0              120
   158   6.390000      0.02065     Actual/360  Interest-Only, Balloon             60             59              120
   159   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  159A1
  159A2
   160   6.270000      0.02065     Actual/360  Balloon                             0              0               84
   161   6.350000      0.02065     Actual/360  Balloon                             0              0              120
   162   6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   163   6.030000      0.02065     Actual/360  Balloon                             0              0              120
   164   6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   165   6.100000      0.11065     Actual/360  Balloon                             0              0              120
   166   6.380000      0.02065     Actual/360  Balloon                             0              0               60
   167   6.230000      0.06065     Actual/360  Interest-Only, Balloon             60             58              120
   168   5.902000      0.02065     Actual/360  Interest-Only, Balloon             48             47              120
   169   6.410000      0.02065     Actual/360  Balloon                             0              0              120
   170   6.300000      0.02065     Actual/360  Interest-Only                      60             57               60
  170A1
  170A2
   171   5.800000      0.08065     Actual/360  Balloon                             0              0              120
   172   6.150000      0.02065     Actual/360  Interest-Only, Balloon             24             24              120
   173   6.410000      0.08065     Actual/360  Interest-Only, Balloon             60             58              120
   174   6.310000      0.02065     Actual/360  Balloon                             0              0              120
   175   6.310000      0.02065     Actual/360  Balloon                             0              0              120
   176   6.350000      0.08065     Actual/360  Balloon                             0              0               60
   177   6.230000      0.02065     Actual/360  Interest-Only, Balloon             48             46              120
   178   6.420000      0.04065     Actual/360  Balloon                             0              0              120
   179   6.230000      0.02065     Actual/360  Interest-Only, Balloon             30             29              120
   180   6.350000      0.08065     Actual/360  Balloon                             0              0               60
   181   6.350000      0.02065     Actual/360  Balloon                             0              0              120
   182   6.050000      0.02065     Actual/360  Interest-Only, Balloon             24             23              120
   183   6.240000      0.02065     Actual/360  Balloon                             0              0              120
   184   6.400000      0.04065     Actual/360  Interest-Only, ARD                 24             23              120


            REMAINING       ORIGINAL      REMAINING                  MATURITY OR
CONTROL      TERM TO      AMORTIZATION  AMORTIZATION  ORIGINATION    ANTICIPATED     BALLOON          PROPERTY
  NO.    MATURITY (MOS.)   TERM (MOS.)   TERM (MOS.)      DATE     REPAYMENT DATE  BALANCE ($)          TYPE
--------------------------------------------------------------------------------------------------------------------

   1                 119             0             0    9/26/2006      10/11/2016  475,000,000  Office
   2                 118             0             0    8/24/2006       9/11/2016  275,000,000  Office
   3                  60           300           300   10/16/2006      11/11/2011  242,137,291  Health Care
  3A1                                                                                           Health Care
  3A2                                                                                           Health Care
  3A3                                                                                           Health Care
  3A4                                                                                           Health Care
  3A5                                                                                           Health Care
  3A6                                                                                           Health Care
  3A7                                                                                           Health Care
  3A8                                                                                           Health Care
  3A9                                                                                           Health Care
  3A10                                                                                          Health Care
  3A11                                                                                          Health Care
  3A12                                                                                          Health Care
  3A13                                                                                          Health Care
  3A14                                                                                          Health Care
  3A15                                                                                          Health Care
  3A16                                                                                          Health Care
  3A17                                                                                          Health Care
  3A18                                                                                          Health Care
  3A19                                                                                          Health Care
  3A20                                                                                          Health Care
  3A21                                                                                          Health Care
  3A22                                                                                          Health Care
  3A23                                                                                          Health Care
  3A24                                                                                          Health Care
  3A25                                                                                          Health Care
  3A26                                                                                          Health Care
  3A27                                                                                          Health Care
  3A28                                                                                          Health Care
  3A29                                                                                          Health Care
  3A30                                                                                          Health Care
  3A31                                                                                          Health Care
  3A32                                                                                          Health Care
  3A33                                                                                          Health Care
  3A34                                                                                          Health Care
  3A35                                                                                          Health Care
  3A36                                                                                          Health Care
  3A37                                                                                          Health Care
  3A38                                                                                          Health Care
  3A39                                                                                          Health Care
  3A40                                                                                          Health Care
  3A41                                                                                          Health Care
  3A42                                                                                          Health Care
  3A43                                                                                          Health Care
  3A44                                                                                          Health Care
  3A45                                                                                          Health Care
  3A46                                                                                          Health Care
  3A47                                                                                          Health Care
  3A48                                                                                          Health Care
  3A49                                                                                          Health Care
  3A50                                                                                          Health Care
  3A51                                                                                          Health Care
  3A52                                                                                          Health Care
  3A53                                                                                          Health Care
  3A54                                                                                          Health Care
  3A55                                                                                          Health Care
  3A56                                                                                          Health Care
  3A57                                                                                          Health Care
  3A58                                                                                          Health Care
  3A59                                                                                          Health Care
  3A60                                                                                          Health Care
  3A61                                                                                          Health Care
  3A62                                                                                          Health Care
  3A63                                                                                          Health Care
  3A64                                                                                          Health Care
  3A65                                                                                          Health Care
  3A66                                                                                          Health Care
  3A67                                                                                          Health Care
  3A68                                                                                          Health Care
  3A69                                                                                          Health Care
  3A70                                                                                          Health Care
  3A71                                                                                          Health Care
  3A72                                                                                          Health Care
  3A73                                                                                          Health Care
  3A74                                                                                          Health Care
  3A75                                                                                          Health Care
  3A76                                                                                          Health Care
  3A77                                                                                          Health Care
  3A78                                                                                          Health Care
  3A79                                                                                          Health Care
  3A80                                                                                          Health Care
  3A81                                                                                          Health Care
  3A82                                                                                          Health Care
   4                 119             0             0   10/10/2006      10/11/2016  121,500,000  Office
   5                  59             0             0    10/3/2006      10/11/2011  116,000,000  Office
   6                 119           360           360    9/29/2006       10/1/2016   96,435,796  Office
  6A1                                                                                           Office
  6A2                                                                                           Office
   7                  60             0             0   11/10/2006      11/11/2011   96,476,000  Office
  7A1                                                                                           Office
  7A2                                                                                           Office
  7A3                                                                                           Office
  7A4                                                                                           Office
  7A5                                                                                           Office
  7A6                                                                                           Office
  7A7                                                                                           Office
  7A8                                                                                           Office
  7A9                                                                                           Office
  7A10                                                                                          Office
  7A11                                                                                          Office
  7A12                                                                                          Office
  7A13                                                                                          Office
  7A14                                                                                          Office
  7A15                                                                                          Office
  7A16                                                                                          Office
  7A17                                                                                          Office
  7A18                                                                                          Office
  7A19                                                                                          Office
  7A20                                                                                          Office
  7A21                                                                                          Office
  7A22                                                                                          Office
  7A23                                                                                          Office
  7A24                                                                                          Office
  7A25                                                                                          Office
  7A26                                                                                          Office
  7A27                                                                                          Office
  7A28                                                                                          Office
  7A29                                                                                          Office
  7A30                                                                                          Office
  7A31                                                                                          Office
  7A32                                                                                          Office
  7A33                                                                                          Office
  7A34                                                                                          Office
  7A35                                                                                          Office
  7A36                                                                                          Office
  7A37                                                                                          Office
  7A38                                                                                          Office
   8                 120             0             0   10/17/2006      11/11/2016   86,000,000  Retail
  8A1                                                                                           Retail
  8A2                                                                                           Retail
  8A3                                                                                           Retail
  8A4                                                                                           Retail
  8A5                                                                                           Retail
  8A6                                                                                           Retail
  8A7                                                                                           Retail
  8A8                                                                                           Retail
  8A9                                                                                           Retail
  8A10                                                                                          Retail
  8A11                                                                                          Retail
  8A12                                                                                          Retail
  8A13                                                                                          Retail
  8A14                                                                                          Retail
   9                  59             0             0    10/3/2006      10/11/2011   65,000,000  Office
   10                119           360           360   10/11/2006      10/11/2016   45,410,908  Hotel
  10A1                                                                                          Hotel
  10A2                                                                                          Hotel
  10A3                                                                                          Hotel
  10A4                                                                                          Hotel
  10A5                                                                                          Hotel
   11                120             0             0   10/26/2006      11/11/2016   43,626,841  Mobile Home Park
  11A1                                                                                          Mobile Home Park
  11A2                                                                                          Mobile Home Park
  11A3                                                                                          Mobile Home Park
  11A4                                                                                          Mobile Home Park
  11A5                                                                                          Mobile Home Park
  11A6                                                                                          Mobile Home Park
  11A7                                                                                          Mobile Home Park
  11A8                                                                                          Mobile Home Park
  11A9                                                                                          Mobile Home Park
 11A10                                                                                          Mobile Home Park
   12                180           300           300   10/23/2006      11/11/2021   25,363,950  Office
   13                118           360           360    8/31/2006       9/11/2016   36,929,041  Retail
   14                 57             0             0    7/26/2006       8/11/2011   35,000,000  Office
  14A1                                                                                          Office
  14A2                                                                                          Office
   15                 59             0             0   10/11/2006      10/11/2011   32,750,000  Multifamily
   16                109           336           336   11/16/2005       12/5/2015   24,753,411  Retail
   17                120             0             0    11/1/2006      11/11/2016   28,500,000  Retail
   18                119           360           360    9/21/2006      10/11/2016   23,549,342  Multifamily
   19                120           360           360    11/7/2006      11/11/2016   22,015,595  Retail
   20                118             0             0    8/25/2006       9/11/2016   21,221,359  Mobile Home Park
  20A1                                                                                          Mobile Home Park
  20A2                                                                                          Mobile Home Park
  20A3                                                                                          Mobile Home Park
   21                 58             0             0    8/31/2006       9/11/2011   22,200,000  Multifamily
   22                120             0             0   10/18/2006      11/11/2016   22,000,000  Office
   23                119           360           360    9/21/2006       10/1/2016   20,483,314  Retail
   24                119             0             0    10/5/2006      10/11/2016   21,500,000  Office
   25                118           360           358    8/30/2006       9/11/2016   18,250,148  Retail
   26                119           360           360    9/21/2006      10/11/2016   19,904,802  Multifamily
   27                 60           360           360   10/13/2006       11/1/2011   19,116,675  Office
   28                118           300           298    8/30/2006        9/1/2016   13,933,009  Retail
   29                113           360           360    3/29/2006       4/11/2016   16,228,970  Retail
   30                120           360           360   10/19/2006       11/1/2016   15,003,125  Office
   31                119             0             0    9/29/2006      10/11/2016   15,900,000  Multifamily
   32                 59             0             0    9/29/2006      10/11/2011   15,000,000  Multifamily
   33                120           360           360   10/19/2006      11/11/2016   13,777,329  Multifamily
   34                120           360           360    11/3/2006      11/11/2016   13,204,777  Retail
   35                120             0             0    11/7/2006      11/11/2016   14,500,000  Mixed-Use
   36                119           360           360    9/26/2006       10/1/2016   12,729,056  Mixed-Use
   37                 59             0             0    10/5/2006      10/11/2011   13,900,000  Office
   38                119           360           359    9/27/2006      10/11/2016   11,704,770  Multifamily
   39                119           360           360    9/21/2006      10/11/2016   12,627,617  Multifamily
   40                118           360           360    8/31/2006        9/1/2016   12,495,442  Retail
   41                120           360           360   10/26/2006      11/11/2016   12,351,451  Retail
   42                118           360           358    8/17/2006        9/1/2016   10,131,985  Multifamily
   43                116           360           356    6/29/2006       7/11/2016    9,871,486  Multifamily
   44                118           360           358    8/30/2006       9/11/2016    9,551,480  Retail
   45                118           360           360    8/11/2006        9/1/2016   10,045,983  Retail
   46                120           360           360    10/2/2006       11/1/2016    9,014,932  Retail
   47                 83           360           360    9/29/2006      10/11/2013    9,825,193  Multifamily
   48                 59             0             0    9/21/2006      10/11/2011   10,000,000  Multifamily
   49                117             0             0    7/21/2006       8/11/2016    9,205,035  Retail
  49A1                                                                                          Retail
  49A2                                                                                          Retail
  49A3                                                                                          Retail
  49A4                                                                                          Retail
  49A5                                                                                          Retail
  49A6                                                                                          Retail
  49A7                                                                                          Retail
  49A8                                                                                          Retail
  49A9                                                                                          Retail
 49A10                                                                                          Retail
 49A11                                                                                          Retail
 49A12                                                                                          Retail
   50                118           360           360    9/11/2006       9/11/2016    8,011,122  Retail
   51                119           360           360    9/25/2006      10/11/2016    8,403,631  Multifamily
   52                119           360           360     9/7/2006       10/1/2016    8,401,756  Retail
   53                120           360           360   10/27/2006       11/1/2016    7,398,769  Mixed-Use
   54                117             0             0    7/21/2006       8/11/2016    8,556,920  Retail
  54A1                                                                                          Retail
  54A2                                                                                          Retail
  54A3                                                                                          Retail
  54A4                                                                                          Retail
  54A5                                                                                          Retail
   55                 58           360           360     9/6/2006       9/11/2011    8,202,849  Office
   56                119           360           360    10/3/2006      10/11/2016    7,663,375  Retail
   57                119           360           360    9/13/2006      10/11/2016    7,716,777  Retail
   58                119           360           359    9/22/2006      10/11/2016    7,178,705  Hotel
   59                120           360           360   10/23/2006      11/11/2016    7,014,081  Retail
   60                117           360           357    7/31/2006        8/1/2016    7,030,197  Office
   61                118           360           360     9/1/2006       9/11/2016    7,439,731  Retail
   62                 56           360           360    6/21/2006       7/11/2011    7,699,518  Multifamily
   63                115           360           355     6/7/2006       6/11/2016    6,866,456  Mobile Home Park
  63A1                                                                                          Mobile Home Park
  63A2                                                                                          Mobile Home Park
  63A3                                                                                          Mobile Home Park
  63A4                                                                                          Mobile Home Park
   64                117             0             0    7/21/2006       8/11/2016    7,878,479  Retail
  64A1                                                                                          Retail
  64A2                                                                                          Retail
  64A3                                                                                          Retail
  64A4                                                                                          Retail
  64A5                                                                                          Retail
   65                118             0             0     9/7/2006       9/11/2016    7,870,000  Retail
  65A1                                                                                          Retail
  65A2                                                                                          Retail
   66                 60             0             0   10/26/2006      11/11/2011    7,800,000  Mobile Home Park
   67                117             0             0    7/21/2006       8/11/2016    7,708,684  Retail
  67A1                                                                                          Retail
  67A2                                                                                          Retail
  67A3                                                                                          Retail
  67A4                                                                                          Retail
  67A5                                                                                          Retail
  67A6                                                                                          Retail
   68                119             0             0    9/19/2006      10/11/2016    7,500,000  Multifamily
   69                119           360           359    8/24/2006       10/1/2016    6,415,067  Office
   70                119           360           359    9/19/2006       10/1/2016    6,359,413  Retail
   71                119           324           323     9/6/2006       10/1/2016    6,018,556  Office
   72                120           360           360   10/12/2006      11/11/2016    6,619,351  Office
   73                120           360           360    11/3/2006      11/11/2016    6,566,863  Retail
   74                119           360           360    9/13/2006      10/11/2016    6,614,381  Retail
   75                120           360           360   11/10/2006      11/11/2016    6,093,605  Office
   76                117             0             0    7/21/2006       8/11/2016    7,076,077  Retail
  76A1                                                                                          Retail
  76A2                                                                                          Retail
  76A3                                                                                          Retail
  76A4                                                                                          Retail
  76A5                                                                                          Retail
  76A6                                                                                          Retail
  76A7                                                                                          Retail
  76A8                                                                                          Retail
  76A9                                                                                          Retail
 76A10                                                                                          Retail
   77                120           360           360   10/12/2006      11/11/2016    6,252,565  Mixed-Use
   78                119             0             0    9/29/2006      10/11/2016    6,650,000  Multifamily
   79                119             0             0    9/29/2006      10/11/2016    6,550,000  Multifamily
   80                117           360           360    7/26/2006       8/11/2016    5,899,729  Multifamily
   81                119           360           360     9/7/2006       10/1/2016    5,635,912  Mixed-Use
   82                117           360           360    7/20/2006        8/1/2016    5,111,366  Multifamily
   83                118           360           360    8/17/2006       9/11/2016    5,204,927  Multifamily
   84                119           300           299    9/25/2006      10/11/2016    4,556,389  Industrial/Warehouse
   85                119           360           360     9/8/2006       10/1/2016    5,381,306  Retail
   86                119             0             0    9/28/2006       10/1/2016    5,700,000  Self-Storage
   87                119           360           360    9/15/2006      10/11/2016    5,193,764  Multifamily
   88                117           360           360    7/26/2006       8/11/2016    5,030,368  Retail
   89                119           360           359    9/20/2006       10/1/2016    4,617,527  Retail
   90                119           360           359     9/5/2006       10/1/2016    4,531,040  Retail
   91                119           360           360    9/28/2006      10/11/2016    5,007,082  Multifamily
   92                119           360           359    9/25/2006       10/1/2016    4,534,030  Multifamily
  92A1                                                                                          Multifamily
  92A2                                                                                          Multifamily
   93                119           300           299     9/7/2006       10/1/2016    4,117,190  Retail
   94                118           360           360    9/11/2006       9/11/2016    4,879,866  Multifamily
   95                119           312           311     9/8/2006       10/1/2016    4,151,896  Retail
   96                120           360           360   10/23/2006       11/1/2016    4,329,023  Mixed-Use
   97                116           300           296    6/12/2006       7/11/2016    3,995,516  Hotel
  97A1                                                                                          Hotel
  97A2                                                                                          Hotel
   98                117           360           360    7/26/2006       8/11/2016    4,662,630  Retail
   99                119             0             0     9/5/2006       10/1/2016    5,000,000  Self-Storage
  100                116           360           360    6/27/2006       7/11/2016    4,452,346  Retail
  101                120           360           360    11/8/2006      11/11/2016    4,259,018  Multifamily
 101A1                                                                                          Multifamily
 101A2                                                                                          Multifamily
 101A3                                                                                          Multifamily
 101A4                                                                                          Multifamily
 101A5                                                                                          Multifamily
 101A6                                                                                          Multifamily
 101A7                                                                                          Multifamily
 101A8                                                                                          Multifamily
 101A9                                                                                          Multifamily
 101A10                                                                                         Multifamily
 101A11                                                                                         Multifamily
  102                119           360           360    9/28/2006      10/11/2016    4,481,918  Retail
  103                117             0             0    7/21/2006       8/11/2016    4,864,987  Retail
 103A1                                                                                          Retail
 103A2                                                                                          Retail
 103A3                                                                                          Retail
 103A4                                                                                          Retail
 103A5                                                                                          Retail
 103A6                                                                                          Retail
 103A7                                                                                          Retail
  104                 57             0             0    7/21/2006       8/11/2011    4,861,024  Retail
 104A1                                                                                          Retail
 104A2                                                                                          Retail
  105                 84           360           360   10/13/2006      11/11/2013    4,590,539  Multifamily
  106                117             0             0    7/21/2006       8/11/2016    4,677,051  Retail
 106A1                                                                                          Retail
 106A2                                                                                          Retail
 106A3                                                                                          Retail
 106A4                                                                                          Retail
 106A5                                                                                          Retail
  107                119           360           360    9/28/2006       10/1/2016    4,120,533  Retail
  108                118             0             0     8/9/2006        9/1/2016    4,500,000  Industrial/Warehouse
  109                118           360           358    8/15/2006        9/1/2016    3,844,280  Office
  110                119           360           360    9/28/2006      10/11/2016    4,166,880  Multifamily
  111                118           360           360    9/11/2006       9/11/2016    4,129,118  Multifamily
  112                 57             0             0    7/21/2006       8/11/2011    4,278,447  Retail
 112A1                                                                                          Retail
 112A2                                                                                          Retail
  113                117           360           357    7/27/2006        8/1/2016    3,572,867  Self-Storage
  114                119           360           360    9/13/2006      10/11/2016    3,766,523  Retail
  115                119             0             0    9/15/2006      10/11/2016    3,715,849  Multifamily
 115A1                                                                                          Multifamily
 115A2                                                                                          Multifamily
 115A3                                                                                          Multifamily
  116                119           360           359    10/6/2006      10/11/2016    3,484,660  Retail
  117                117             0             0    7/21/2006       8/11/2016    4,088,893  Retail
 117A1                                                                                          Retail
 117A2                                                                                          Retail
 117A3                                                                                          Retail
 117A4                                                                                          Retail
 117A5                                                                                          Retail
 117A6                                                                                          Retail
 117A7                                                                                          Retail
 117A8                                                                                          Retail
 117A9                                                                                          Retail
 117A10                                                                                         Retail
  118                120           300           300   10/31/2006      11/11/2016    3,110,025  Hotel
  119                120           360           360    11/3/2006      11/11/2016    3,749,308  Retail
  120                119           360           359    9/20/2006       10/1/2016    3,380,634  Multifamily
  121                118           300           298    8/22/2006        9/1/2016    3,070,423  Retail
  122                119             0             0     9/5/2006       10/1/2016    3,900,000  Self-Storage
  123                119           360           360    9/21/2006      10/11/2016    3,531,886  Office
  124                119           360           360    9/27/2006      10/11/2016    3,338,180  Industrial/Warehouse
  125                120           360           360    11/9/2006      11/11/2016    3,511,269  Multifamily
 125A1                                                                                          Multifamily
 125A2                                                                                          Multifamily
  126                119           360           359    9/21/2006      10/11/2016    3,184,389  Self-Storage
  127                117           240           237     8/7/2006       8/11/2016    2,458,818  Retail
  128                119           360           360    10/3/2006      10/11/2016    3,225,838  Self-Storage
  129                117           360           360    7/18/2006       8/11/2016    3,427,659  Industrial/Warehouse
  130                118           360           360    8/18/2006       9/11/2016    3,310,354  Office
  131                118           360           360    8/18/2006       9/11/2016    3,210,791  Self-Storage
  132                118           360           358     9/1/2006        9/1/2016    3,063,007  Mobile Home Park
  133                 57             0             0    7/21/2006       8/11/2011    3,586,021  Retail
 133A1                                                                                          Retail
 133A2                                                                                          Retail
 133A3                                                                                          Retail
  134                119           360           360    9/29/2006       10/1/2016    3,150,301  Retail
  135                118           360           360    9/11/2006       9/11/2016    3,261,065  Multifamily
  136                119             0             0    10/4/2006      10/11/2016    3,440,000  Self-Storage
  137                120           300           300   11/10/2006      11/11/2016    2,661,735  Retail
  138                 57             0             0    7/21/2006       8/11/2011    3,386,165  Retail
 138A1                                                                                          Retail
 138A2                                                                                          Retail
 138A3                                                                                          Retail
  139                117             0             0    7/21/2006       8/11/2016    3,360,685  Retail
 139A1                                                                                          Retail
 139A2                                                                                          Retail
 139A3                                                                                          Retail
 139A4                                                                                          Retail
 139A5                                                                                          Retail
  140                120             0             0   10/30/2006      11/11/2016    3,340,000  Retail
  141                120           360           360   10/31/2006      11/11/2016    2,927,558  Retail
  142                120             0             0   10/25/2006      11/11/2016    3,275,000  Retail
  143                117           360           360    7/11/2006        8/1/2016    2,813,452  Multifamily
  144                 57             0             0    7/21/2006       8/11/2011    3,119,763  Retail
 144A1                                                                                          Retail
 144A2                                                                                          Retail
 144A3                                                                                          Retail
  145                120           360           360   10/24/2006      11/11/2016    2,745,792  Retail
  146                119           360           359    9/21/2006       10/1/2016    2,650,802  Office
  147                119           360           359    9/14/2006      10/11/2016    2,638,590  Self-Storage
  148                119           360           360    9/26/2006      10/11/2016    2,711,602  Office
  149                120           360           360   10/13/2006      11/11/2016    2,528,962  Office
  150                118           360           358     8/8/2006        9/1/2016    2,451,093  Retail
  151                119           360           360    9/13/2006      10/11/2016    2,572,259  Retail
  152                 57             0             0    7/21/2006       8/11/2011    2,745,131  Retail
 152A1                                                                                          Retail
 152A2                                                                                          Retail
  153                119           360           360   10/11/2006      10/11/2016    2,496,767  Self-Storage
  154                113           360           360    3/13/2006       4/11/2016    2,397,207  Retail
  155                118           360           358    8/25/2006       9/11/2016    2,289,869  Self-Storage
 155A1                                                                                          Self-Storage
 155A2                                                                                          Self-Storage
  156                120           360           360   10/31/2006      11/11/2016    2,275,400  Retail
 156A1                                                                                          Retail
 156A2                                                                                          Retail
  157                118           300           298    8/21/2006       9/11/2016    2,082,321  Hotel
  158                119           360           360    9/19/2006      10/11/2016    2,454,446  Retail
  159                 57             0             0    7/21/2006       8/11/2011    2,599,151  Retail
 159A1                                                                                          Retail
 159A2                                                                                          Retail
  160                 79           360           355    5/26/2006       6/11/2013    2,361,904  Retail
  161                119           240           239    10/3/2006      10/11/2016    1,661,300  Office
  162                118           360           360    9/11/2006       9/11/2016    2,289,783  Multifamily
  163                120           360           360   10/25/2006      11/11/2016    2,058,407  Office
  164                118           360           360    9/11/2006       9/11/2016    2,271,015  Multifamily
  165                113           360           353    3/29/2006       4/11/2016    2,041,731  Retail
  166                 59           360           359    9/14/2006      10/11/2011    2,218,610  Multifamily
  167                118           360           360    9/11/2006       9/11/2016    2,158,403  Multifamily
  168                119           360           360    9/13/2006      10/11/2016    2,112,928  Retail
  169                117           360           357    7/13/2006       8/11/2016    1,935,434  Office
  170                 57             0             0    7/21/2006       8/11/2011    2,216,075  Retail
 170A1                                                                                          Retail
 170A2                                                                                          Retail
  171                119           360           359    9/29/2006      10/11/2016    1,854,895  Retail
  172                120           360           360    11/3/2006      11/11/2016    1,791,581  Office
  173                118           360           360     9/8/2006       9/11/2016    1,834,178  Retail
  174                119           360           359    9/29/2006      10/11/2016    1,668,871  Hotel
  175                118           360           358     9/1/2006       9/11/2016    1,668,715  Retail
  176                 59           360           359    9/21/2006      10/11/2011    1,715,008  Office
  177                118           360           360    8/30/2006       9/11/2016    1,627,703  Retail
  178                116           360           356    6/22/2006        7/1/2016    1,459,676  Retail
  179                119           360           360    9/20/2006      10/11/2016    1,484,167  Retail
  180                 59           360           359    9/21/2006      10/11/2011    1,428,390  Office
  181                120           360           360   10/16/2006      11/11/2016    1,070,878  Office
  182                119           360           360   10/10/2006      10/11/2016    1,064,651  Multifamily
  183                120           360           360   10/23/2006      11/11/2016      863,411  Retail
  184                119           360           360     9/8/2006       10/1/2016      777,850  Retail


                                       MONTHLY        GROSS        TOTAL      U/W NET      U/W NET       U/W       CUT-OFF
CONTROL          PREPAYMENT             DEBT         INCOME      EXPENSES    OPERATING       CASH        NCF      DATE U/W
  NO.            PROVISIONS          SERVICE ($)       ($)          ($)      INCOME ($)    FLOW ($)   DSCR (X)  NCF DSCR (X)
----------------------------------------------------------------------------------------------------------------------------

   1     L(26),D(91),O(3)           2,377,079.21   82,168,107   30,300,321   51,867,786   49,658,881      1.74          1.74
   2     L(27),D(90),O(3)           1,491,189.12  132,802,973   48,989,265   83,813,708   81,661,628      1.86          1.86
   3     YM1%(25),DorYM1%(32),O(3)  1,711,918.04  606,595,926  492,778,449  113,817,477  111,783,127      2.72          3.31
  3A1
  3A2
  3A3
  3A4
  3A5
  3A6
  3A7
  3A8
  3A9
  3A10
  3A11
  3A12
  3A13
  3A14
  3A15
  3A16
  3A17
  3A18
  3A19
  3A20
  3A21
  3A22
  3A23
  3A24
  3A25
  3A26
  3A27
  3A28
  3A29
  3A30
  3A31
  3A32
  3A33
  3A34
  3A35
  3A36
  3A37
  3A38
  3A39
  3A40
  3A41
  3A42
  3A43
  3A44
  3A45
  3A46
  3A47
  3A48
  3A49
  3A50
  3A51
  3A52
  3A53
  3A54
  3A55
  3A56
  3A57
  3A58
  3A59
  3A60
  3A61
  3A62
  3A63
  3A64
  3A65
  3A66
  3A67
  3A68
  3A69
  3A70
  3A71
  3A72
  3A73
  3A74
  3A75
  3A76
  3A77
  3A78
  3A79
  3A80
  3A81
  3A82
   4     L(26),D(88),O(6)             564,660.70   30,910,940    9,997,272   20,913,668   19,327,238      2.85          2.85
   5     L(26),D(22),DorYM(6),O(6)    564,729.35   20,041,299    9,221,761   10,819,538    9,316,923      1.37          1.37
   6     L(26),D(90),O(4)             605,349.01   12,845,219    4,230,118    8,615,102    8,508,900      1.17          1.38
  6A1
  6A2
   7     L(25),D(34),O(1)             498,046.18   13,504,271    5,456,453    8,047,818    7,160,225      1.20          1.20
  7A1
  7A2
  7A3
  7A4
  7A5
  7A6
  7A7
  7A8
  7A9
  7A10
  7A11
  7A12
  7A13
  7A14
  7A15
  7A16
  7A17
  7A18
  7A19
  7A20
  7A21
  7A22
  7A23
  7A24
  7A25
  7A26
  7A27
  7A28
  7A29
  7A30
  7A31
  7A32
  7A33
  7A34
  7A35
  7A36
  7A37
  7A38
   8     L(25),D(93),O(2)             449,051.39   10,027,738    3,131,767    6,895,971    6,446,213      1.20          1.20
  8A1
  8A2
  8A3
  8A4
  8A5
  8A6
  8A7
  8A8
  8A9
  8A10
  8A11
  8A12
  8A13
  8A14
   9     L(26),D(22),DorYM(6),O(6)    316,443.17   11,734,053    5,521,222    6,212,831    5,317,074      1.40          1.40
   10    L(26),D(91),O(3)             298,362.31   13,157,668    6,643,903    6,513,765    5,627,958      1.57          1.86
  10A1
  10A2
  10A3
  10A4
  10A5
   11    L(25),D(92),O(3)             282,622.70    6,739,458    2,977,073    3,762,385    3,679,935      1.27          1.27
  11A1
  11A2
  11A3
  11A4
  11A5
  11A6
  11A7
  11A8
  11A9
 11A10
   12    L(25),YM1%(143),O(12)        279,325.15    4,330,301      173,212    4,157,089    4,022,349      1.20          1.20
   13    L(27),D(90),O(3)             245,247.21    6,039,405    2,656,775    3,382,630    3,362,435      1.14          1.34
   14    L(28),YM1%(28),O(4)          183,049.19    5,167,162    2,152,233    3,014,930    2,669,573      1.22          1.22
  14A1
  14A2
   15    YM1%(57),O(3)                171,558.45    4,441,864    2,073,703    2,368,161    2,368,161      1.15          1.15
   16    L(36),D(81),O(3)             173,605.96   22,015,221    6,282,592   15,732,629   15,100,523      1.05          1.32
   17    L(25),DorYM(92),O(3)         143,275.17    3,107,344      992,901    2,114,443    2,104,269      1.22          1.22
   18    L(48),D(70),O(2)             149,631.69    3,239,336      994,155    2,245,181    2,177,581      1.21          1.44
   19    L(25),D(93),O(2)             142,408.78    2,538,453      428,907    2,109,546    1,964,321      1.15          1.35
   20    L(27),D(90),O(3)             141,602.73    3,334,555    1,493,436    1,841,119    1,783,619      1.21          1.21
  20A1
  20A2
  20A3
   21    L(48),D(11),O(1)             113,667.08    2,969,018    1,232,076    1,736,942    1,656,074      1.21          1.21
   22    L(25),D(92),O(3)             118,591.20    3,001,906    1,170,673    1,831,233    1,713,988      1.20          1.20
   23    L(26),D(90),O(4)             129,904.92    2,604,469      639,188    1,965,281    1,871,205      1.20          1.43
   24    L(26),D(91),O(3)             110,809.61    3,023,786    1,248,752    1,775,034    1,597,514      1.20          1.20
   25    L(48),D(69),O(3)             130,929.53    3,122,701      782,585    2,340,116    2,127,669      1.35          1.35
   26    L(48),D(70),O(2)             126,474.40    2,780,226      928,566    1,851,660    1,784,460      1.18          1.40
   27    L(25),D(32),O(3)             118,246.15    3,473,684    1,665,380    1,808,304    1,644,301      1.16          1.38
   28    L(27),D(90),O(3)             110,315.78    2,730,261      903,293    1,826,968    1,760,489      1.33          1.33
   29    L(48),D(69),O(3)             106,534.32    2,218,979      609,196    1,609,783    1,545,635      1.21          1.44
   30    YM(117),O(3)                  97,683.78    2,094,919      525,047    1,569,872    1,497,279      1.28          1.50
   31    L(48),D(72)                   78,320.38    2,181,661      971,703    1,209,958    1,151,202      1.22          1.22
   32    L(48),D(11),O(1)              75,661.46    2,133,982      892,713    1,241,269    1,199,365      1.32          1.32
   33    L(25),YM1%(92),O(3)           88,703.47    2,118,721      757,330    1,361,390    1,281,390      1.20          1.42
   34    L(25),D(92),O(3)              90,793.32    2,186,516      727,672    1,458,844    1,363,765      1.25          1.45
   35    L(25),D(92),O(3)              70,934.20    2,012,258      738,014    1,274,244    1,201,249      1.41          1.41
   36    YM(117),O(3)                  86,838.79    2,019,805      689,379    1,330,426    1,258,424      1.21          1.40
   37    L(26),D(34)                   74,693.19    2,057,502      677,739    1,379,763    1,233,289      1.38          1.38
   38    L(48),D(72)                   82,737.97    2,148,247      867,500    1,280,747    1,217,747      1.23          1.23
   39    L(24),YM1%(96)                80,765.81    2,571,176    1,286,464    1,284,712    1,185,758      1.22          1.45
   40    L(27),D(89),O(4)              80,223.75    1,524,167      402,333    1,121,834    1,086,590      1.13          1.33
   41    L(25),D(95)                   79,225.55    1,422,656      264,714    1,157,942    1,112,417      1.17          1.38
   42    L(27),D(87),O(6)              70,792.91    1,854,774      792,695    1,062,079    1,018,879      1.20          1.20
   43    L(29),D(88),O(3)              72,008.49    2,125,852    1,011,459    1,114,393    1,038,793      1.20          1.20
   44    L(48),D(69),O(3)              68,523.86    1,885,923      561,818    1,324,105    1,089,271      1.32          1.32
   45    YM(117),O(3)                  67,122.09    1,373,823      353,079    1,020,744      969,503      1.20          1.42
   46    L(25),D(91),O(4)              61,517.71    1,373,880      288,790    1,085,090    1,054,297      1.43          1.43
   47    L(26),D(54),O(4)              61,588.45    1,718,280      770,059      948,221      898,297      1.22          1.44
   48    L(48),D(11),O(1)              54,243.06    1,816,652      913,605      903,047      833,297      1.28          1.28
   49    YM(28),DorYM(89),O(3)         48,149.90      745,965       22,379      723,586      693,303      1.20          1.20
  49A1
  49A2
  49A3
  49A4
  49A5
  49A6
  49A7
  49A8
  49A9
 49A10
 49A11
 49A12
   50    L(48),YM1%(72)                55,122.21    1,190,303      403,022      787,281      766,548      1.16          1.35
   51    L(26),D(93),O(1)              53,094.68    2,355,545    1,481,022      874,523      776,710      1.22          1.46
   52    L(26),D(91),O(3)              54,040.68      750,000        3,750      746,250      746,250      1.15          1.36
   53    YM(117),O(3)                  51,899.44    1,267,319      347,223      920,095      799,047      1.28          1.28
   54    YM(28),DorYM(89),O(3)         44,759.72      677,320       20,320      657,000      644,488      1.20          1.20
  54A1
  54A2
  54A3
  54A4
  54A5
   55    L(48),D(11),O(1)              52,115.03    1,557,966      708,211      849,755      750,632      1.20          1.40
   56    L(26),D(94)                   50,307.88      948,453      163,949      784,504      744,189      1.23          1.47
   57    L(26),D(88),O(6)              49,834.22    1,107,544      313,353      794,191      734,118      1.23          1.46
   58    L(26),D(94)                   51,774.89    3,093,385    2,038,984    1,054,401      930,666      1.50          1.50
   59    L(48),D(72)                   49,124.16      906,592      183,143      723,449      704,955      1.20          1.20
   60    L(28),D(89),O(3)              50,391.11    1,016,732      231,598      785,134      725,693      1.20          1.20
   61    L(27),D(90),O(3)              49,882.57    1,046,206      309,979      736,227      721,057      1.20          1.41
   62    L(29),D(31)                   47,200.38    1,309,606      604,754      704,852      654,112      1.15          1.38
   63    L(30),D(87),O(3)              50,092.87    1,540,908      728,464      812,444      780,994      1.30          1.30
  63A1
  63A2
  63A3
  63A4
   64    YM(28),DorYM(89),O(3)         41,210.92      629,698       18,891      610,807      593,389      1.20          1.20
  64A1
  64A2
  64A3
  64A4
  64A5
   65    L(27),D(93)                   40,694.46      729,975       79,623      650,352      644,677      1.32          1.32
  65A1
  65A2
   66    YM(25),DorYM(32),O(3)         42,592.97    1,219,691      590,580      629,111      614,761      1.20          1.20
   67    YM(28),DorYM(89),O(3)         40,322.75      614,376       18,431      595,945      580,601      1.20          1.20
  67A1
  67A2
  67A3
  67A4
  67A5
  67A6
   68    L(26),D(91),O(3)              39,288.19      910,480      315,360      595,120      575,557      1.22          1.22
   69    L(61),YM(56),O(3)             46,374.09    1,124,472      383,955      740,517      696,408      1.25          1.25
   70    L(26),D(91),O(3)              44,918.08    1,175,940      412,358      763,582      739,088      1.37          1.37
   71    L(37),YM(80),O(3)             45,820.46    1,428,890      554,063      874,827      708,129      1.29          1.29
   72    L(25),D(94),O(1)              44,615.54    1,055,154      363,005      692,149      614,858      1.15          1.34
   73    L(25),D(92),O(3)              43,493.89      733,339       22,000      711,339      694,604      1.33          1.58
   74    L(26),D(88),O(6)              42,715.04      981,706      279,564      702,142      650,329      1.27          1.51
   75    L(48),D(72)                   43,481.77    1,249,982      531,355      718,627      638,929      1.22          1.22
   76    YM(28),DorYM(89),O(3)         37,013.70      568,725       17,062      551,663      532,954      1.20          1.20
  76A1
  76A2
  76A3
  76A4
  76A5
  76A6
  76A7
  76A8
  76A9
 76A10
   77    L(25),D(95)                   40,594.73      827,146      257,551      569,595      531,464      1.09          1.29
   78    L(48),D(72)                   32,756.64    1,051,321      536,115      515,206      479,390      1.22          1.22
   79    L(48),D(72)                   32,264.06    1,006,466      484,366      522,100      489,915      1.27          1.27
   80    L(28),D(89),O(3)              38,912.44    1,257,528      630,942      626,586      585,082      1.25          1.46
   81    YM(60),O(60)                  37,138.37      845,549      188,062      657,487      579,379      1.30          1.51
   82    L(28),D(89),O(3)              36,057.51      979,963      434,976      544,987      517,237      1.20          1.39
   83    L(48),D(72)                   35,753.55    1,250,944      671,608      579,336      536,164      1.25          1.46
   84    L(48),D(71),O(1)              38,416.47      650,746       27,265      623,481      598,281      1.30          1.30
   85    L(26),D(91),O(3)              34,548.13      490,014        2,450      487,564      487,564      1.18          1.39
   86    L(26),D(88),O(6)              28,173.44    1,236,316      635,989      600,326      564,664      1.67          1.67
   87    L(26),D(93),O(1)              34,193.16    1,186,690      644,875      541,815      492,315      1.20          1.40
   88    L(28),D(86),O(6)              33,075.20      738,481      220,201      518,280      476,201      1.20          1.41
   89    L(26),D(91),O(3)              33,354.16      656,318      121,400      534,918      515,232      1.29          1.29
   90    L(26),D(90),O(4)              32,723.72      868,201      357,397      510,804      473,935      1.21          1.21
   91    L(26),YM1%(91),O(3)           32,236.08      888,222      389,794      498,428      465,428      1.20          1.42
   92    L(26),D(91),O(3)              32,299.52      921,326      384,209      537,117      492,513      1.27          1.27
  92A1
  92A2
   93    L(26),D(91),O(3)              34,440.15    1,144,670      447,538      697,132      613,164      1.48          1.48
   94    L(48),D(72)                   31,949.69    1,466,229      921,110      545,119      486,117      1.27          1.48
   95    L(26),D(91),O(3)              33,758.96      633,678       87,317      546,361      509,914      1.26          1.26
   96    L(25),D(92),O(3)              30,675.51      774,601      275,968      498,633      465,743      1.27          1.27
   97    L(48),D(72)                   33,927.42    1,894,372    1,277,218      617,154      541,378      1.33          1.33
  97A1
  97A2
   98    L(28),D(86),O(6)              30,657.28      702,655      214,550      488,105      441,500      1.20          1.41
   99    L(26),D(91),O(3)              24,924.77      815,055      262,903      552,152      545,036      1.82          1.82
  100    L(48),D(68),O(4)              30,655.90      636,206      159,007      477,199      444,699      1.21          1.41
  101    L(25),D(92),O(3)              30,461.41      664,749      212,328      452,421      438,621      1.20          1.20
 101A1
 101A2
 101A3
 101A4
 101A5
 101A6
 101A7
 101A8
 101A9
 101A10
 101A11
  102    L(48),D(68),O(4)              29,996.74      659,217      189,073      470,144      443,620      1.23          1.45
  103    YM(28),DorYM(89),O(3)         25,447.88      392,529       11,776      380,753      366,420      1.20          1.20
 103A1
 103A2
 103A3
 103A4
 103A5
 103A6
 103A7
  104    YM(28),DorYM(29),O(3)         25,874.83      398,877       11,966      386,910      372,598      1.20          1.20
 104A1
 104A2
  105    L(48),D(35),O(1)              28,553.14      878,792      425,832      452,960      415,200      1.21          1.45
  106    YM(28),DorYM(89),O(3)         24,464.82      373,989       11,220      362,770      352,265      1.20          1.20
 106A1
 106A2
 106A3
 106A4
 106A5
  107    L(26),D(91),O(3)              27,602.16      643,942      199,753      444,189      398,270      1.20          1.41
  108    L(27),D(90),O(3)              23,801.04      759,009      231,977      527,032      397,915      1.39          1.39
  109    L(27),D(90),O(3)              27,707.27      719,428      241,465      477,963      431,824      1.30          1.30
  110    L(26),YM1%(91),O(3)           26,851.90      704,167      288,017      416,150      386,150      1.20          1.41
  111    L(48),D(72)                   27,034.35    1,333,806      868,255      465,551      419,864      1.29          1.51
  112    YM(28),DorYM(29),O(3)         22,773.82      355,624       10,669      344,955      327,943      1.20          1.20
 112A1
 112A2
  113    L(28),D(89),O(3)              25,451.78      779,076      294,419      484,657      472,900      1.55          1.55
  114    L(26),D(88),O(6)              24,323.84      654,499      213,060      441,439      371,601      1.27          1.51
  115    L(26),D(93),O(1)              24,907.07      666,722      282,186      384,536      362,536      1.42          1.42
 115A1
 115A2
 115A3
  116    L(48),D(72)                   24,766.39      371,910       11,157      360,753      360,753      1.21          1.21
  117    YM(28),DorYM(89),O(3)         21,388.27      330,595        9,918      320,677      307,968      1.20          1.20
 117A1
 117A2
 117A3
 117A4
 117A5
 117A6
 117A7
 117A8
 117A9
 117A10
  118    L(25),D(92),O(3)              26,066.27    1,166,972      571,206      595,766      530,159      1.69          1.69
  119    L(48),D(71),O(1)              24,343.24      351,000        3,510      347,490      346,008      1.18          1.39
  120    L(26),D(91),O(3)              23,674.29      508,976      156,113      352,863      346,438      1.22          1.22
  121    L(27),D(90),O(3)              25,780.64      368,483       11,054      357,429      355,343      1.15          1.15
  122    L(26),D(91),O(3)              19,441.32      697,922      236,983      460,939      453,384      1.94          1.94
  123    L(48),YM1%(72)                23,658.99      611,522      234,939      376,583      341,538      1.20          1.41
  124    L(26),D(91),O(3)              22,967.59      447,845       85,682      362,163      336,686      1.22          1.43
  125    L(25),D(94),O(1)              22,628.01      620,120      258,642      361,478      341,728      1.26          1.48
 125A1
 125A2
  126    L(48),D(72)                   22,579.67      497,208      154,506      342,702      335,582      1.24          1.24
  127    L(28),D(91),O(1)              27,260.44      981,920      308,394      673,526      670,846      2.05          2.05
  128    L(48),D(72)                   21,602.79      666,548      228,586      437,962      423,236      1.63          1.95
  129    L(24),YM1%(93),O(3)           22,544.94      551,470      164,428      387,042      327,709      1.21          1.41
  130    L(48),D(72)                   22,331.44      473,741      133,250      340,491      325,057      1.21          1.42
  131    L(48),D(72)                   22,259.56      582,956      241,184      341,772      332,341      1.24          1.45
  132    YM(117),O(3)                  21,839.07      694,990      366,611      328,379      318,329      1.21          1.21
  133    YM(28),DorYM(29),O(3)         19,088.09      296,485        8,895      287,591      274,869      1.20          1.20
 133A1
 133A2
 133A3
  134    YM(117),O(3)                  21,421.18      399,654       64,950      334,704      316,136      1.23          1.45
  135    L(48),D(72)                   21,350.99    1,259,494      904,515      354,979      311,123      1.21          1.42
  136    L(26),YM1%(93),O(1)           18,368.96      469,271      189,086      280,185      264,879      1.20          1.20
  137    L(25),D(92),O(3)              22,349.76      344,658       10,340      334,319      325,026      1.21          1.21
  138    YM(28),DorYM(29),O(3)         18,024.27      282,890        8,487      274,404      259,550      1.20          1.20
 138A1
 138A2
 138A3
  139    YM(28),DorYM(89),O(3)         17,579.14      270,008        8,100      261,908      253,120      1.20          1.20
 139A1
 139A2
 139A3
 139A4
 139A5
  140    L(48),D(69),O(3)              16,875.50      261,660        5,233      256,427      254,945      1.26          1.26
  141    L(48),D(71),O(1)              19,891.37      391,435       67,202      324,233      300,581      1.26          1.48
  142    L(25),D(92),O(3)              16,602.43      264,600        7,938      256,662      255,180      1.28          1.28
  143    L(28),D(89),O(3)              20,247.23      953,193      605,113      348,080      298,080      1.23          1.41
  144    YM(28),DorYM(29),O(3)         16,606.24      267,686        8,031      259,655      239,130      1.20          1.20
 144A1
 144A2
 144A3
  145    L(25),D(92),O(3)              18,546.22      394,735       73,707      321,027      295,850      1.33          1.57
  146    L(26),D(91),O(3)              19,147.76      494,997      136,049      358,948      325,772      1.42          1.42
  147    L(48),D(71),O(1)              18,825.90      491,328      183,178      308,150      301,362      1.33          1.33
  148    L(36),YM1%(81),O(3)           18,005.81      414,610      121,871      292,739      277,508      1.28          1.52
  149    L(25),D(94),O(1)              17,989.93      318,076       47,499      270,576      258,086      1.20          1.20
  150    L(27),D(90),O(3)              17,652.42      414,813      115,084      299,729      274,884      1.30          1.30
  151    L(26),D(88),O(6)              16,611.41      305,346       44,602      260,744      246,051      1.23          1.47
  152    YM(28),DorYM(29),O(3)         14,612.10      225,830        6,775      219,055      210,415      1.20          1.20
 152A1
 152A2
  153    L(26),YM1%(93),O(1)           16,729.87      455,392      186,324      269,068      263,206      1.31          1.52
  154    L(48),D(72)                   16,327.00      362,177      107,386      254,791      242,596      1.24          1.46
  155    L(27),D(90),O(3)              16,187.86      549,217      277,834      271,383      256,713      1.32          1.32
 155A1
 155A2
  156    L(25),D(95)                   16,628.00      360,236       92,826      267,410      253,918      1.27          1.27
 156A1
 156A2
  157    L(48),D(72)                   17,793.76    1,996,543    1,613,820      382,723      302,861      1.42          1.42
  158    L(48),D(72)                   16,308.62      322,106       64,121      257,985      252,365      1.29          1.49
  159    YM(28),DorYM(29),O(3)         13,835.06      214,484        6,435      208,049      199,225      1.20          1.20
 159A1
 159A2
  160    L(48),D(36)                   16,042.48      381,368      141,185      240,183      224,285      1.17          1.17
  161    L(26),D(91),O(3)              18,419.21      830,295      405,690      424,605      406,891      1.84          1.84
  162    L(48),D(72)                   14,991.78      849,771      585,532      264,239      238,297      1.32          1.55
  163    L(24),YM1%(93),O(3)           14,585.91      425,964      122,711      303,253      266,813      1.52          1.52
  164    L(48),D(72)                   14,868.89      901,224      640,896      260,328      229,921      1.29          1.50
  165    L(48),D(71),O(1)              14,543.87      366,563       91,137      275,426      243,729      1.40          1.40
  166    L(26),D(31),O(3)              14,731.05      587,988      310,614      277,374      251,874      1.42          1.42
  167    L(48),D(72)                   14,131.59      604,549      375,539      229,010      206,306      1.22          1.42
  168    L(26),D(88),O(6)              13,645.08      309,417       84,108      225,309      199,075      1.22          1.45
  169    L(28),D(91),O(1)              14,119.93      300,997       82,567      218,430      202,720      1.20          1.20
  170    YM(28),DorYM(29),O(3)         11,795.98      187,471        5,624      181,847      173,638      1.23          1.23
 170A1
 170A2
  171    L(48),D(71),O(1)              12,908.57      301,538       84,722      216,816      206,909      1.34          1.34
  172    L(25),D(94),O(1)              12,275.95      271,868       79,074      192,794      178,937      1.21          1.42
  173    L(48),YM1%(72)                12,210.14      247,002       59,086      187,916      172,819      1.18          1.36
  174    L(26),D(91),O(3)              12,082.68      468,054      215,730      252,324      227,559      1.57          1.57
  175    L(27),D(92),O(1)              12,082.68      255,233       61,489      193,744      174,415      1.20          1.20
  176    L(26),D(34)                   11,355.80      323,972      116,048      207,924      187,897      1.38          1.38
  177    L(48),D(72)                   10,829.10      230,612       64,275      166,337      155,584      1.20          1.40
  178    L(29),D(88),O(3)              10,655.87      391,458      217,695      173,763      166,012      1.30          1.30
  179    L(48),D(72)                   10,137.88      201,095       50,925      150,170      143,489      1.18          1.38
  180    L(26),D(34)                    9,457.98      279,194      111,195      167,999      154,101      1.36          1.36
  181    L(25),D(94),O(1)               7,777.95      175,745       40,174      135,571      128,190      1.37          1.37
  182    L(48),D(72)                    7,233.23      184,431       66,776      117,655      109,655      1.26          1.49
  183    L(25),D(92),O(3)               6,218.33       94,516        2,835       91,680       85,824      1.15          1.15
  184    L(26),D(91),O(3)               5,441.90       85,500          850       84,650       84,650      1.30          1.50


                                    CUT-OFF  SCHEDULED    HOSPITALITY                                              SQ FEET,
CONTROL     APPRAISED    APPRAISAL    DATE   MATURITY/      AVERAGE              YEAR                YEAR        PADS, ROOMS
  NO.       VALUE ($)       DATE    LTV (%)   LTV (%)   DAILY RATE ($)           BUILT            RENOVATED        OR UNITS
----------------------------------------------------------------------------------------------------------------------------

   1     1,100,000,000   8/22/2006     43.2       43.2               0                   1982               N/A    994,757
   2     1,590,000,000    8/1/2006     42.5       42.5               0                   1973        1991, 2006  1,876,972
   3       785,120,000   8/31/2006     63.7       61.7               0                Various           Various      8,492
  3A1       25,850,000   8/31/2006                                   0             1965, 1975              2005        180
  3A2       25,720,000   8/31/2006                                   0                   1968              1996        150
  3A3       24,640,000   8/31/2006                                   0                   1995              2005         78
  3A4       23,080,000   8/31/2006                                   0                   1981              1991        180
  3A5       18,840,000    3/1/2007                                   0                   1970              2004        135
  3A6       17,380,000   8/31/2006                                   0                   1958              2002        220
  3A7       16,880,000   8/31/2006                                   0                   1969              2001        120
  3A8       16,380,000   8/31/2006                                   0                   1967              1987        133
  3A9       15,980,000   8/31/2006                                   0                   1966              2001        132
  3A10      15,920,000    1/1/2007                                   0                   1997              2006        124
  3A11      15,890,000   8/31/2006                                   0                   2000              2006        127
  3A12      15,730,000   8/31/2006                                   0                   1985              1995        181
  3A13      15,080,000   8/31/2006                                   0             1967, 1975              1998        200
  3A14      14,920,000   8/31/2006                                   0                   1967         2005-2006        103
  3A15      14,910,000   8/31/2006                                   0                   1990               NAP        120
  3A16      13,890,000   8/31/2006                                   0                   1988               NAP        190
  3A17      13,270,000   8/31/2006                                   0                   1985               NAP        120
  3A18      13,200,000   8/31/2006                                   0                   1984               NAP        126
  3A19      12,890,000   8/31/2006                                   0                   1981              2004        118
  3A20      12,280,000   8/31/2006                                   0                   1975        1992, 1997         96
  3A21      12,080,000   8/31/2006                                   0                   1970          Mid 90's        129
  3A22      11,730,000   8/31/2006                                   0                   1985              1997        108
  3A23      11,730,000   8/31/2006                                   0                   1979        1991, 2004        157
  3A24      11,640,000   8/31/2006                                   0                   1963        1996, 2002        132
  3A25      11,280,000   8/31/2006                                   0                   1966        1984, 2006        124
  3A26      11,040,000   8/31/2006                                   0                   1969              1998         93
  3A27      10,950,000   8/31/2006                                   0                   1975              1997         98
  3A28      10,940,000   8/31/2006                                   0                   1974              2004        124
  3A29      10,830,000   8/31/2006                                   0                   1968        1986, 1993        101
  3A30      10,270,000   8/31/2006                                   0                   1995              2002        175
  3A31      10,040,000   8/31/2006                                   0                   1970              1985        125
  3A32      10,030,000   8/31/2006                                   0                   1971              2004        142
  3A33       9,720,000   8/31/2006                                   0                   1965              1989         72
  3A34       9,690,000   8/31/2006                                   0                   1965               NAP        120
  3A35       9,320,000   8/31/2006                                   0                   1979              2002        100
  3A36       9,240,000   8/31/2006                                   0                   1965              1998        117
  3A37       9,030,000   8/31/2006                                   0                   1969               NAP        103
  3A38       8,720,000   8/31/2006                                   0                   1972               NAP        120
  3A39       8,500,000   8/31/2006                                   0                   1966              2004         60
  3A40       8,370,000   8/31/2006                                   0                   1988               NAP        118
  3A41       7,900,000   8/31/2006                                   0             1968, 1984              1995        108
  3A42       7,730,000   8/31/2006                                   0                   1949               NAP         93
  3A43       7,570,000   8/31/2006                                   0                   1979               NAP        100
  3A44       7,530,000   8/31/2006                                   0                   1985               NAP        100
  3A45       7,500,000   8/31/2006                                   0                   1979              1987        100
  3A46       7,370,000   8/31/2006                                   0                   1967  1989, 1996, 2005        109
  3A47       7,160,000   8/31/2006                                   0                   1969              1990         64
  3A48       7,160,000   8/31/2006                                   0                   1970              1995         89
  3A49       7,060,000   8/31/2006                                   0                   1972              1996         76
  3A50       7,030,000   8/31/2006                                   0                   1969        1990, 2003         67
  3A51       7,010,000   8/31/2006                                   0                   1980              2002        100
  3A52       7,000,000   8/31/2006                                   0                   1965              2006        126
  3A53       6,880,000   8/31/2006                                   0                   1975              1995         87
  3A54       6,820,000   8/31/2006                                   0                   1966              1991         67
  3A55       6,570,000   8/31/2006                                   0                   1967        Early 90's         63
  3A56       6,460,000   8/31/2006                                   0                   1963              2005         80
  3A57       6,400,000   8/31/2006                                   0                   1998               NAP        106
  3A58       6,040,000   8/31/2006                                   0                   1980               NAP         78
  3A59       5,940,000   8/31/2006                                   0                   1975              2001         72
  3A60       5,930,000   8/31/2006                                   0                   1968              2002         70
  3A61       5,820,000   8/31/2006                                   0                   1973               NAP         60
  3A62       5,750,000    3/1/2007                                   0                   1966              2006         74
  3A63       5,750,000   8/31/2006                                   0                   1973              2004         85
  3A64       5,690,000   8/31/2006                                   0                   1969              2005         86
  3A65       5,670,000   8/31/2006                                   0                   1986               NAP         66
  3A66       5,360,000   8/31/2006                                   0                   1948              2006         74
  3A67       5,240,000   8/31/2006                                   0                   1984              2005         70
  3A68       5,180,000   8/31/2006                                   0                   1984              1995        100
  3A69       5,040,000   8/31/2006                                   0                   1971              1998         74
  3A70       4,980,000   8/31/2006                                   0                   1984               NAP         50
  3A71       4,590,000   8/31/2006                                   0                   1963              2006         98
  3A72       4,460,000   8/31/2006                                   0                   1971        1992, 2005         70
  3A73       4,460,000   8/31/2006                                   0                   1973        Early 90's         82
  3A74       4,370,000   8/31/2006                                   0                   1964              1998         85
  3A75       4,310,000   8/31/2006                                   0                   1985               NAP         64
  3A76       4,000,000   8/31/2006                                   0                   1985               NAP         50
  3A77       3,590,000    9/1/2006                                   0                   1965              1997         87
  3A78       3,390,000   8/31/2006                                   0                   1969        1994, 2001         53
  3A79       3,240,000   8/31/2006                                   0                   1967              2005         66
  3A80       2,490,000   8/31/2006                                   0                   1961              1980         72
  3A81       2,420,000   8/31/2006                                   0                   1967              2005         70
  3A82       2,380,000   8/31/2006                                   0                   1965               NAP         50
   4       382,000,000    9/1/2006     31.8       31.8               0        1988-1990; 1999               N/A    758,364
   5       170,000,000    8/1/2006     68.2       68.2               0             1970, 1973        1980, 1998    827,252
   6       144,900,000     Various     69.0       66.6               0                Various               N/A    531,008
  6A1       94,000,000  10/24/2006                                   0                   1998               N/A    349,854
  6A2       50,900,000   9/12/2006                                   0                   2000               N/A    181,154
   7       120,595,000     Various     80.0       80.0               0                Various               N/A  1,061,763
  7A1       13,800,000   8/21/2006                                   0                   2005               N/A     48,159
  7A2        9,600,000   8/23/2006                                   0             1983, 1996               N/A     77,674
  7A3        7,300,000   8/21/2006                                   0             1970, 1984               N/A    178,174
  7A4        6,500,000   8/31/2006                                   0                   1970               N/A     25,531
  7A5        5,780,000    9/1/2006                                   0                   1993               N/A     66,050
  7A6        5,750,000   6/22/2006                                   0                   2003               N/A     16,151
  7A7        5,700,000    6/1/2006                                   0                   1997               N/A     21,612
  7A8        5,390,000   8/31/2006                                   0                   1993               N/A     55,090
  7A9        4,700,000   8/21/2006                                   0                   1996               N/A     39,444
  7A10       4,200,000   10/4/2006                                   0                   2002               N/A     19,160
  7A11       3,650,000   8/29/2006                                   0                   1980               N/A     40,708
  7A12       3,600,000   8/21/2006                                   0                   1996               N/A     32,041
  7A13       3,530,000   8/30/2006                                   0                   1994               N/A     46,690
  7A14       3,400,000   8/21/2006                                   0                   1998               N/A     16,240
  7A15       3,050,000   10/4/2006                                   0                   2002               N/A     14,000
  7A16       2,930,000   8/21/2006                                   0                   2000               N/A     15,310
  7A17       2,750,000   8/29/2006                                   0                   2002               N/A     36,580
  7A18       2,700,000   8/21/2006                                   0                   1997               N/A     21,217
  7A19       2,675,000   8/21/2006                                   0                   1958              2002     48,680
  7A20       2,500,000   8/30/2006                                   0                   2002               N/A     14,512
  7A21       2,300,000   8/30/2006                                   0                   2001               N/A     13,330
  7A22       2,040,000   8/31/2006                                   0                   2002               N/A     21,472
  7A23       2,010,000   8/21/2006                                   0                   1992               N/A     26,800
  7A24       1,700,000    8/8/2006                                   0                   2000               N/A     12,219
  7A25       1,700,000   8/23/2006                                   0                   1996               N/A     23,467
  7A26       1,500,000   8/21/2006                                   0                   1998               N/A      8,432
  7A27       1,500,000   8/25/2006                                   0                   1990               N/A     28,750
  7A28       1,400,000   8/23/2006                                   0                   2001               N/A      8,695
  7A29       1,390,000   8/29/2006                                   0                   2005               N/A      6,610
  7A30       1,170,000   8/23/2006                                   0                   1989               N/A     16,980
  7A31       1,050,000   8/21/2006                                   0                   2001               N/A      7,204
  7A32         800,000   8/25/2006                                   0                   1998               N/A     13,914
  7A33         660,000   8/25/2006                                   0                   1992               N/A     10,368
  7A34         630,000   8/21/2006                                   0                   1999               N/A      4,415
  7A35         570,000   8/23/2006                                   0                   1988               N/A      8,344
  7A36         350,000   8/23/2006                                   0                   1955              1990      8,125
  7A37         190,000   8/23/2006                                   0                   1990               N/A      5,865
  7A38         130,000   8/23/2006                                   0                   1990               N/A      3,750
   8       107,700,000     Various     79.9       79.9               0                Various           Various    600,178
  8A1       34,500,000   7/31/2006                                   0                   1986              2006    137,012
  8A2       13,000,000   8/25/2006                                   0                   1987               N/A     76,724
  8A3       11,500,000   8/16/2006                                   0                   1986               N/A    103,411
  8A4       10,000,000   7/24/2006                                   0                   1986               N/A     83,277
  8A5        7,400,000   7/24/2006                                   0                   1986               N/A     49,569
  8A6        6,700,000    8/4/2006                                   0                   1986               N/A     18,500
  8A7        5,200,000    8/2/2006                                   0                   2006               N/A     13,477
  8A8        3,100,000   8/15/2006                                   0                   2002               N/A     11,531
  8A9        3,000,000    8/7/2006                                   0                   1970               N/A     26,925
  8A10       4,300,000    8/1/2006                                   0                   1964               N/A     31,960
  8A11       2,950,000   7/24/2006                                   0             1969, 1985               N/A     19,957
  8A12       2,200,000   7/24/2006                                   0                   1997               N/A      6,039
  8A13       2,100,000    8/1/2006                                   0                   1983               N/A     16,300
  8A14       1,750,000   7/24/2006                                   0                   2003               N/A      5,496
   9        94,090,000   10/5/2006     69.1       69.1               0             1984, 1985               N/A    494,012
   10       81,700,000     Various     61.2       55.6          163.10                Various           Various        375
  10A1      18,400,000   8/15/2006                              199.03                   1988              2003         70
  10A2      16,600,000   8/16/2006                              135.34                   1941              2005         98
  10A3      19,700,000   8/15/2006                              190.00                   2005               N/A         54
  10A4      13,700,000   8/15/2006                              132.63                   1970              2001        100
  10A5      13,300,000   8/15/2006                              155.05                   1986              2001         53
   11       58,210,000     Various     80.0       74.9               0                Various           Various      1,649
  11A1       9,250,000   9/12/2006                                   0                   1972               N/A        211
  11A2       8,100,000   9/21/2006                                   0                   1971              2005        238
  11A3       6,700,000   9/19/2006                                   0                   1964               N/A        161
  11A4       6,800,000   9/19/2006                                   0                   1978               N/A        227
  11A5       6,700,000   9/12/2006                                   0       1950, 1972, 1994               N/A        194
  11A6       5,540,000   9/11/2006                                   0                   1962               N/A        150
  11A7       5,900,000   9/21/2006                                   0                   1979               N/A        233
  11A8       2,770,000   9/13/2006                                   0                   1971               N/A         92
  11A9       2,700,000   9/13/2006                                   0                   1965              2005         60
 11A10       3,750,000   9/13/2006                                   0                   1973              2004         83
   12       62,000,000   8/29/2006     66.1       40.9               0                   2006               N/A    134,739
   13       55,000,000   7/21/2006     72.7       67.1               0                   1997               N/A     96,169
   14       44,000,000   6/29/2006     79.5       79.5               0                Various               N/A    258,657
  14A1      27,700,000   6/29/2006                                   0                   1991               N/A    157,394
  14A2      16,300,000   6/29/2006                                   0                   1986               N/A    101,263
   15       43,100,000   8/18/2006     76.0       76.0               0             1984, 1985               N/A        644
   16      285,000,000  10/21/2005     70.2       59.9               0        2002, 2004-2005               N/A  1,440,865
   17       36,000,000    9/7/2006     79.2       79.2               0                   2004               N/A     49,768
   18       32,700,000   8/22/2006     77.1       72.0               0                   2001               N/A        338
   19       33,100,000   8/31/2006     71.0       66.5               0                   1966              2006    173,519
   20       31,000,000     Various     72.7       68.5               0                Various               N/A      1,150
  20A1      16,800,000   7/24/2006                                   0                   1968               N/A        612
  20A2       9,450,000   7/21/2006                                   0  1973, 1995, 1997, 200 0             N/A        343
  20A3       4,750,000   7/24/2006                                   0                   1960               N/A        195
   21       27,800,000   6/19/2006     79.9       79.9               0                   1998               N/A        293
   22       28,550,000   7/18/2006     77.1       77.1               0                   1963               N/A    150,246
   23       29,000,000   8/17/2006     75.6       70.6               0                   2005               N/A    148,066
   24       26,900,000    9/7/2006     79.9       79.9               0                   1934              1986    135,982
   25       28,850,000    8/7/2006     74.0       63.3               0                   1970              2001    309,801
   26       29,600,000   8/22/2006     72.0       67.2               0                   2004               N/A        336
   27       27,100,000   6/26/2006     73.3       70.5               0                   1962              2000    198,341
   28       26,500,000   7/27/2006     69.6       52.6               0                   2006               N/A    161,588
   29       25,300,000    1/5/2006     71.1       64.1               0                   2004               N/A    120,678
   30       22,200,000   8/23/2006     72.1       67.6               0                   2001               N/A     67,000
   31       25,300,000   7/18/2006     62.8       62.8               0                   1989              2004        202
   32       18,750,000    8/4/2006     80.0       80.0               0             2002, 2003               N/A        216
   33       19,100,000   7/20/2006     77.0       72.1               0  1995, 1999, 2003, 200 5             N/A        320
   34       19,900,000   6/17/2006     72.9       66.4               0                   1994               N/A    257,123
   35       19,300,000   9/21/2006     75.1       75.1               0  1924, 1927, 1931, 199 0      1988, 1995     63,049
   36       17,500,000   7/10/2006     80.0       72.7               0                   1997               N/A     90,721
   37       17,855,000   7/12/2006     77.8       77.8               0             1980, 1982  2000, 2002, 2003    148,788
   38       18,400,000   7/18/2006     74.9       63.6               0                   1973              1991        252
   39       18,500,000   8/23/2006     73.0       68.3               0                   1986              2000        432
   40       16,470,000    8/1/2006     78.7       73.6               0                   2005               N/A     65,900
   41       17,300,000   8/31/2006     76.3       71.4               0                   1986               N/A     62,875
   42       15,000,000    7/6/2006     79.9       67.6               0            2001 - 2005               N/A        216
   43       14,600,000   5/17/2006     78.5       67.6               0                   1981           Ongoing        336
   44       15,350,000    8/7/2006     72.8       62.2               0                   1991              2003    271,155
   45       16,000,000   6/29/2006     69.4       62.8               0                   1999              2005     45,474
   46       16,580,000    9/1/2006     65.0       54.4               0                   2006               N/A     89,079
   47       13,000,000   8/23/2006     79.6       75.6               0                   1990              2000        200
   48       12,500,000    8/1/2006     80.0       80.0               0                   1984               N/A        279
   49       10,916,000    7/1/2006     84.3       84.3               0                Various               N/A     43,262
  49A1       1,792,000    7/1/2006                                   0                   1997               N/A      7,000
  49A2       1,403,000    7/1/2006                                   0                   1974               N/A      4,678
  49A3       1,079,000    7/1/2006                                   0                   1996               N/A      3,550
  49A4       1,066,000    7/1/2006                                   0                   1975               N/A      4,100
  49A5         922,000    7/1/2006                                   0                   1942               N/A      3,600
  49A6         845,000    7/1/2006                                   0                   1961               N/A      3,300
  49A7         800,000    7/1/2006                                   0                   1973               N/A      2,900
  49A8         780,000    7/1/2006                                   0                   1975               N/A      2,600
  49A9         694,000    7/1/2006                                   0                   1980               N/A      2,550
 49A10         653,000    7/1/2006                                   0                   1974               N/A      2,400
 49A11         624,000    7/1/2006                                   0                   1925               N/A      3,900
 49A12         258,000    7/1/2006                                   0                   1925               N/A      2,684
   50       11,900,000   6/12/2006     75.6       67.3               0                   2006               N/A     69,433
   51       11,700,000   8/24/2006     76.9       71.8               0                   1979               N/A        408
   52       12,500,000   7/17/2006     71.8       67.2               0                   2006               N/A    102,513
   53       11,700,000   8/10/2006     74.8       63.2               0                   1985               N/A    140,708
   54        9,974,000    7/1/2006     85.8       85.8               0                Various               N/A     17,874
  54A1       2,936,000    7/1/2006                                   0                   1963               N/A      6,117
  54A2       2,701,000    7/1/2006                                   0                   1979               N/A      4,274
  54A3       1,671,000    7/1/2006                                   0                   1966               N/A      2,862
  54A4       1,544,000    7/1/2006                                   0                   1971               N/A      2,700
  54A5       1,122,000    7/1/2006                                   0                   1976               N/A      1,921
   55       10,625,000   7/25/2006     80.0       77.2               0                   1982              2002    117,771
   56       10,625,000   8/17/2006     80.0       72.1               0                   1984              1999    112,240
   57       11,800,000   8/10/2006     71.2       65.4               0                   1988               N/A    127,741
   58       11,650,000    7/3/2006     72.0       61.6           79.46                   1960               N/A        119
   59       10,750,000   8/15/2006     77.2       65.2               0             2001, 2004               N/A     59,485
   60       10,700,000    8/1/2006     76.9       65.7               0                   2001               N/A     38,592
   61       10,400,000   6/29/2006     79.0       71.5               0                   1985           Ongoing     50,049
   62       11,400,000    5/5/2006     70.2       67.5               0                   1981               N/A        172
   63       10,775,000   10/5/2005     73.9       63.7               0                Various           Various        629
  63A1       3,775,000   10/5/2005                                   0                   1950               N/A        260
  63A2       3,650,000   10/5/2005                                   0                   1945               N/A        212
  63A3       1,950,000   10/5/2005                                   0                   1964               N/A         94
  63A4       1,400,000   10/5/2005                                   0                   1949               N/A         63
   64        9,248,000    7/1/2006     85.2       85.2               0                Various               N/A     24,883
  64A1       2,033,000    7/1/2006                                   0                   1967               N/A      6,050
  64A2       2,005,000    7/1/2006                                   0                   1985               N/A      4,075
  64A3       1,814,000    7/1/2006                                   0                   1992               N/A      5,400
  64A4       1,692,000    7/1/2006                                   0                   1976               N/A      3,440
  64A5       1,704,000    7/1/2006                                   0                   1959               N/A      5,918
   65        9,925,000     Various     79.3       79.3               0                Various               N/A     28,373
  65A1       5,450,000    7/7/2006                                   0                   2006               N/A     13,813
  65A2       4,475,000   7/13/2006                                   0                   2003                       14,560
   66       13,600,000   9/13/2006     57.4       57.4               0       1950, 1960, 1969               N/A        287
   67        9,031,000    7/1/2006     85.4       85.4               0                Various               N/A     21,919
  67A1       3,338,000    7/1/2006                                   0                   1975               N/A      6,785
  67A2       1,880,000    7/1/2006                                   0                   1962               N/A      5,595
  67A3       1,432,000    7/1/2006                                   0                   1975               N/A      3,168
  67A4         950,000    7/1/2006                                   0                   1988               N/A      3,300
  67A5         841,000    7/1/2006                                   0                   1974               N/A      1,766
  67A6         590,000    7/1/2006                                   0                   1974               N/A      1,305
   68       10,275,000   8/17/2006     73.0       73.0               0              1854-1860              1985         62
   69       11,100,000   7/31/2006     67.5       57.8               0                   2004               N/A     48,567
   70       13,480,000   7/16/2006     55.6       47.2               0                   2006               N/A     76,866
   71       12,500,000    8/3/2006     59.9       48.2               0                   1941              2001     91,533
   72        9,350,000   8/25/2006     78.1       70.8               0                   1989               N/A     62,863
   73        9,700,000   9/12/2006     74.9       67.7               0                   2000               N/A    111,570
   74        9,200,000   8/10/2006     78.3       71.9               0                   1983               N/A     87,341
   75        9,000,000   8/20/2006     79.6       67.7               0            1980 & 1995               N/A     77,445
   76        8,339,000    7/1/2006     84.9       84.9               0                Various               N/A     26,727
  76A1       1,976,000    7/1/2006                                   0                   1987               N/A      7,264
  76A2       1,165,000    7/1/2006                                   0                   1995               N/A      2,856
  76A3       1,013,000    7/1/2006                                   0                   1973               N/A      3,518
  76A4         872,000    7/1/2006                                   0                   1930               N/A      3,632
  76A5         761,000    7/1/2006                                   0                   1939               N/A      2,644
  76A6         662,000    7/1/2006                                   0                   1980               N/A      1,035
  76A7         658,000    7/1/2006                                   0                   1960               N/A      2,286
  76A8         496,000    7/1/2006                                   0                   1980               N/A      1,824
  76A9         400,000    7/1/2006                                   0                   1978               N/A        500
 76A10         336,000    7/1/2006                                   0                   1986               N/A      1,168
   77        8,600,000   9/30/2006     79.1       72.7               0                   2000               N/A     37,011
   78        8,670,000   7/25/2006     76.7       76.7               0                   1987               N/A        121
   79        9,580,000   7/21/2006     68.4       68.4               0                   1991               N/A        105
   80        7,850,000   6/14/2006     80.0       75.2               0             1983, 1984               NAP        184
   81       10,160,000   7/24/2006     59.1       55.5               0                   1991              2006     47,984
   82        7,850,000   4/25/2006     74.5       65.1               0                   1982         2003-2005        111
   83        7,350,000    7/7/2006     79.6       70.8               0             1966, 1973              2004        172
   84        7,600,000   3/13/2006     76.7       60.0               0                   2003               N/A     63,000
   85        7,800,000   11/3/2006     73.7       69.0               0                   2006               N/A     17,513
   86        9,100,000   9/11/2006     62.6       62.6               0                   1988               N/A    156,775
   87        7,000,000   7/31/2006     79.0       74.2               0              1967-1968         2005-2006        198
   88        7,540,000   6/25/2006     72.4       66.7               0                   1985               NAP     88,200
   89        8,075,000   8/17/2006     66.8       57.2               0                   2005               N/A     28,528
   90        7,357,000    8/2/2006     73.3       61.6               0                   1988              2005     99,580
   91        7,650,000   7/21/2006     69.9       65.5               0                   1995               N/A        132
   92        7,000,000    9/6/2006     76.1       64.8               0                Various               N/A        176
  92A1       3,850,000    9/6/2006                                   0                   1973              1989         92
  92A2       3,150,000    9/6/2006                                   0                   1971              2001         84
   93        9,700,000   7/31/2006     54.6       42.5               0                   1965              1991    121,185
   94        6,500,000    8/9/2006     80.0       75.1               0                   1975               N/A        232
   95        7,000,000   7/12/2006     74.2       59.3               0                   2006               N/A     45,827
   96        6,800,000   7/14/2006     75.0       63.7               0                   1972               N/A     75,421
   97        7,700,000    4/1/2006     65.9       51.9           71.95                Various           Various        134
  97A1       4,500,000    4/1/2006                               76.59                   1997               N/A         64
  97A2       3,200,000    4/1/2006                               62.00                   1998               N/A         70
   98        7,040,000   6/24/2006     71.9       66.2               0                   1988               NAP     89,259
   99        8,150,000    5/9/2006     61.4       61.4               0                   1994               N/A     47,440
  100        6,950,000    5/8/2006     71.9       64.1               0                   1979       2001 - 2006     55,240
  101        6,530,000   9/15/2006     76.6       65.2               0                Various               N/A         92
 101A1       2,038,047   9/15/2006                                   0                   1967              2005         30
 101A2         632,828   9/15/2006                                   0       1920, 1935, 1940               N/A          8
 101A3         593,276   9/15/2006                                   0             1947, 1962               N/A          9
 101A4         570,676   9/15/2006                                   0                   1948               N/A          7
 101A5         542,425   9/15/2006                                   0                   1949               N/A          7
 101A6         429,419   9/15/2006                                   0                   1933               N/A          5
 101A7         406,819   9/15/2006                                   0             1951, 1998               N/A          5
 101A8         339,015   9/15/2006                                   0                   1954               N/A          6
 101A9         339,015   9/15/2006                                   0                   1954               N/A          6
 101A10        322,065   9/15/2006                                   0                   1954              2005          5
 101A11        316,414   9/15/2006                                   0                   1948              2002          4
  102        6,200,000   8/23/2006     79.8       72.3               0                   2000               N/A     21,800
  103        5,751,000    7/1/2006     84.6       84.6               0                Various               N/A     20,475
 103A1       1,822,000    7/1/2006                                   0                   1986               N/A      6,800
 103A2         983,000    7/1/2006                                   0                   1974               N/A      3,234
 103A3         869,000    7/1/2006                                   0                   1905               N/A      3,195
 103A4         740,000    7/1/2006                                   0                   1973               N/A      2,500
 103A5         523,000    7/1/2006                                   0                   1900               N/A      1,980
 103A6         420,000    7/1/2006                                   0                   1916               N/A      1,566
 103A7         394,000    7/1/2006                                   0                   1974               N/A      1,200
  104        6,008,000    7/1/2006     80.9       80.9               0                Various               N/A     11,927
 104A1       3,180,000    7/1/2006                                   0                   1977               N/A      6,313
 104A2       2,828,000    7/1/2006                                   0                   1974               N/A      5,614
  105        6,050,000   8/30/2006     80.0       75.9               0                   1980               N/A        160
  106        5,492,000    7/1/2006     85.2       85.2               0                Various               N/A     15,006
 106A1       1,906,000    7/1/2006                                   0                   1974               N/A      4,718
 106A2       1,483,000    7/1/2006                                   0                   1980               N/A      3,600
 106A3         912,000    7/1/2006                                   0                   1975               N/A      3,000
 106A4         758,000    7/1/2006                                   0                   1972               N/A      2,400
 106A5         433,000    7/1/2006                                   0                   1900               N/A      1,288
  107        6,100,000   8/29/2006     74.6       67.6               0             1965, 1970              2002     94,596
  108        6,600,000   5/31/2006     68.2       68.2               0                   1973              1983    123,239
  109        6,450,000   7/13/2006     69.7       59.6               0                   2004               N/A     22,490
  110        5,600,000   7/21/2006     79.5       74.4               0                   1995               N/A        120
  111        5,550,000    8/9/2006     79.3       74.4               0                   1974               N/A        198
  112        5,345,000    7/1/2006     80.0       80.0               0                Various               N/A     14,177
 112A1       3,732,000    7/1/2006                                   0                   1987               N/A      8,127
 112A2       1,613,000    7/1/2006                                   0                   1949               N/A      6,050
  113        7,300,000   6/26/2006     57.4       48.9               0                   1998               N/A     89,420
  114        7,000,000    8/8/2006     58.6       53.8               0                   1982               N/A    130,432
  115        5,250,000   7/13/2006     78.1       70.8               0                Various               N/A         88
 115A1       2,800,000   7/13/2006                                   0             1926, 1928               N/A         42
 115A2       1,350,000   7/13/2006                                   0                   1929               N/A         21
 115A3       1,100,000   7/13/2006                                   0                   1922               N/A         25
  116        5,850,000   6/25/2006     70.0       59.6               0                   2006               N/A     14,820
  117        4,841,000    7/1/2006     84.5       84.5               0                Various               N/A     18,156
 117A1         795,000    7/1/2006                                   0                   1924               N/A      3,154
 117A2         712,000    7/1/2006                                   0                   1970               N/A      2,543
 117A3         667,000    7/1/2006                                   0                   1972               N/A      2,452
 117A4         617,000    7/1/2006                                   0                   1940               N/A      2,336
 117A5         609,000    7/1/2006                                   0                   1974               N/A      2,004
 117A6         430,000    7/1/2006                                   0                   1987               N/A      1,628
 117A7         420,000    7/1/2006                                   0                   1986               N/A      1,591
 117A8         215,000    7/1/2006                                   0                   1974               N/A        816
 117A9         203,000    7/1/2006                                   0                   1963               N/A        768
 117A10        173,000    7/1/2006                                   0                   1964               N/A        864
  118        6,780,000   7/28/2006     59.0       45.9           87.70                   1985              2006         80
  119        5,520,000   8/24/2006     72.5       67.9               0                   2006               N/A     14,820
  120        7,200,000   7/25/2006     55.5       47.0               0                   1969              1984         25
  121        5,400,000   6/19/2006     72.9       56.9               0                   1999               N/A     13,905
  122        6,925,000    5/9/2006     56.3       56.3               0                   1995               N/A     50,366
  123        5,300,000   8/14/2006     73.6       66.6               0                   2001               N/A     40,396
  124        5,100,000   7/14/2006     73.5       65.5               0       1955, 1957, 1991               N/A     53,425
  125        4,950,000   10/6/2006     75.8       70.9               0                Various               N/A         79
 125A1       3,050,000   10/6/2006                                   0                   1931               N/A         50
 125A2       1,900,000   10/6/2006                                   0                   1929               N/A         29
  126        4,690,000    3/7/2006     79.9       67.9               0             2003, 2004               N/A     72,060
  127       14,300,000   12/2/2005     25.7       17.2               0                   1932              2004     13,400
  128        5,440,000   4/20/2006     67.1       59.3               0                   1975        1995, 2006     98,175
  129        5,300,000    6/9/2006     68.9       64.7               0                   1985               N/A     57,263
  130        4,780,000   6/23/2006     76.4       69.3               0                   2001               N/A     26,972
  131        5,250,000   7/10/2006     68.6       61.2               0                   1996               N/A     62,875
  132        5,150,000    8/1/2006     69.8       59.5               0                   1965              2002        175
  133        4,460,000    7/1/2006     80.4       80.4               0                Various               N/A     10,602
 133A1       2,001,000    7/1/2006                                   0                   1984               N/A      3,602
 133A2       1,333,000    7/1/2006                                   0                   2004               N/A      3,000
 133A3       1,126,000    7/1/2006                                   0                   1960               N/A      4,000
  134        4,600,000   8/28/2006     77.2       68.5               0                   2005               N/A     14,110
  135        5,190,000    8/9/2006     67.0       62.8               0                   1974               N/A        185
  136        4,350,000   8/19/2006     79.1       79.1               0                   1999               N/A    102,040
  137        4,600,000   10/1/2006     74.3       57.9               0                   2006               N/A     11,157
  138        4,249,000    7/1/2006     79.7       79.7               0                Various               N/A     12,378
 138A1       1,786,000    7/1/2006                                   0                   1965               N/A      5,300
 138A2       1,250,000    7/1/2006                                   0                   1962               N/A      3,478
 138A3       1,213,000    7/1/2006                                   0                   1996               N/A      3,600
  139        3,961,000    7/1/2006     84.8       84.8               0                Various               N/A     12,555
 139A1       1,361,000    7/1/2006                                   0                   1992               N/A      4,050
 139A2         909,000    7/1/2006                                   0                   1974               N/A      2,875
 139A3         784,000    7/1/2006                                   0                   1993               N/A      2,580
 139A4         512,000    7/1/2006                                   0                   1981               N/A      1,620
 139A5         395,000    7/1/2006                                   0                   1904               N/A      1,430
  140        4,200,000   8/30/2006     79.5       79.5               0                   2006               N/A     14,820
  141        4,325,000   8/28/2006     76.3       67.7               0                   1986               N/A     22,950
  142        4,280,000    9/4/2006     76.5       76.5               0                   2006               N/A     14,820
  143        4,350,000    4/4/2006     73.6       64.7               0             1979, 1981               N/A        200
  144        4,004,000    7/1/2006     77.9       77.9               0                Various               N/A     17,104
 144A1       1,612,000    7/1/2006                                   0                   1981               N/A      8,062
 144A2       1,398,000    7/1/2006                                   0                   1973               N/A      5,808
 144A3         994,000    7/1/2006                                   0                   1980               N/A      3,234
  145        3,925,000    9/6/2006     79.0       70.0               0                   1976               N/A     22,120
  146        5,040,000    8/7/2006     61.5       52.6               0                   2006               N/A     22,000
  147        4,350,000   7/28/2006     71.2       60.7               0                   1995               N/A     45,250
  148        4,160,000   6/27/2006     72.1       65.2               0                   1988               N/A     42,559
  149        3,800,000   3/12/2006     78.3       66.6               0                   2006               N/A     10,861
  150        4,060,000    7/8/2006     70.6       60.4               0                   2003               N/A     16,006
  151        3,700,000    8/8/2006     75.7       69.5               0             1990, 2005               N/A     41,980
  152        3,400,000    7/1/2006     80.7       80.7               0                Various               N/A      7,200
 152A1       2,207,000    7/1/2006                                   0                   1960               N/A      4,350
 152A2       1,193,000    7/1/2006                                   0                   1980               N/A      2,850
  153        3,600,000   9/15/2006     75.0       69.4               0                   2004               N/A     39,085
  154        3,300,000  11/23/2005     81.8       72.6               0                   2005               N/A     10,010
  155        3,775,000   7/26/2006     71.4       60.7               0                Various               N/A     97,815
 155A1       2,280,669   7/26/2006                                   0                   1978               N/A     59,095
 155A2       1,494,331   7/26/2006                                   0                   1979               N/A     38,720
  156        3,720,000     Various     71.2       61.2               0                Various               N/A     10,504
 156A1       2,700,000    8/9/2006                                   0                   1999               N/A      7,760
 156A2       1,020,000   8/16/2006                                   0                   1985               N/A      2,744
  157        4,200,000   3/20/2006     62.9       49.6           45.84                   1986               N/A        123
  158        3,650,000   6/16/2006     71.5       67.2               0                   2005               N/A     28,197
  159        3,228,000    7/1/2006     80.5       80.5               0                Various               N/A      7,353
 159A1       1,984,000    7/1/2006                                   0                   1980               N/A      4,184
 159A2       1,244,000    7/1/2006                                   0                   1963               N/A      3,169
  160        4,100,000   3/21/2006     63.1       57.6               0                   1995               N/A     47,950
  161        3,600,000    8/4/2006     69.3       46.1               0                   1991               N/A     16,551
  162        3,060,000    8/9/2006     79.7       74.8               0                   1971               N/A        109
  163        3,070,000   8/17/2006     79.0       67.0               0                   1978               N/A     46,356
  164        3,140,000    8/9/2006     77.1       72.3               0                   1973               N/A        117
  165        3,250,000    2/9/2006     73.4       62.8               0                   1989               N/A     48,000
  166        3,600,000   8/14/2006     65.5       61.6               0                   1971              2005        102
  167        3,400,000    8/9/2006     67.6       63.5               0                   1973               N/A         93
  168        3,075,000   8/17/2006     74.8       68.7               0                   1981               N/A     51,440
  169        2,900,000   3/12/2006     77.6       66.7               0                   1996               N/A     12,669
  170        2,379,000    7/1/2006     93.2       93.2               0                Various               N/A      6,841
 170A1       1,230,000    7/1/2006                                   0                   1972               N/A      3,928
 170A2       1,149,000    7/1/2006                                   0                   1960               N/A      2,913
  171        2,960,000   7/11/2006     74.3       62.7               0                   2004               N/A     12,808
  172        2,700,000   8/28/2006     74.6       66.4               0                   1996               N/A     19,797
  173        2,560,000   7/26/2006     76.2       71.6               0                   1999               N/A     16,584
  174        3,700,000   7/18/2006     52.7       45.1          107.44                   1952              2003         21
  175        2,750,000    7/6/2006     70.8       60.7               0                   2005               N/A     20,013
  176        3,600,000   7/20/2006     50.7       47.6               0                   1924              2003     16,973
  177        2,500,000   7/24/2006     70.5       65.1               0                   2003               N/A      5,759
  178        2,350,000    5/8/2006     72.1       62.1               0                   2004               N/A     11,589
  179        2,100,000   3/28/2006     78.6       70.7               0                   2005               N/A     11,134
  180        2,500,000   7/20/2006     60.8       57.1               0                   1910              1995     12,824
  181        1,700,000   7/14/2006     73.5       63.0               0                   1990               N/A      4,800
  182        1,675,000   8/10/2006     71.6       63.6               0                   1990              2006         32
  183        1,260,000   9/13/2006     80.2       68.5               0                   1965              2006     14,500
  184        1,350,000    8/2/2006     64.4       57.6               0                   2004               N/A      1,895


          UNIT      LOAN                       RENT
CONTROL    OF        PER      OCCUPANCY        ROLL            OWNERSHIP
  NO.    MEASURE  UNIT ($)  PERCENTAGE (%)     DATE            INTEREST
----------------------------------------------------------------------------

   1     Sq. Ft.       478            99.5    1/1/2007  Fee Simple
   2     Sq. Ft.       360            99.9    8/1/2006  Fee Simple
   3     Beds       58,879            93.9   6/30/2006  Fee Simple
  3A1    Beds       45,729            98.9   6/30/2006  Fee Simple
  3A2    Beds       54,599            98.8   6/30/2006  Fee Simple
  3A3    Beds      100,589            85.3   6/30/2006  Fee Simple
  3A4    Beds       40,829            98.4   6/30/2006  Fee Simple
  3A5    Beds       44,438            94.9   6/30/2006  Fee Simple
  3A6    Beds       25,155            89.6   6/30/2006  Fee Simple
  3A7    Beds       44,791            98.4   6/30/2006  Fee Simple
  3A8    Beds       39,216            95.9   6/30/2006  Fee Simple
  3A9    Beds       38,548            96.8   6/30/2006  Fee Simple
  3A10   Beds       40,881            96.1   6/30/2006  Fee Simple
  3A11   Beds       39,840            96.7   6/30/2006  Fee Simple
  3A12   Beds       27,673            96.6   6/30/2006  Fee Simple
  3A13   Beds       24,009            98.2   6/30/2006  Fee Simple
  3A14   Beds       46,125            97.1   6/30/2006  Fee Simple
  3A15   Beds       39,564            94.5   6/30/2006  Fee Simple/Leasehold
  3A16   Beds       23,278            81.8   6/30/2006  Fee Simple
  3A17   Beds       35,212            98.0   6/30/2006  Fee Simple
  3A18   Beds       33,359            98.6   6/30/2006  Fee Simple
  3A19   Beds       34,784            97.8   6/30/2006  Fee Simple
  3A20   Beds       40,732            97.5   6/30/2006  Fee Simple
  3A21   Beds       29,818            95.5   6/30/2006  Fee Simple
  3A22   Beds       34,584            94.5   6/30/2006  Fee Simple
  3A23   Beds       23,790            87.9   6/30/2006  Fee Simple
  3A24   Beds       28,079            85.5   6/30/2006  Fee Simple
  3A25   Beds       28,966            94.3   6/30/2006  Fee Simple
  3A26   Beds       37,800            97.8   6/30/2006  Fee Simple
  3A27   Beds       35,579            95.7   6/30/2006  Fee Simple
  3A28   Beds       28,093            95.5   6/30/2006  Fee Simple
  3A29   Beds       34,144            92.5   6/30/2006  Fee Simple
  3A30   Beds       18,687            95.5   6/30/2006  Fee Simple
  3A31   Beds       25,576            91.4   6/30/2006  Fee Simple
  3A32   Beds       22,491            95.3   6/30/2006  Fee Simple
  3A33   Beds       42,987            96.8   6/30/2006  Fee Simple
  3A34   Beds       25,713            94.9   6/30/2006  Fee Simple
  3A35   Beds       29,677            94.7   6/30/2006  Fee Simple
  3A36   Beds       25,147            91.5   6/30/2006  Fee Simple
  3A37   Beds       27,916            97.2   6/30/2006  Fee Simple
  3A38   Beds       23,139            98.3   6/30/2006  Fee Simple
  3A39   Beds       45,110            97.7   6/30/2006  Fee Simple
  3A40   Beds       22,586            89.0   6/30/2006  Fee Simple
  3A41   Beds       23,292            66.1   6/30/2006  Fee Simple
  3A42   Beds       26,467            90.7   6/30/2006  Fee Simple
  3A43   Beds       24,105            95.3   6/30/2006  Fee Simple
  3A44   Beds       23,977            83.2   6/30/2006  Fee Simple
  3A45   Beds       23,882            94.4   6/30/2006  Fee Simple
  3A46   Beds       21,530            96.0   6/30/2006  Fee Simple
  3A47   Beds       35,624            96.7   6/30/2006  Fee Simple
  3A48   Beds       25,617            95.5   6/30/2006  Fee Simple
  3A49   Beds       29,580            98.1   6/30/2006  Fee Simple
  3A50   Beds       33,411            96.9   6/30/2006  Fee Simple
  3A51   Beds       22,321            96.4   6/30/2006  Fee Simple
  3A52   Beds       17,690            94.6   6/30/2006  Fee Simple
  3A53   Beds       25,181            61.5   6/30/2006  Fee Simple
  3A54   Beds       32,413            95.7   6/30/2006  Fee Simple
  3A55   Beds       33,207            99.2   6/30/2006  Fee Simple
  3A56   Beds       25,713            95.9   6/30/2006  Fee Simple
  3A57   Beds       19,226            98.1   6/30/2006  Leasehold
  3A58   Beds       24,657            96.4   6/30/2006  Fee Simple
  3A59   Beds       26,270            89.5   6/30/2006  Fee Simple
  3A60   Beds       26,975            96.7   6/30/2006  Fee Simple
  3A61   Beds       30,887            71.7   6/30/2006  Fee Simple
  3A62   Beds       24,742            90.6   6/30/2006  Fee Simple
  3A63   Beds       21,540            86.2   6/30/2006  Fee Simple
  3A64   Beds       21,068            94.0   6/30/2006  Fee Simple
  3A65   Beds       27,355            97.3   6/30/2006  Fee Simple
  3A66   Beds       23,064            94.5   6/30/2006  Fee Simple
  3A67   Beds       23,836            93.7   6/30/2006  Fee Simple
  3A68   Beds       16,494            93.9   6/30/2006  Fee Simple
  3A69   Beds       21,687            91.9   6/30/2006  Fee Simple
  3A70   Beds       31,715            96.9   6/30/2006  Fee Simple/Leasehold
  3A71   Beds       14,914            88.5   6/30/2006  Fee Simple
  3A72   Beds       20,288            87.8   6/30/2006  Fee Simple
  3A73   Beds       17,319            97.6   6/30/2006  Fee Simple
  3A74   Beds       16,371            96.4   6/30/2006  Fee Simple
  3A75   Beds       21,444            88.6   6/30/2006  Fee Simple
  3A76   Beds       25,474            96.9   6/30/2006  Fee Simple
  3A77   Beds       13,140            93.8   6/30/2006  Fee Simple
  3A78   Beds       20,367            97.0   6/30/2006  Fee Simple
  3A79   Beds       15,632            97.2   6/30/2006  Fee Simple
  3A80   Beds       11,012            94.3   6/30/2006  Fee Simple
  3A81   Beds       11,008            86.9   6/30/2006  Fee Simple
  3A82   Beds       15,157            90.6   6/30/2006  Fee Simple
   4     Sq. Ft.       160            97.9   10/9/2006  Fee Simple
   5     Sq. Ft.       140            91.1    9/1/2006  Fee Simple
   6     Sq. Ft.       188            93.0     Various  Fee Simple
  6A1    Sq. Ft.       185            91.2    9/1/2006  Fee Simple
  6A2    Sq. Ft.       194            96.4    9/6/2006  Fee Simple
   7     Sq. Ft.        91            99.5   11/1/2006  Fee Simple/Leasehold
  7A1    Sq. Ft.       229           100.0   11/1/2006  Fee Simple
  7A2    Sq. Ft.        99           100.0   11/1/2006  Fee Simple
  7A3    Sq. Ft.        33           100.0   11/1/2006  Fee Simple
  7A4    Sq. Ft.       204           100.0   11/1/2006  Leasehold
  7A5    Sq. Ft.        70           100.0   11/1/2006  Fee Simple
  7A6    Sq. Ft.       285           100.0   11/1/2006  Fee Simple
  7A7    Sq. Ft.       211           100.0   11/1/2006  Fee Simple
  7A8    Sq. Ft.        78           100.0   11/1/2006  Fee Simple
  7A9    Sq. Ft.        95           100.0   11/1/2006  Fee Simple
  7A10   Sq. Ft.       175           100.0   11/1/2006  Fee Simple
  7A11   Sq. Ft.        72           100.0   11/1/2006  Fee Simple
  7A12   Sq. Ft.        90           100.0   11/1/2006  Fee Simple
  7A13   Sq. Ft.        60            98.5   11/1/2006  Fee Simple
  7A14   Sq. Ft.       167           100.0   11/1/2006  Fee Simple
  7A15   Sq. Ft.       174           100.0   11/1/2006  Fee Simple
  7A16   Sq. Ft.       153           100.0   11/1/2006  Fee Simple
  7A17   Sq. Ft.        60           100.0   11/1/2006  Fee Simple
  7A18   Sq. Ft.       102           100.0   11/1/2006  Fee Simple
  7A19   Sq. Ft.        44           100.0   11/1/2006  Fee Simple
  7A20   Sq. Ft.       138           100.0   11/1/2006  Fee Simple
  7A21   Sq. Ft.       138           100.0   11/1/2006  Fee Simple
  7A22   Sq. Ft.        76           100.0   11/1/2006  Fee Simple
  7A23   Sq. Ft.        60           100.0   11/1/2006  Fee Simple
  7A24   Sq. Ft.       111           100.0   11/1/2006  Fee Simple
  7A25   Sq. Ft.        58           100.0   11/1/2006  Fee Simple
  7A26   Sq. Ft.       142           100.0   11/1/2006  Fee Simple
  7A27   Sq. Ft.        42            62.8   11/1/2006  Fee Simple
  7A28   Sq. Ft.       129           100.0   11/1/2006  Fee Simple
  7A29   Sq. Ft.       168           100.0   11/1/2006  Fee Simple
  7A30   Sq. Ft.        55           100.0   11/1/2006  Fee Simple
  7A31   Sq. Ft.       117           100.0   11/1/2006  Fee Simple
  7A32   Sq. Ft.        46           100.0   11/1/2006  Fee Simple
  7A33   Sq. Ft.        51           100.0   11/1/2006  Fee Simple
  7A34   Sq. Ft.       114           100.0   11/1/2006  Fee Simple
  7A35   Sq. Ft.        55           100.0   11/1/2006  Fee Simple
  7A36   Sq. Ft.        34           100.0   11/1/2006  Fee Simple
  7A37   Sq. Ft.        26           100.0   11/1/2006  Fee Simple
  7A38   Sq. Ft.        28           100.0   11/1/2006  Fee Simple
   8     Sq. Ft.       143            89.9     Various  Fee Simple
  8A1    Sq. Ft.       210            89.9   11/1/2006  Fee Simple
  8A2    Sq. Ft.       144           100.0   7/19/2006  Fee Simple
  8A3    Sq. Ft.       102            82.6   11/1/2006  Fee Simple
  8A4    Sq. Ft.        95            75.2   7/19/2006  Fee Simple
  8A5    Sq. Ft.       115            91.2    8/1/2006  Fee Simple
  8A6    Sq. Ft.       274           100.0   8/12/2006  Fee Simple
  8A7    Sq. Ft.       329           100.0   10/1/2006  Fee Simple
  8A8    Sq. Ft.       221           100.0    9/1/2006  Fee Simple
  8A9    Sq. Ft.        82            81.1   7/18/2006  Fee Simple
  8A10   Sq. Ft.        64            65.8   7/18/2006  Fee Simple
  8A11   Sq. Ft.        88            81.4   7/18/2006  Fee Simple
  8A12   Sq. Ft.       262           100.0   7/26/2006  Fee Simple
  8A13   Sq. Ft.        91           100.0   7/18/2006  Fee Simple
  8A14   Sq. Ft.       160           100.0   7/18/2006  Fee Simple
   9     Sq. Ft.       132            88.6    9/1/2006  Fee Simple
   10    Rooms     133,333            71.4   7/31/2006  Fee Simple
  10A1   Rooms     153,571            61.0   7/31/2006  Fee Simple
  10A2   Rooms     107,143            70.4   7/31/2006  Fee Simple
  10A3   Rooms     185,185            65.0   7/31/2006  Fee Simple
  10A4   Rooms      95,000            84.0   7/31/2006  Fee Simple
  10A5   Rooms     174,528            78.8   7/31/2006  Fee Simple
   11    Pads       28,229            85.4    9/1/2006  Fee Simple
  11A1   Pads       37,915            88.2    9/1/2006  Fee Simple
  11A2   Pads       26,891            73.9    9/1/2006  Fee Simple
  11A3   Pads       36,025            95.7    9/1/2006  Fee Simple
  11A4   Pads       24,449            83.3    9/1/2006  Fee Simple
  11A5   Pads       27,320            80.4    9/1/2006  Fee Simple
  11A6   Pads       32,667            92.7    9/1/2006  Fee Simple
  11A7   Pads       20,172            74.2    9/1/2006  Fee Simple
  11A8   Pads       23,913            94.6    9/1/2006  Fee Simple
  11A9   Pads       35,000            98.3    9/1/2006  Fee Simple
 11A10   Pads       19,277            84.3    9/1/2006  Fee Simple
   12    Sq. Ft.       304           100.0  10/23/2006  Fee Simple
   13    Sq. Ft.       416            84.3    8/1/2006  Fee Simple
   14    Sq. Ft.       135            85.5   7/21/2006  Fee Simple
  14A1   Sq. Ft.       140            86.8   7/21/2006  Fee Simple
  14A2   Sq. Ft.       128            83.3   7/21/2006  Fee Simple
   15    Units      50,854            93.0   8/25/2006  Fee Simple
   16    Sq. Ft.       314            94.8  11/10/2005  Fee Simple
   17    Sq. Ft.       573            96.7  10/31/2006  Fee Simple
   18    Units      74,556            91.7   8/14/2006  Fee Simple
   19    Sq. Ft.       135           100.0    9/1/2006  Fee Simple
   20    Pads       19,609            68.2   6/29/2006  Fee Simple
  20A1   Pads       18,873            59.2   6/29/2006  Fee Simple
  20A2   Pads       21,137            78.1   6/29/2006  Fee Simple
  20A3   Pads       19,231            76.9   6/29/2006  Fee Simple
   21    Units      75,768            93.9    8/7/2006  Fee Simple
   22    Sq. Ft.       146            81.5   9/12/2006  Fee Simple
   23    Sq. Ft.       148            95.6   9/19/2006  Fee Simple
   24    Sq. Ft.       158            94.4    8/1/2006  Fee Simple
   25    Sq. Ft.        69            97.2   8/15/2006  Fee Simple/Leasehold
   26    Units      63,393            89.3   8/14/2006  Fee Simple
   27    Sq. Ft.       100            98.2    9/1/2006  Fee Simple/Leasehold
   28    Sq. Ft.       114           100.0   8/11/2006  Fee Simple
   29    Sq. Ft.       149            92.8   10/1/2006  Fee Simple
   30    Sq. Ft.       239           100.0   9/13/2006  Fee Simple
   31    Units      78,713            94.1   7/31/2006  Fee Simple
   32    Units      69,444            93.1   7/31/2006  Fee Simple
   33    Units      45,988            99.1    9/6/2006  Fee Simple
   34    Sq. Ft.        56            92.6   11/1/2006  Fee Simple
   35    Sq. Ft.       230            97.6    8/8/2006  Fee Simple
   36    Sq. Ft.       154            93.5   8/16/2006  Fee Simple
   37    Sq. Ft.        93            87.4   10/3/2006  Fee Simple
   38    Units      54,717            93.7    8/1/2006  Fee Simple
   39    Units      31,250            88.2    8/1/2006  Fee Simple
   40    Sq. Ft.       203            88.2   8/30/2006  Fee Simple
   41    Sq. Ft.       210           100.0    9/1/2006  Fee Simple
   42    Units      55,450            91.2    8/2/2006  Fee Simple
   43    Units      34,118            91.7   5/17/2006  Fee Simple
   44    Sq. Ft.        41            95.0   7/28/2006  Fee Simple
   45    Sq. Ft.       244           100.0   8/31/2006  Fee Simple
   46    Sq. Ft.       121            87.3    8/1/2006  Fee Simple
   47    Units      51,750            89.0   9/19/2006  Fee Simple
   48    Units      35,842            88.9   7/26/2006  Fee Simple
   49    Sq. Ft.       213           100.0   6/29/2006  Fee Simple
  49A1   Sq. Ft.       216           100.0   6/29/2006  Fee Simple
  49A2   Sq. Ft.       254           100.0   6/29/2006  Fee Simple
  49A3   Sq. Ft.       258           100.0   6/29/2006  Fee Simple
  49A4   Sq. Ft.       219           100.0   6/29/2006  Fee Simple
  49A5   Sq. Ft.       216           100.0   6/29/2006  Fee Simple
  49A6   Sq. Ft.       216           100.0   6/29/2006  Fee Simple
  49A7   Sq. Ft.       233           100.0   6/29/2006  Fee Simple
  49A8   Sq. Ft.       254           100.0   6/29/2006  Fee Simple
  49A9   Sq. Ft.       230           100.0   6/29/2006  Fee Simple
 49A10   Sq. Ft.       230           100.0   6/29/2006  Fee Simple
 49A11   Sq. Ft.       132           100.0   6/29/2006  Fee Simple
 49A12   Sq. Ft.        77           100.0   6/29/2006  Fee Simple
   50    Sq. Ft.       130           100.0    9/8/2006  Fee Simple
   51    Units      22,059            87.5   9/15/2006  Fee Simple
   52    Sq. Ft.        88           100.0   7/13/2006  Fee Simple
   53    Sq. Ft.        62            92.0   9/27/2006  Fee Simple
   54    Sq. Ft.       479           100.0   6/29/2006  Fee Simple
  54A1   Sq. Ft.       411           100.0   6/29/2006  Fee Simple
  54A2   Sq. Ft.       543           100.0   6/29/2006  Fee Simple
  54A3   Sq. Ft.       501           100.0   6/29/2006  Fee Simple
  54A4   Sq. Ft.       491           100.0   6/29/2006  Fee Simple
  54A5   Sq. Ft.       501           100.0   6/29/2006  Fee Simple
   55    Sq. Ft.        72            89.0    9/6/2006  Fee Simple
   56    Sq. Ft.        76            95.5   8/29/2006  Fee Simple
   57    Sq. Ft.        66            98.1    9/6/2006  Fee Simple
   58    Rooms      70,534            87.8   6/30/2006  Fee Simple
   59    Sq. Ft.       140            98.0  10/25/2006  Fee Simple
   60    Sq. Ft.       213           100.0   6/23/2006  Fee Simple
   61    Sq. Ft.       164            98.6   7/10/2006  Fee Simple
   62    Units      46,512            98.8    7/5/2006  Fee Simple
   63    Pads       12,666            79.2   10/9/2006  Fee Simple
  63A1   Pads       10,736            92.7   10/9/2006  Fee Simple
  63A2   Pads       12,730            57.5   10/9/2006  Fee Simple
  63A3   Pads       15,339            90.4   10/9/2006  Fee Simple
  63A4   Pads       16,431            84.1   10/9/2006  Fee Simple
   64    Sq. Ft.       317           100.0    7/6/2006  Fee Simple
  64A1   Sq. Ft.       286           100.0    7/6/2006  Fee Simple
  64A2   Sq. Ft.       421           100.0    7/6/2006  Fee Simple
  64A3   Sq. Ft.       286           100.0    7/6/2006  Fee Simple
  64A4   Sq. Ft.       421           100.0    7/6/2006  Fee Simple
  64A5   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
   65    Sq. Ft.       277           100.0   7/19/2006  Fee Simple
  65A1   Sq. Ft.       315           100.0   7/19/2006  Fee Simple
  65A2   Sq. Ft.       242           100.0   7/19/2006  Fee Simple
   66    Pads       27,178            87.1    9/1/2006  Fee Simple
   67    Sq. Ft.       352           100.0     Various  Fee Simple
  67A1   Sq. Ft.       421           100.0    7/6/2006  Fee Simple
  67A2   Sq. Ft.       286           100.0    7/6/2006  Fee Simple
  67A3   Sq. Ft.       386           100.0    7/6/2006  Fee Simple
  67A4   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
  67A5   Sq. Ft.       407           100.0    7/6/2006  Fee Simple
  67A6   Sq. Ft.       386           100.0   9/29/2006  Fee Simple
   68    Units     120,968            98.4   8/31/2006  Fee Simple
   69    Sq. Ft.       154           100.0    9/6/2006  Fee Simple
   70    Sq. Ft.        97            81.9    9/7/2006  Fee Simple
   71    Sq. Ft.        82            96.9   8/30/2006  Fee Simple
   72    Sq. Ft.       116            92.6   8/30/2006  Fee Simple
   73    Sq. Ft.        65           100.0  10/25/2006  Fee Simple
   74    Sq. Ft.        82           100.0    9/6/2006  Fee Simple
   75    Sq. Ft.        92            90.0   10/1/2006  Fee Simple
   76    Sq. Ft.       265           100.0    7/6/2006  Fee Simple
  76A1   Sq. Ft.       230           100.0    7/6/2006  Fee Simple
  76A2   Sq. Ft.       348           100.0    7/6/2006  Fee Simple
  76A3   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
  76A4   Sq. Ft.       202           100.0    7/6/2006  Fee Simple
  76A5   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
  76A6   Sq. Ft.       550           100.0    7/6/2006  Fee Simple
  76A7   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
  76A8   Sq. Ft.       230           100.0    7/6/2006  Fee Simple
  76A9   Sq. Ft.       689           100.0    7/6/2006  Fee Simple
 76A10   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
   77    Sq. Ft.       184            83.5    9/1/2006  Fee Simple
   78    Units      54,959            95.0   8/14/2006  Fee Simple
   79    Units      62,381            98.1   7/31/2006  Fee Simple
   80    Units      34,130            92.4    6/7/2006  Fee Simple
   81    Sq. Ft.       125           100.0    7/1/2006  Fee Simple
   82    Units      52,703            93.7   6/30/2006  Fee Simple
   83    Units      34,012            93.6   7/10/2006  Fee Simple
   84    Sq. Ft.        93           100.0   9/13/2006  Leasehold
   85    Sq. Ft.       328           100.0   7/27/2006  Fee Simple
   86    Sq. Ft.        36            83.5   9/25/2006  Fee Simple
   87    Units      27,929            91.9   7/31/2006  Fee Simple
   88    Sq. Ft.        62           100.0   7/21/2006  Fee Simple
   89    Sq. Ft.       189           100.0   9/18/2006  Fee Simple
   90    Sq. Ft.        54            98.8   8/31/2006  Fee Simple
   91    Units      40,515            93.9    8/3/2006  Fee Simple
   92    Units      30,260            96.6   9/15/2006  Fee Simple
  92A1   Units      31,838            98.9   9/15/2006  Fee Simple
  92A2   Units      28,531            94.0   9/15/2006  Fee Simple
   93    Sq. Ft.        44            89.3   8/15/2006  Fee Simple
   94    Units      22,414            98.3   7/31/2006  Fee Simple
   95    Sq. Ft.       113           100.0    8/8/2006  Fee Simple
   96    Sq. Ft.        68           100.0   9/27/2006  Fee Simple
   97    Rooms      37,870            56.1   3/31/2006  Fee Simple
  97A1   Rooms      47,419            58.3   3/31/2006  Fee Simple
  97A2   Rooms      29,140            52.7   3/31/2006  Fee Simple
   98    Sq. Ft.        57            91.9   7/21/2006  Fee Simple
   99    Sq. Ft.       105            96.3    8/1/2006  Fee Simple
  100    Sq. Ft.        91            94.3   6/20/2006  Fee Simple
  101    Units      54,348           100.0   9/26/2006  Fee Simple
 101A1   Units      52,018           100.0   9/26/2006  Fee Simple
 101A2   Units      60,569           100.0   9/26/2006  Fee Simple
 101A3   Units      50,474           100.0   9/26/2006  Fee Simple
 101A4   Units      62,424           100.0   9/26/2006  Fee Simple
 101A5   Units      59,333           100.0   9/26/2006  Fee Simple
 101A6   Units      65,761           100.0   9/26/2006  Fee Simple
 101A7   Units      62,300           100.0   9/26/2006  Fee Simple
 101A8   Units      43,264           100.0   9/26/2006  Fee Simple
 101A9   Units      43,264           100.0   9/26/2006  Fee Simple
 101A10  Units      49,321           100.0   9/26/2006  Fee Simple
 101A11  Units      60,570           100.0   9/26/2006  Fee Simple
  102    Sq. Ft.       227           100.0   9/22/2006  Fee Simple
  103    Sq. Ft.       238           100.0    7/6/2006  Fee Simple
 103A1   Sq. Ft.       226           100.0    7/6/2006  Fee Simple
 103A2   Sq. Ft.       258           100.0    7/6/2006  Fee Simple
 103A3   Sq. Ft.       230           100.0    7/6/2006  Fee Simple
 103A4   Sq. Ft.       251           100.0    7/6/2006  Fee Simple
 103A5   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 103A6   Sq. Ft.       226           100.0    7/6/2006  Fee Simple
 103A7   Sq. Ft.       279           100.0    7/6/2006  Fee Simple
  104    Sq. Ft.       408           100.0   6/29/2006  Fee Simple
 104A1   Sq. Ft.       408           100.0   6/29/2006  Fee Simple
 104A2   Sq. Ft.       408           100.0   6/29/2006  Fee Simple
  105    Units      30,250            98.1    8/7/2006  Fee Simple
  106    Sq. Ft.       312           100.0    7/6/2006  Fee Simple
 106A1   Sq. Ft.       345           100.0    7/6/2006  Fee Simple
 106A2   Sq. Ft.       352           100.0    7/6/2006  Fee Simple
 106A3   Sq. Ft.       258           100.0    7/6/2006  Fee Simple
 106A4   Sq. Ft.       268           100.0    7/6/2006  Fee Simple
 106A5   Sq. Ft.       286           100.0    7/6/2006  Fee Simple
  107    Sq. Ft.        48           100.0   9/18/2006  Fee Simple
  108    Sq. Ft.        37           100.0   8/31/2006  Fee Simple
  109    Sq. Ft.       200           100.0   7/31/2006  Fee Simple
  110    Units      37,083            98.3    8/7/2006  Fee Simple
  111    Units      22,222            99.5   7/31/2006  Fee Simple
  112    Sq. Ft.       302           100.0    7/6/2006  Fee Simple
 112A1   Sq. Ft.       370           100.0    7/6/2006  Fee Simple
 112A2   Sq. Ft.       210           100.0    7/6/2006  Fee Simple
  113    Sq. Ft.        47            97.6   8/31/2006  Fee Simple
  114    Sq. Ft.        31           100.0    9/6/2006  Fee Simple
  115    Units      46,591           100.0   6/30/2006  Fee Simple
 115A1   Units      54,119           100.0   6/30/2006  Fee Simple
 115A2   Units      51,190           100.0   6/30/2006  Fee Simple
 115A3   Units      30,080           100.0   6/30/2006  Fee Simple
  116    Sq. Ft.       276           100.0   8/16/2005  Fee Simple
  117    Sq. Ft.       225           100.0    7/6/2006  Fee Simple
 117A1   Sq. Ft.       213           100.0    7/6/2006  Fee Simple
 117A2   Sq. Ft.       237           100.0    7/6/2006  Fee Simple
 117A3   Sq. Ft.       230           100.0    7/6/2006  Fee Simple
 117A4   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 117A5   Sq. Ft.       258           100.0    7/6/2006  Fee Simple
 117A6   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 117A7   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 117A8   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 117A9   Sq. Ft.       223           100.0    7/6/2006  Fee Simple
 117A10  Sq. Ft.       167           100.0    7/6/2006  Fee Simple
  118    Rooms      50,000            62.6   6/30/2006  Fee Simple
  119    Sq. Ft.       270           100.0   11/3/2006  Fee Simple
  120    Units     159,863            96.0   8/23/2006  Fee Simple
  121    Sq. Ft.       283           100.0   8/16/2006  Fee Simple
  122    Sq. Ft.        77            97.1    8/1/2006  Fee Simple
  123    Sq. Ft.        97           100.0   10/1/2006  Fee Simple
  124    Sq. Ft.        70           100.0   8/24/2006  Fee Simple
  125    Units      47,468            93.6    8/2/2006  Fee Simple
 125A1   Units      45,000            94.0    8/2/2006  Fee Simple
 125A2   Units      51,724            93.1    8/2/2006  Fee Simple
  126    Sq. Ft.        52            97.8  10/18/2006  Fee Simple
  127    Sq. Ft.       274            95.9    4/3/2006  Fee Simple
  128    Sq. Ft.        37            82.6   8/16/2006  Fee Simple
  129    Sq. Ft.        64           100.0  10/24/2006  Fee Simple
  130    Sq. Ft.       135           100.0    7/7/2006  Fee Simple
  131    Sq. Ft.        57            88.0   6/30/2006  Fee Simple
  132    Pads       20,535            90.3   8/25/2006  Fee Simple
  133    Sq. Ft.       338           100.0   6/29/2006  Fee Simple
 133A1   Sq. Ft.       451           100.0   6/29/2006  Fee Simple
 133A2   Sq. Ft.       358           100.0   6/29/2006  Fee Simple
 133A3   Sq. Ft.       222           100.0   6/29/2006  Fee Simple
  134    Sq. Ft.       252            79.7    8/1/2006  Fee Simple
  135    Units      18,784            96.2   7/31/2006  Fee Simple
  136    Sq. Ft.        34            97.6   8/23/2006  Fee Simple
  137    Sq. Ft.       307           100.0  10/11/2006  Fee Simple
  138    Sq. Ft.       274           100.0    7/6/2006  Fee Simple
 138A1   Sq. Ft.       268           100.0    7/6/2006  Fee Simple
 138A2   Sq. Ft.       287           100.0    7/6/2006  Fee Simple
 138A3   Sq. Ft.       268           100.0    7/6/2006  Fee Simple
  139    Sq. Ft.       268           100.0    7/6/2006  Fee Simple
 139A1   Sq. Ft.       286           100.0    7/6/2006  Fee Simple
 139A2   Sq. Ft.       268           100.0    7/6/2006  Fee Simple
 139A3   Sq. Ft.       258           100.0    7/6/2006  Fee Simple
 139A4   Sq. Ft.       268           100.0    7/6/2006  Fee Simple
 139A5   Sq. Ft.       233           100.0    7/6/2006  Fee Simple
  140    Sq. Ft.       225           100.0   9/27/2006  Fee Simple
  141    Sq. Ft.       144            87.4   10/1/2006  Fee Simple
  142    Sq. Ft.       221           100.0   9/21/2006  Fee Simple
  143    Units      16,000            74.5   7/21/2006  Fee Simple
  144    Sq. Ft.       182           100.0    7/6/2006  Fee Simple
 144A1   Sq. Ft.       154           100.0    7/6/2006  Fee Simple
 144A2   Sq. Ft.       188           100.0    7/6/2006  Fee Simple
 144A3   Sq. Ft.       244           100.0    7/6/2006  Fee Simple
  145    Sq. Ft.       140           100.0    8/7/2006  Fee Simple
  146    Sq. Ft.       141            81.4   9/19/2006  Fee Simple
  147    Sq. Ft.        68            87.8    8/1/2006  Fee Simple
  148    Sq. Ft.        70            81.9   9/26/2006  Fee Simple
  149    Sq. Ft.       274           100.0   10/2/2006  Fee Simple
  150    Sq. Ft.       179           100.0    8/1/2006  Fee Simple
  151    Sq. Ft.        67            97.1    9/6/2006  Fee Simple
  152    Sq. Ft.       381           100.0   6/29/2006  Fee Simple
 152A1   Sq. Ft.       411           100.0   6/29/2006  Fee Simple
 152A2   Sq. Ft.       336           100.0   6/29/2006  Fee Simple
  153    Sq. Ft.        69            97.8   9/22/2006  Fee Simple
  154    Sq. Ft.       270           100.0   8/23/2006  Fee Simple
  155    Sq. Ft.        28            96.0   8/14/2006  Fee Simple
 155A1   Sq. Ft.        28            98.8   8/14/2006  Fee Simple
 155A2   Sq. Ft.        28            91.7   8/14/2006  Fee Simple
  156    Sq. Ft.       252           100.0   10/3/2006  Fee Simple
 156A1   Sq. Ft.       258           100.0   10/3/2006  Fee Simple
 156A2   Sq. Ft.       237           100.0   10/3/2006  Fee Simple
  157    Rooms      21,490            82.4   3/31/2006  Fee Simple
  158    Sq. Ft.        93           100.0   9/19/2006  Fee Simple
  159    Sq. Ft.       353           100.0   6/29/2006  Fee Simple
 159A1   Sq. Ft.       383           100.0   6/29/2006  Fee Simple
 159A2   Sq. Ft.       315           100.0   6/29/2006  Fee Simple
  160    Sq. Ft.        54            82.4   3/22/2006  Fee Simple
  161    Sq. Ft.       151           100.0   9/27/2006  Fee Simple
  162    Units      22,385            99.1   7/31/2006  Fee Simple
  163    Sq. Ft.        52            82.9  10/23/2006  Fee Simple
  164    Units      20,684           100.0   7/31/2006  Fee Simple
  165    Sq. Ft.        50           100.0   7/18/2006  Fee Simple
  166    Units      23,120            91.2   8/31/2006  Fee Simple/Leasehold
  167    Units      24,731            92.5   7/31/2006  Fee Simple
  168    Sq. Ft.        45            86.1    9/6/2006  Fee Simple
  169    Sq. Ft.       178           100.0    6/1/2006  Fee Simple
  170    Sq. Ft.       324           100.0   6/29/2006  Fee Simple
 170A1   Sq. Ft.       293           100.0   6/29/2006  Fee Simple
 170A2   Sq. Ft.       366           100.0   6/29/2006  Fee Simple
  171    Sq. Ft.       172           100.0   9/18/2006  Fee Simple
  172    Sq. Ft.       102           100.0   8/23/2006  Fee Simple
  173    Sq. Ft.       118           100.0    9/8/2006  Fee Simple
  174    Rooms      92,786            77.3   5/31/2006  Fee Simple
  175    Sq. Ft.        97           100.0    8/1/2006  Fee Simple
  176    Sq. Ft.       107            96.0   9/15/2006  Fee Simple
  177    Sq. Ft.       306           100.0   8/22/2006  Fee Simple
  178    Sq. Ft.       146           100.0   10/4/2006  Leasehold
  179    Sq. Ft.       148            85.2   9/15/2006  Fee Simple
  180    Sq. Ft.       118            96.7   9/15/2006  Fee Simple
  181    Sq. Ft.       260           100.0    9/1/2006  Fee Simple
  182    Units      37,500            96.9   8/15/2006  Fee Simple
  183    Sq. Ft.        70           100.0  10/20/2006  Fee Simple
  184    Sq. Ft.       459           100.0   7/27/2006  Fee Simple


                                                               LARGEST
CONTROL                                                        TENANT
  NO.                                                           NAME
--------------------------------------------------------------------------------------------------------------------------------

   1     Jeffries & Company, Inc.
   2     News America
   3     N/A
  3A1    N/A
  3A2    N/A
  3A3    N/A
  3A4    N/A
  3A5    N/A
  3A6    N/A
  3A7    N/A
  3A8    N/A
  3A9    N/A
  3A10   N/A
  3A11   N/A
  3A12   N/A
  3A13   N/A
  3A14   N/A
  3A15   N/A
  3A16   N/A
  3A17   N/A
  3A18   N/A
  3A19   N/A
  3A20   N/A
  3A21   N/A
  3A22   N/A
  3A23   N/A
  3A24   N/A
  3A25   N/A
  3A26   N/A
  3A27   N/A
  3A28   N/A
  3A29   N/A
  3A30   N/A
  3A31   N/A
  3A32   N/A
  3A33   N/A
  3A34   N/A
  3A35   N/A
  3A36   N/A
  3A37   N/A
  3A38   N/A
  3A39   N/A
  3A40   N/A
  3A41   N/A
  3A42   N/A
  3A43   N/A
  3A44   N/A
  3A45   N/A
  3A46   N/A
  3A47   N/A
  3A48   N/A
  3A49   N/A
  3A50   N/A
  3A51   N/A
  3A52   N/A
  3A53   N/A
  3A54   N/A
  3A55   N/A
  3A56   N/A
  3A57   N/A
  3A58   N/A
  3A59   N/A
  3A60   N/A
  3A61   N/A
  3A62   N/A
  3A63   N/A
  3A64   N/A
  3A65   N/A
  3A66   N/A
  3A67   N/A
  3A68   N/A
  3A69   N/A
  3A70   N/A
  3A71   N/A
  3A72   N/A
  3A73   N/A
  3A74   N/A
  3A75   N/A
  3A76   N/A
  3A77   N/A
  3A78   N/A
  3A79   N/A
  3A80   N/A
  3A81   N/A
  3A82   N/A
   4     College Entrance Board
   5     Merill Lynch, Pierce, Fenner
   6     N/A
  6A1    Cisco
  6A2    GSA National Park Service
   7     N/A
  7A1    United States of America: General Services Administration (US Drug Enforcement Agency)
  7A2    State of Michigan (Department of Police)
  7A3    United States Postal Service
  7A4    United States of America: General Services Administration (Department of Homeland Security)
  7A5    State of Texas (The Texas Department of Human Services)
  7A6    United States of America: General Services Administration (United States Customs Service)
  7A7    United States of America: General Services Administration (Social Security Administration)
  7A8    United States of America: General Services Administration (Department of Homeland Security)
  7A9    United States of America: Department of Interior Bureau of Land Management
  7A10   United States of America: General Services Administration (Social Security Administration)
  7A11   State of Ohio (Department of Administrative Services)
  7A12   United States of America: Bureau of Land Management
  7A13   State of Texas (Health and Human Services Commission)
  7A14   United States of America: General Services Administration (Social Security Administration)
  7A15   United States of America: General Services Administration (Social Security Administration)
  7A16   United States of America: General Services Administration (Social Security Administration and Internal Revenue Service)
  7A17   State of Texas (Health and Human Services Commission and Department of Family and Protective Services)
  7A18   United States of America: General Services Administration (Department of Veterans Affairs)
  7A19   United States of America (Department of Agriculture Forest Service)
  7A20   United States of America: General Serices Administration (Social Security Administration)
  7A21   United States of America: General Services Administration (Social Security Administration)
  7A22   State of Texas (Department of Human Services)
  7A23   State of Texas (Health and Human Services Commision)
  7A24   United States of America: General Services Administration (Public Buildings Service)
  7A25   State of Texas (Texas Building and Procurement Commission)
  7A26   United States of America: General Services Administration (US Drug Enforcement Agency)
  7A27   State of Texas (Health and Human Services Commission)
  7A28   United States Postal Service
  7A29   United States of America: General Services Administration (Social Security Administration)
  7A30   State of Texas (Health and Human Services Commission)
  7A31   United States Postal Service
  7A32   State of Texas (Texas Building and Procurement Commission)
  7A33   State of Texas (Health and Human Services Commission and Department of Family and Protective Services)
  7A34   United States Postal Service
  7A35   State of Texas (Health and Human Services Commission and Department of Family and Protective Services)
  7A36   State of Texas (Health and Human Services Commission and Department of Family and Protective Services)
  7A37   State of Texas (Health and Human Services Commission and Department of Family and Protective Services)
  7A38   State of Texas (Health and Human Services Commission)
   8     N/A
  8A1    Claim Jumper Restaurant, L.L.C.
  8A2    Asiana Market
  8A3    Basha's Store #50
  8A4    Hollywood Entertainment
  8A5    Dollar General
  8A6    Record Town USA, LLC dba FYE Music and Movies
  8A7    Washington Mutual
  8A8    Wells Fargo Financial Arizona, Inc.
  8A9    Dollar General #6453
  8A10   Tae C. Lee
  8A11   Elite PC, LLC
  8A12   Blockbuster Inc.
  8A13   Dollar General
  8A14   A Plus Chiropractic Care, P.C.
   9     INVESCO Institutional
   10    N/A
  10A1   N/A
  10A2   N/A
  10A3   N/A
  10A4   N/A
  10A5   N/A
   11    N/A
  11A1   N/A
  11A2   N/A
  11A3   N/A
  11A4   N/A
  11A5   N/A
  11A6   N/A
  11A7   N/A
  11A8   N/A
  11A9   N/A
 11A10   N/A
   12    Tampa Bay Buccaneers
   13    Sloppy Joe's/Howl at the Moon
   14    N/A
  14A1   ADT Security Services
  14A2   North Fork Bank
   15    N/A
   16    Dillard's
   17    Equinox South Beach, Inc.
   18    N/A
   19    The Vons Companies Inc.
   20    N/A
  20A1   N/A
  20A2   N/A
  20A3   N/A
   21    N/A
   22    SpecPub, Inc.
   23    Best Buy
   24    City of Los Angeles Retirement System
   25    Belk
   26    N/A
   27    NYS Workers Comp
   28    The TJX Companies, Inc.
   29    Stein Mart
   30    Sharp Rees-Stealy Medical Group
   31    N/A
   32    N/A
   33    N/A
   34    Kmart Corporation
   35    Blockbuster Inc.
   36    Progressive
   37    Golden Coral
   38    N/A
   39    N/A
   40    Best Buy
   41    Seven Oaks Acadamy
   42    N/A
   43    N/A
   44    Belk
   45    Stonewood
   46    Giant Food Stores, LLC
   47    N/A
   48    N/A
   49    N/A
  49A1   Charter One Bank, N.A.
  49A2   Charter One Bank, N.A.
  49A3   Charter One Bank, N.A.
  49A4   Charter One Bank, N.A.
  49A5   Charter One Bank, N.A.
  49A6   Charter One Bank, N.A.
  49A7   Charter One Bank, N.A.
  49A8   Charter One Bank, N.A.
  49A9   Charter One Bank, N.A.
 49A10   Charter One Bank, N.A.
 49A11   Charter One Bank, N.A.
 49A12   Charter One Bank, N.A.
   50    Knowlan's Super Markets
   51    N/A
   52    Home Depot
   53    ARC - 3500 Whse
   54    N/A
  54A1   Charter One Bank, N.A.
  54A2   Charter One Bank, N.A.
  54A3   Charter One Bank, N.A.
  54A4   Charter One Bank, N.A.
  54A5   Charter One Bank, N.A.
   55    ShawCor Pipe Protection
   56    Ingles Markets, Inc.
   57    Old Time Pottery
   58    N/A
   59    Bi-Lo
   60    Washington Mutual
   61    The Great Atlantic & Pacific Tea Company, Inc.
   62    N/A
   63    N/A
  63A1   N/A
  63A2   N/A
  63A3   N/A
  63A4   N/A
   64    N/A
  64A1   Charter One Bank, N.A.
  64A2   Charter One Bank, N.A.
  64A3   Charter One Bank, N.A.
  64A4   Charter One Bank, N.A.
  64A5   Charter One Bank, N.A.
   65    Various
  65A1   Eckerd Coporation
  65A2   Walgreen Co
   66    N/A
   67    N/A
  67A1   Charter One Bank, N.A.
  67A2   Charter One Bank, N.A.
  67A3   Charter One Bank, N.A.
  67A4   Charter One Bank, N.A.
  67A5   Charter One Bank, N.A.
  67A6   Charter One Bank, N.A.
   68    N/A
   69    Sierra Pacific Mortgatge
   70    Phoenicia Foods
   71    Colorado Allergy & Asthma
   72    UHS of Delaware, Inc.
   73    Garden Ridge, L.P.
   74    Beall's
   75    Meridian Business Center-Texas-Partners, L.P.
   76    N/A
  76A1   Citizens Bank, N.A.
  76A2   Citizens Bank, N.A.
  76A3   Citizens Bank of Rhode Island
  76A4   Citizens Bank of Rhode Island
  76A5   Citizens Bank, N.A.
  76A6   Citizens Bank of Rhode Island
  76A7   Citizens Bank of Rhode Island
  76A8   Citizens Bank, N.A.
  76A9   Citizens Bank New Hampshire
 76A10   Citizens Bank, N.A.
   77    Sepracor. Inc.
   78    N/A
   79    N/A
   80    N/A
   81    PrimaPharm
   82    N/A
   83    N/A
   84    Pratt & Whitney- United Technologies
   85    CVS
   86    N/A
   87    N/A
   88    Kroger
   89    Old City Buffet (Guo)
   90    Redner's Market
   91    N/A
   92    N/A
  92A1   N/A
  92A2   N/A
   93    T.J. Maxx
   94    N/A
   95    Turner Furniture of North Carolina, LLC
   96    Air Industries
   97    N/A
  97A1   N/A
  97A2   N/A
   98    Pick 'n' Save
   99    N/A
  100    Big Lots
  101    N/A
 101A1   N/A
 101A2   N/A
 101A3   N/A
 101A4   N/A
 101A5   N/A
 101A6   N/A
 101A7   N/A
 101A8   N/A
 101A9   N/A
 101A10  N/A
 101A11  N/A
  102    Snooke's Bar & Grill
  103    N/A
 103A1   Citizens Bank, N.A.
 103A2   Citizens Bank, N.A.
 103A3   Citizens Bank, N.A.
 103A4   Citizens Bank, N.A.
 103A5   Citizens Bank, N.A.
 103A6   Citizens Bank, N.A.
 103A7   Citizens Bank, N.A.
  104    N/A
 104A1   Charter One Bank, N.A.
 104A2   Charter One Bank, N.A.
  105    N/A
  106    N/A
 106A1   Citizens Bank, N.A.
 106A2   Citizens Bank, N.A.
 106A3   Citizens Bank, N.A.
 106A4   Citizens Bank, N.A.
 106A5   Citizens Bank, N.A.
  107    Hobby Lobby
  108    Mia's Beauty Supply, Inc.
  109    1st Aquatic Physical Therapy
  110    N/A
  111    N/A
  112    N/A
 112A1   Charter One Bank, N.A.
 112A2   Charter One Bank, N.A.
  113    N/A
  114    Consignment American Inc.
  115    N/A
 115A1   N/A
 115A2   N/A
 115A3   N/A
  116    Walgreen - Henderson
  117    N/A
 117A1   Citizens Bank, N.A.
 117A2   Citizens Bank, N.A.
 117A3   Citizens Bank, N.A.
 117A4   Citizens Bank, N.A.
 117A5   Citizens Bank, N.A.
 117A6   Citizens Bank, N.A.
 117A7   Citizens Bank, N.A.
 117A8   Citizens Bank, N.A.
 117A9   Citizens Bank, N.A.
 117A10  Citizens Bank, N.A.
  118    N/A
  119    Walgreen's
  120    N/A
  121    Walgreens
  122    N/A
  123    Comfort Systems USA
  124    Naomi Sadoun and Solomon Sadoun dba Indigo Dye
  125    N/A
 125A1   N/A
 125A2   N/A
  126    N/A
  127    Various
  128    N/A
  129    LXU Healthcare
  130    Huntsville Pediatric and Internal Medicine Association
  131    N/A
  132    N/A
  133    N/A
 133A1   Charter One Bank, N.A.
 133A2   Charter One Bank, N.A.
 133A3   Charter One Bank, N.A.
  134    Otter's No. 2, LLC
  135    N/A
  136    N/A
  137    Rite Aid
  138    N/A
 138A1   Citizens Bank, N.A.
 138A2   Citizens Bank, N.A.
 138A3   Citizens Bank, N.A.
  139    N/A
 139A1   Citizens Bank, N.A.
 139A2   Citizens Bank, N.A.
 139A3   Citizens Bank, N.A.
 139A4   Citizens Bank, N.A.
 139A5   Citizens Bank, N.A.
  140    Walgreen
  141    Bridgestone/Firestone Tire
  142    Walgreen Co.
  143    N/A
  144    N/A
 144A1   Citizens Bank, N.A.
 144A2   Citizens Bank, N.A.
 144A3   Citizens Bank, N.A.
  145    Bradford Child Care Services, Inc. dba Tender Care Learning Services
  146    Tomball Regional Hospital
  147    N/A
  148    Inland Sports- Conlin Enterprises Corp.
  149    Gwinnett Orthopedics, P.C.
  150    Rico's Mexican Retaurant
  151    Broulim's Supermarket
  152    N/A
 152A1   Charter One Bank, N.A.
 152A2   Charter One Bank, N.A.
  153    N/A
  154    Brothers BBQ
  155    N/A
 155A1   N/A
 155A2   N/A
  156    N/A
 156A1   India's Clay Oven
 156A2   Mrs. Winner's Chicken & Buiscuit
  157    N/A
  158    Linens N Things
  159    N/A
 159A1   Charter One Bank, N.A.
 159A2   Charter One Bank, N.A.
  160    Bi Lo Grocery Store
  161    Gottlieb Skanska, Inc.
  162    N/A
  163    The Spring Branch Memorial Club
  164    N/A
  165    Harris Teeter
  166    N/A
  167    N/A
  168    Food Lion dba Bottom Dollar
  169    ENT of Georgia, LLC
  170    N/A
 170A1   Charter One Bank, N.A.
 170A2   Charter One Bank, N.A.
  171    Comfort Smile
  172    John Wieland Homes
  173    Fashion Bug
  174    N/A
  175    Simply Silver
  176    Community Redevelopment Agency (CRA)
  177    NASR Brothers Jewelers
  178    California Pizza Kitchen
  179    Porter Paints
  180    Worth Realty
  181    Peconic Bay Medical Center
  182    N/A
  183    Family Dollar, Inc.
  184    Giant Eagle, Inc (GetGo Gas Station)


             LARGEST          LARGEST                                 2ND LARGEST                             2ND LARGEST
CONTROL    TENANT AREA     TENANT LEASE                                 TENANT                                TENANT AREA
  NO.    LEASED (SQ. FT.)    EXP. DATE                                   NAME                              LEASED (SQ. FT.)
---------------------------------------------------------------------------------------------------------------------------

   1              276,636     5/20/2021  Mitsubishi International Corporation                                        89,302
   2              917,154    11/30/2020  Ropes & Gray                                                               245,781
   3                  N/A           N/A  N/A                                                                            N/A
  3A1                 N/A           N/A  N/A                                                                            N/A
  3A2                 N/A           N/A  N/A                                                                            N/A
  3A3                 N/A           N/A  N/A                                                                            N/A
  3A4                 N/A           N/A  N/A                                                                            N/A
  3A5                 N/A           N/A  N/A                                                                            N/A
  3A6                 N/A           N/A  N/A                                                                            N/A
  3A7                 N/A           N/A  N/A                                                                            N/A
  3A8                 N/A           N/A  N/A                                                                            N/A
  3A9                 N/A           N/A  N/A                                                                            N/A
  3A10                N/A           N/A  N/A                                                                            N/A
  3A11                N/A           N/A  N/A                                                                            N/A
  3A12                N/A           N/A  N/A                                                                            N/A
  3A13                N/A           N/A  N/A                                                                            N/A
  3A14                N/A           N/A  N/A                                                                            N/A
  3A15                N/A           N/A  N/A                                                                            N/A
  3A16                N/A           N/A  N/A                                                                            N/A
  3A17                N/A           N/A  N/A                                                                            N/A
  3A18                N/A           N/A  N/A                                                                            N/A
  3A19                N/A           N/A  N/A                                                                            N/A
  3A20                N/A           N/A  N/A                                                                            N/A
  3A21                N/A           N/A  N/A                                                                            N/A
  3A22                N/A           N/A  N/A                                                                            N/A
  3A23                N/A           N/A  N/A                                                                            N/A
  3A24                N/A           N/A  N/A                                                                            N/A
  3A25                N/A           N/A  N/A                                                                            N/A
  3A26                N/A           N/A  N/A                                                                            N/A
  3A27                N/A           N/A  N/A                                                                            N/A
  3A28                N/A           N/A  N/A                                                                            N/A
  3A29                N/A           N/A  N/A                                                                            N/A
  3A30                N/A           N/A  N/A                                                                            N/A
  3A31                N/A           N/A  N/A                                                                            N/A
  3A32                N/A           N/A  N/A                                                                            N/A
  3A33                N/A           N/A  N/A                                                                            N/A
  3A34                N/A           N/A  N/A                                                                            N/A
  3A35                N/A           N/A  N/A                                                                            N/A
  3A36                N/A           N/A  N/A                                                                            N/A
  3A37                N/A           N/A  N/A                                                                            N/A
  3A38                N/A           N/A  N/A                                                                            N/A
  3A39                N/A           N/A  N/A                                                                            N/A
  3A40                N/A           N/A  N/A                                                                            N/A
  3A41                N/A           N/A  N/A                                                                            N/A
  3A42                N/A           N/A  N/A                                                                            N/A
  3A43                N/A           N/A  N/A                                                                            N/A
  3A44                N/A           N/A  N/A                                                                            N/A
  3A45                N/A           N/A  N/A                                                                            N/A
  3A46                N/A           N/A  N/A                                                                            N/A
  3A47                N/A           N/A  N/A                                                                            N/A
  3A48                N/A           N/A  N/A                                                                            N/A
  3A49                N/A           N/A  N/A                                                                            N/A
  3A50                N/A           N/A  N/A                                                                            N/A
  3A51                N/A           N/A  N/A                                                                            N/A
  3A52                N/A           N/A  N/A                                                                            N/A
  3A53                N/A           N/A  N/A                                                                            N/A
  3A54                N/A           N/A  N/A                                                                            N/A
  3A55                N/A           N/A  N/A                                                                            N/A
  3A56                N/A           N/A  N/A                                                                            N/A
  3A57                N/A           N/A  N/A                                                                            N/A
  3A58                N/A           N/A  N/A                                                                            N/A
  3A59                N/A           N/A  N/A                                                                            N/A
  3A60                N/A           N/A  N/A                                                                            N/A
  3A61                N/A           N/A  N/A                                                                            N/A
  3A62                N/A           N/A  N/A                                                                            N/A
  3A63                N/A           N/A  N/A                                                                            N/A
  3A64                N/A           N/A  N/A                                                                            N/A
  3A65                N/A           N/A  N/A                                                                            N/A
  3A66                N/A           N/A  N/A                                                                            N/A
  3A67                N/A           N/A  N/A                                                                            N/A
  3A68                N/A           N/A  N/A                                                                            N/A
  3A69                N/A           N/A  N/A                                                                            N/A
  3A70                N/A           N/A  N/A                                                                            N/A
  3A71                N/A           N/A  N/A                                                                            N/A
  3A72                N/A           N/A  N/A                                                                            N/A
  3A73                N/A           N/A  N/A                                                                            N/A
  3A74                N/A           N/A  N/A                                                                            N/A
  3A75                N/A           N/A  N/A                                                                            N/A
  3A76                N/A           N/A  N/A                                                                            N/A
  3A77                N/A           N/A  N/A                                                                            N/A
  3A78                N/A           N/A  N/A                                                                            N/A
  3A79                N/A           N/A  N/A                                                                            N/A
  3A80                N/A           N/A  N/A                                                                            N/A
  3A81                N/A           N/A  N/A                                                                            N/A
  3A82                N/A           N/A  N/A                                                                            N/A
   4               70,834     9/30/2009  Pfizer                                                                      62,974
   5               94,590     4/30/2009  AIG Aviation, Inc.                                                          51,059
   6                  N/A           N/A  N/A                                                                            N/A
  6A1             108,858     3/31/2016  TASC                                                                        49,300
  6A2              44,906     9/30/2009  CDW Government Inc.                                                         19,001
   7                  N/A           N/A  N/A                                                                            N/A
  7A1              48,159     8/29/2020  N/A                                                                            N/A
  7A2              77,674     2/28/2011  N/A                                                                            N/A
  7A3             178,174     6/30/2012  N/A                                                                            N/A
  7A4              25,531    12/18/2011  N/A                                                                            N/A
  7A5              66,050     9/30/2008  N/A                                                                            N/A
  7A6              16,151     7/17/2018  N/A                                                                            N/A
  7A7              21,612     10/9/2017  N/A                                                                            N/A
  7A8              55,090     6/10/2009  N/A                                                                            N/A
  7A9              39,444      9/9/2011  N/A                                                                            N/A
  7A10             19,160     3/23/2023  N/A                                                                            N/A
  7A11             40,708     6/30/2007  N/A                                                                            N/A
  7A12             32,041     4/18/2011  N/A                                                                            N/A
  7A13             45,990    10/31/2011  N/A                                                                            N/A
  7A14             16,240    10/31/2018  N/A                                                                            N/A
  7A15             14,000     11/5/2012  N/A                                                                            N/A
  7A16             15,310     10/2/2010  N/A                                                                            N/A
  7A17             36,580     8/31/2012  N/A                                                                            N/A
  7A18             21,217     7/16/2012  N/A                                                                            N/A
  7A19             48,680     9/30/2011  N/A                                                                            N/A
  7A20             14,512     3/17/2012  N/A                                                                            N/A
  7A21             13,330     3/31/2011  N/A                                                                            N/A
  7A22             21,472    12/31/2010  N/A                                                                            N/A
  7A23             26,800     1/31/2009  N/A                                                                            N/A
  7A24             12,219    10/12/2010  N/A                                                                            N/A
  7A25             23,467     3/31/2012  N/A                                                                            N/A
  7A26              8,432      4/6/2013  N/A                                                                            N/A
  7A27             18,044     8/31/2008  N/A                                                                            N/A
  7A28              8,695    12/17/2021  N/A                                                                            N/A
  7A29              6,610    10/11/2020  N/A                                                                            N/A
  7A30             16,980     8/31/2008  N/A                                                                            N/A
  7A31              7,204      8/1/2021  N/A                                                                            N/A
  7A32             13,914     1/19/2009  N/A                                                                            N/A
  7A33             10,368     8/31/2012  N/A                                                                            N/A
  7A34              4,415     1/10/2020  N/A                                                                            N/A
  7A35              8,344     5/31/2007  N/A                                                                            N/A
  7A36              8,125     8/31/2010  N/A                                                                            N/A
  7A37              5,865     8/31/2008  N/A                                                                            N/A
  7A38              3,750     8/31/2009  N/A                                                                            N/A
   8                  N/A           N/A  N/A                                                                            N/A
  8A1              14,000    11/30/2022  Tuesday Morning, Inc.                                                       12,016
  8A2              35,534    12/30/2010  Tuesday Morning, Inc.                                                        8,220
  8A3              43,723     6/11/2007  Frazee Industries, Inc.                                                      8,447
  8A4              14,548     1/28/2020  Dollar Tree Stores, Inc.                                                    12,000
  8A5               8,396     3/14/2009  All-Med Health Care Inc.                                                     7,950
  8A6               9,400     1/31/2011  Cornerstone Productions, Inc.                                                9,100
  8A7               3,477      7/4/2011  Team Orthodontics, PC                                                        2,478
  8A8               2,419    10/31/2009  Manuel & Angie Rivas                                                         1,650
  8A9               8,460    10/10/2009  Aaron Rents, Inc.                                                            7,366
  8A10              4,236      7/4/2008  Cesar Bedoya and Sylvia Ceballos                                             3,062
  8A11              9,100     3/26/2010  Acme Print Screen Printing                                                   2,323
  8A12              6,039    12/31/2007  N/A                                                                            N/A
  8A13              8,000      8/4/2009  Wholesale Wood and Tile, Inc.                                                4,100
  8A14              2,000     5/30/2009  TKD Academies, Inc.                                                          1,996
   9              130,390     7/31/2008  Shapiro Fussel & Wedge                                                      23,586
   10                 N/A           N/A  N/A                                                                            N/A
  10A1                N/A           N/A  N/A                                                                            N/A
  10A2                N/A           N/A  N/A                                                                            N/A
  10A3                N/A           N/A  N/A                                                                            N/A
  10A4                N/A           N/A  N/A                                                                            N/A
  10A5                N/A           N/A  N/A                                                                            N/A
   11                 N/A           N/A  N/A                                                                            N/A
  11A1                N/A           N/A  N/A                                                                            N/A
  11A2                N/A           N/A  N/A                                                                            N/A
  11A3                N/A           N/A  N/A                                                                            N/A
  11A4                N/A           N/A  N/A                                                                            N/A
  11A5                N/A           N/A  N/A                                                                            N/A
  11A6                N/A           N/A  N/A                                                                            N/A
  11A7                N/A           N/A  N/A                                                                            N/A
  11A8                N/A           N/A  N/A                                                                            N/A
  11A9                N/A           N/A  N/A                                                                            N/A
 11A10                N/A           N/A  N/A                                                                            N/A
   12             134,739    10/31/2031  N/A                                                                            N/A
   13              12,634     1/31/2010  Crazy Louie's                                                                7,614
   14                 N/A           N/A  N/A                                                                            N/A
  14A1             40,877    10/31/2010  Chase Manhattan Bank                                                        24,282
  14A2             34,267     9/30/2015  Ericsson                                                                    12,976
   15                 N/A           N/A  N/A                                                                            N/A
   16             206,000      8/9/2057  Belk                                                                       180,230
   17              26,501     8/31/2020  Zara USA, Inc.                                                               9,881
   18                 N/A           N/A  N/A                                                                            N/A
   19              44,422    12/31/2013  County of Santa Barbara                                                     43,068
   20                 N/A           N/A  N/A                                                                            N/A
  20A1                N/A           N/A  N/A                                                                            N/A
  20A2                N/A           N/A  N/A                                                                            N/A
  20A3                N/A           N/A  N/A                                                                            N/A
   21                 N/A           N/A  N/A                                                                            N/A
   22              29,836     7/31/2012  Consulate of Israel                                                         15,168
   23              30,910     1/31/2016  Ross                                                                        30,173
   24              36,303      8/9/2008  The City of Los Angeles (Department of Fire and Police Pensions)            34,874
   25              71,408     7/31/2009  Carmike Cinemas                                                             38,853
   26                 N/A           N/A  N/A                                                                            N/A
   27              25,370     8/31/2010  EAC, Inc.                                                                   20,331
   28              55,000     5/31/2017  JoAnn Fabrics                                                               35,000
   29              34,000     1/31/2015  Fresh Market, Inc.                                                          19,600
   30              67,000     6/30/2016  N/A                                                                            N/A
   31                 N/A           N/A  N/A                                                                            N/A
   32                 N/A           N/A  N/A                                                                            N/A
   33                 N/A           N/A  N/A                                                                            N/A
   34              94,841     3/31/2019  The Penn Traffic Co.                                                        51,658
   35               6,000     6/30/2007  Kaplan, Inc.                                                                 4,300
   36              16,553    10/31/2011  Mississippi Lime Company                                                    13,608
   37              62,753    12/31/2015  FMI Corporation                                                             23,877
   38                 N/A           N/A  N/A                                                                            N/A
   39                 N/A           N/A  N/A                                                                            N/A
   40              45,000     9/30/2015  Verizon Wireless                                                             3,500
   41              11,200     6/30/2013  Red Panda Buffet                                                             5,600
   42                 N/A           N/A  N/A                                                                            N/A
   43                 N/A           N/A  N/A                                                                            N/A
   44              60,334    11/10/2007  J.C. Penney                                                                 34,364
   45               6,747     10/4/2009  Kinko's                                                                      6,580
   46              65,000    11/30/2025  Jing Sheng Jiang                                                             3,200
   47                 N/A           N/A  N/A                                                                            N/A
   48                 N/A           N/A  N/A                                                                            N/A
   49                 N/A           N/A  N/A                                                                            N/A
  49A1              7,000     6/30/2021  N/A                                                                            N/A
  49A2              4,678     6/30/2021  N/A                                                                            N/A
  49A3              3,550     6/30/2021  N/A                                                                            N/A
  49A4              4,100     6/30/2021  N/A                                                                            N/A
  49A5              3,600     6/30/2021  N/A                                                                            N/A
  49A6              3,300     6/30/2021  N/A                                                                            N/A
  49A7              2,900     6/30/2021  N/A                                                                            N/A
  49A8              2,600     6/30/2021  N/A                                                                            N/A
  49A9              2,550     6/30/2021  N/A                                                                            N/A
 49A10              2,400     6/30/2021  N/A                                                                            N/A
 49A11              3,900     6/30/2021  N/A                                                                            N/A
 49A12              2,684     6/30/2021  N/A                                                                            N/A
   50              54,856     5/31/2026  Master Lease RBMG                                                           13,277
   51                 N/A           N/A  N/A                                                                            N/A
   52             102,513    10/22/2031  N/A                                                                            N/A
   53              22,929     3/31/2010  Webtec Converting, LLC                                                      17,217
   54                 N/A           N/A  N/A                                                                            N/A
  54A1              6,117     6/30/2021  N/A                                                                            N/A
  54A2              4,274     6/30/2021  N/A                                                                            N/A
  54A3              2,862     6/30/2021  N/A                                                                            N/A
  54A4              2,700     6/30/2021  N/A                                                                            N/A
  54A5              1,921     6/30/2021  N/A                                                                            N/A
   55              20,468     3/31/2017  MMI Products                                                                20,456
   56              60,000     9/26/2020  Ross Stores, Inc.                                                           27,200
   57              57,500     3/31/2016  Crafts & Stuff                                                              12,000
   58                 N/A           N/A  N/A                                                                            N/A
   59              46,785     8/31/2021  Dry Clean                                                                    1,300
   60              12,696     4/30/2010  Pediatric Neurology                                                          7,850
   61              39,671     8/31/2026  KFC of Carmel, Inc.                                                          2,600
   62                 N/A           N/A  N/A                                                                            N/A
   63                 N/A           N/A  N/A                                                                            N/A
  63A1                N/A           N/A  N/A                                                                            N/A
  63A2                N/A           N/A  N/A                                                                            N/A
  63A3                N/A           N/A  N/A                                                                            N/A
  63A4                N/A           N/A  N/A                                                                            N/A
   64                 N/A           N/A  N/A                                                                            N/A
  64A1              6,050     7/31/2021  N/A                                                                            N/A
  64A2              4,075     7/31/2021  N/A                                                                            N/A
  64A3              5,400     7/31/2021  N/A                                                                            N/A
  64A4              3,440     7/31/2021  N/A                                                                            N/A
  64A5              5,918     7/31/2021  N/A                                                                            N/A
   65                 N/A           N/A  N/A                                                                            N/A
  65A1             13,813     2/28/2026  N/A                                                                            N/A
  65A2             14,560     9/30/2028  N/A                                                                            N/A
   66                 N/A           N/A  N/A                                                                            N/A
   67                 N/A           N/A  N/A                                                                            N/A
  67A1              6,785     7/31/2021  N/A                                                                            N/A
  67A2              5,595     7/31/2021  N/A                                                                            N/A
  67A3              3,168     7/31/2021  N/A                                                                            N/A
  67A4              3,300     7/31/2021  N/A                                                                            N/A
  67A5              1,766     7/31/2021  N/A                                                                            N/A
  67A6              1,305     9/30/2021  N/A                                                                            N/A
   68                 N/A           N/A  N/A                                                                            N/A
   69              33,713      6/9/2012  Chapman                                                                      5,601
   70              53,400     2/28/2035  Paw Paw Grill                                                                3,225
   71              34,081    12/14/2010  Netflix                                                                     23,276
   72              16,430     7/31/2009  Everdrive, LLC                                                              16,035
   73             111,570     2/28/2021  N/A                                                                            N/A
   74              41,077    12/31/2009  Gold's Gym                                                                  11,600
   75              19,124    10/31/2009  Technical Transportation, Inc.                                              12,266
   76                 N/A           N/A  N/A                                                                            N/A
  76A1              7,264     7/31/2021  N/A                                                                            N/A
  76A2              2,856     7/31/2021  N/A                                                                            N/A
  76A3              3,518     7/31/2021  N/A                                                                            N/A
  76A4              3,632     7/31/2021  N/A                                                                            N/A
  76A5              2,644     7/31/2021  N/A                                                                            N/A
  76A6              1,035     7/31/2021  N/A                                                                            N/A
  76A7              2,286     7/31/2021  N/A                                                                            N/A
  76A8              1,824     7/31/2021  N/A                                                                            N/A
  76A9                500     7/31/2021  N/A                                                                            N/A
 76A10              1,168     7/31/2021  N/A                                                                            N/A
   77               7,804     6/30/2011  Ivie & Associates                                                            4,108
   78                 N/A           N/A  N/A                                                                            N/A
   79                 N/A           N/A  N/A                                                                            N/A
   80                 N/A           N/A  N/A                                                                            N/A
   81              47,984    12/31/2019  N/A                                                                            N/A
   82                 N/A           N/A  N/A                                                                            N/A
   83                 N/A           N/A  N/A                                                                            N/A
   84              63,000     1/31/2019  N/A                                                                            N/A
   85              13,013    10/29/2031  Commerce Bank                                                                4,500
   86                 N/A           N/A  N/A                                                                            N/A
   87                 N/A           N/A  N/A                                                                            N/A
   88              56,475     5/31/2010  Laundry & Tan Connection                                                    15,225
   89               7,650     9/30/2016  Movie Gallery                                                                5,000
   90              56,780     6/30/2025  Peebles                                                                     19,683
   91                 N/A           N/A  N/A                                                                            N/A
   92                 N/A           N/A  N/A                                                                            N/A
  92A1                N/A           N/A  N/A                                                                            N/A
  92A2                N/A           N/A  N/A                                                                            N/A
   93              34,516     1/31/2012  Office Max                                                                  25,212
   94                 N/A           N/A  N/A                                                                            N/A
   95              45,827     8/24/2022  N/A                                                                            N/A
   96              75,421    10/31/2026  N/A                                                                            N/A
   97                 N/A           N/A  N/A                                                                            N/A
  97A1                N/A           N/A  N/A                                                                            N/A
  97A2                N/A           N/A  N/A                                                                            N/A
   98              45,354    12/31/2009  Family Dollar                                                               10,000
   99                 N/A           N/A  N/A                                                                            N/A
  100              28,800     9/30/2012  Open Arms                                                                    8,640
  101                 N/A           N/A  N/A                                                                            N/A
 101A1                N/A           N/A  N/A                                                                            N/A
 101A2                N/A           N/A  N/A                                                                            N/A
 101A3                N/A           N/A  N/A                                                                            N/A
 101A4                N/A           N/A  N/A                                                                            N/A
 101A5                N/A           N/A  N/A                                                                            N/A
 101A6                N/A           N/A  N/A                                                                            N/A
 101A7                N/A           N/A  N/A                                                                            N/A
 101A8                N/A           N/A  N/A                                                                            N/A
 101A9                N/A           N/A  N/A                                                                            N/A
 101A10               N/A           N/A  N/A                                                                            N/A
 101A11               N/A           N/A  N/A                                                                            N/A
  102               4,150     7/31/2010  Sheltons Salon & Day Spa                                                     4,150
  103                 N/A           N/A  N/A                                                                            N/A
 103A1              6,800     7/31/2021  N/A                                                                            N/A
 103A2              3,234     7/31/2021  N/A                                                                            N/A
 103A3              3,195     7/31/2021  N/A                                                                            N/A
 103A4              2,500     7/31/2021  N/A                                                                            N/A
 103A5              1,980     7/31/2021  N/A                                                                            N/A
 103A6              1,566     7/31/2021  N/A                                                                            N/A
 103A7              1,200     7/31/2021  N/A                                                                            N/A
  104                 N/A           N/A  N/A                                                                            N/A
 104A1              6,313     6/30/2011  N/A                                                                            N/A
 104A2              5,614     6/30/2011  N/A                                                                            N/A
  105                 N/A           N/A  N/A                                                                            N/A
  106                 N/A           N/A  N/A                                                                            N/A
 106A1              4,718     7/31/2021  N/A                                                                            N/A
 106A2              3,600     7/31/2021  N/A                                                                            N/A
 106A3              3,000     7/31/2021  N/A                                                                            N/A
 106A4              2,400     7/31/2021  N/A                                                                            N/A
 106A5              1,288     7/31/2021  N/A                                                                            N/A
  107              53,607    12/31/2012  Big Lots                                                                    35,989
  108              61,752    11/15/2008  Rhee Bros.                                                                  61,487
  109               5,090     7/31/2015  Gerard Gabel, MD and Scott Orth, MD                                          3,648
  110                 N/A           N/A  N/A                                                                            N/A
  111                 N/A           N/A  N/A                                                                            N/A
  112                 N/A           N/A  N/A                                                                            N/A
 112A1              8,127     7/31/2011  N/A                                                                            N/A
 112A2              6,050     7/31/2011  N/A                                                                            N/A
  113                 N/A           N/A  N/A                                                                            N/A
  114              48,052     6/30/2015  Big Lot's                                                                   36,464
  115                 N/A           N/A  N/A                                                                            N/A
 115A1                N/A           N/A  N/A                                                                            N/A
 115A2                N/A           N/A  N/A                                                                            N/A
 115A3                N/A           N/A  N/A                                                                            N/A
  116              14,820     2/28/2081  N/A                                                                            N/A
  117                 N/A           N/A  N/A                                                                            N/A
 117A1              3,154     7/31/2021  N/A                                                                            N/A
 117A2              2,543     7/31/2021  N/A                                                                            N/A
 117A3              2,452     7/31/2021  N/A                                                                            N/A
 117A4              2,336     7/31/2021  N/A                                                                            N/A
 117A5              2,004     7/31/2021  N/A                                                                            N/A
 117A6              1,628     7/31/2021  N/A                                                                            N/A
 117A7              1,591     7/31/2021  N/A                                                                            N/A
 117A8                816     7/31/2021  N/A                                                                            N/A
 117A9                768     7/31/2021  N/A                                                                            N/A
 117A10               864     7/31/2021  N/A                                                                            N/A
  118                 N/A           N/A  N/A                                                                            N/A
  119              14,820     9/30/2081  N/A                                                                            N/A
  120                 N/A           N/A  N/A                                                                            N/A
  121              13,905    10/31/2019  N/A                                                                            N/A
  122                 N/A           N/A  N/A                                                                            N/A
  123              10,975    12/31/2009  NetDevil                                                                     9,641
  124              14,700    10/31/2008  Randall Spencer dba Petra Engineering                                        6,150
  125                 N/A           N/A  N/A                                                                            N/A
 125A1                N/A           N/A  N/A                                                                            N/A
 125A2                N/A           N/A  N/A                                                                            N/A
  126                 N/A           N/A  N/A                                                                            N/A
  127                 N/A           N/A  Various                                                                        N/A
  128                 N/A           N/A  N/A                                                                            N/A
  129              12,178    12/31/2007  Rain Bird Corporation                                                       12,005
  130              14,384     5/31/2013  Joint and Spine Center, Inc.                                                 5,084
  131                 N/A           N/A  N/A                                                                            N/A
  132                 N/A           N/A  N/A                                                                            N/A
  133                 N/A           N/A  N/A                                                                            N/A
 133A1              3,602     6/30/2011  N/A                                                                            N/A
 133A2              3,000     6/30/2011  N/A                                                                            N/A
 133A3              4,000     6/30/2011  N/A                                                                            N/A
  134               3,020     1/31/2010  Body & Soul Day Spa                                                          2,497
  135                 N/A           N/A  N/A                                                                            N/A
  136                 N/A           N/A  N/A                                                                            N/A
  137              11,157    10/31/2026  N/A                                                                            N/A
  138                 N/A           N/A  N/A                                                                            N/A
 138A1              5,300     7/31/2011  N/A                                                                            N/A
 138A2              3,478     7/31/2011  N/A                                                                            N/A
 138A3              3,600     7/31/2011  N/A                                                                            N/A
  139                 N/A           N/A  N/A                                                                            N/A
 139A1              4,050     7/31/2021  N/A                                                                            N/A
 139A2              2,875     7/31/2021  N/A                                                                            N/A
 139A3              2,580     7/31/2021  N/A                                                                            N/A
 139A4              1,620     7/31/2021  N/A                                                                            N/A
 139A5              1,430     7/31/2021  N/A                                                                            N/A
  140              14,820     5/31/2081  N/A                                                                            N/A
  141               5,561     3/31/2012  Family Christian Bookstores                                                  5,488
  142              14,820     2/28/2081  N/A                                                                            N/A
  143                 N/A           N/A  N/A                                                                            N/A
  144                 N/A           N/A  N/A                                                                            N/A
 144A1              8,062     7/31/2011  N/A                                                                            N/A
 144A2              5,808     7/31/2011  N/A                                                                            N/A
 144A3              3,234     7/31/2011  N/A                                                                            N/A
  145               5,760    10/31/2008  Mario Cardinali and Rosalinda Cardinali dba Mario Ventures, Inc.             5,300
  146              10,000     1/31/2011  Kuykendahl Medical Center                                                    4,000
  147                 N/A           N/A  N/A                                                                            N/A
  148               4,120     8/31/2008  First Command Financial Services, Inc.                                       3,360
  149              10,861     8/27/2021  N/A                                                                            N/A
  150               5,191    11/30/2013  Piccomolo                                                                    2,000
  151              28,000     7/27/2024  Family Dollar                                                                9,180
  152                 N/A           N/A  N/A                                                                            N/A
 152A1              4,350     6/30/2011  N/A                                                                            N/A
 152A2              2,850     6/30/2011  N/A                                                                            N/A
  153                 N/A           N/A  N/A                                                                            N/A
  154               2,540    11/19/2015  Pasta Bella                                                                  2,370
  155                 N/A           N/A  N/A                                                                            N/A
 155A1                N/A           N/A  N/A                                                                            N/A
 155A2                N/A           N/A  N/A                                                                            N/A
  156                 N/A           N/A  N/A                                                                            N/A
 156A1              3,160      3/1/2009  Uniko Sushi                                                                  2,200
 156A2              2,744      5/1/2026  N/A                                                                            N/A
  157                 N/A           N/A  N/A                                                                            N/A
  158              28,197     2/28/2017  N/A                                                                            N/A
  159                 N/A           N/A  N/A                                                                            N/A
 159A1              4,184     6/30/2011  N/A                                                                            N/A
 159A2              3,169     6/30/2011  N/A                                                                            N/A
  160              35,000    12/13/2015  Cato Corporation                                                             4,500
  161              16,551     5/31/2012  N/A                                                                            N/A
  162                 N/A           N/A  N/A                                                                            N/A
  163               4,806    10/31/2007  Nova Property Management, Inc.                                               4,060
  164                 N/A           N/A  N/A                                                                            N/A
  165              33,000     7/17/2009  Dollar Tree Stores                                                           7,500
  166                 N/A           N/A  N/A                                                                            N/A
  167                 N/A           N/A  N/A                                                                            N/A
  168              30,600     1/12/2012  Rent A Center                                                                4,400
  169               3,997     4/30/2010  Cumming Family Medicine, Inc.                                                3,375
  170                 N/A           N/A  N/A                                                                            N/A
 170A1              3,928     6/30/2011  N/A                                                                            N/A
 170A2              2,913     6/30/2011  N/A                                                                            N/A
  171               3,268     2/28/2015  Panda Garden                                                                 2,400
  172               5,319    12/31/2008  Vanderbilt Medical Group                                                     4,870
  173               8,000     1/31/2010  Carrol West                                                                  7,092
  174                 N/A           N/A  N/A                                                                            N/A
  175               3,713      5/1/2007  A.G. Edwards                                                                 3,700
  176               5,803           N/A  AMCO Property Management                                                     3,825
  177               2,330     1/31/2011  CK Wines, LP                                                                 1,924
  178               5,963     2/28/2020  Fresh Start Restaurant                                                       4,373
  179               3,761     3/31/2012  Physiotherapy Associates                                                     2,587
  180               1,500    10/31/2008  Evernia Properties, LLP                                                      1,500
  181               2,500     3/14/2016  Jack A. Nelson, DDS, P.C.                                                    1,500
  182                 N/A           N/A  N/A                                                                            N/A
  183              14,500    12/31/2016  N/A                                                                            N/A
  184               1,895     2/28/2019  N/A                                                                            N/A


          2ND LARGEST                                          3RD LARGEST                                           3RD LARGEST
CONTROL  TENANT LEASE                                           TENANT                                               TENANT AREA
  NO.      EXP. DATE                                              NAME                                            LEASED (SQ. FT.)
----------------------------------------------------------------------------------------------------------------------------------

   1        4/20/2007                                                                   Metallgesellschaft Corp.            78,000
   2        2/28/2027                                                                    Westdeutsche Landesbank           150,440
   3              N/A                                                                                        N/A               N/A
  3A1             N/A                                                                                        N/A               N/A
  3A2             N/A                                                                                        N/A               N/A
  3A3             N/A                                                                                        N/A               N/A
  3A4             N/A                                                                                        N/A               N/A
  3A5             N/A                                                                                        N/A               N/A
  3A6             N/A                                                                                        N/A               N/A
  3A7             N/A                                                                                        N/A               N/A
  3A8             N/A                                                                                        N/A               N/A
  3A9             N/A                                                                                        N/A               N/A
  3A10            N/A                                                                                        N/A               N/A
  3A11            N/A                                                                                        N/A               N/A
  3A12            N/A                                                                                        N/A               N/A
  3A13            N/A                                                                                        N/A               N/A
  3A14            N/A                                                                                        N/A               N/A
  3A15            N/A                                                                                        N/A               N/A
  3A16            N/A                                                                                        N/A               N/A
  3A17            N/A                                                                                        N/A               N/A
  3A18            N/A                                                                                        N/A               N/A
  3A19            N/A                                                                                        N/A               N/A
  3A20            N/A                                                                                        N/A               N/A
  3A21            N/A                                                                                        N/A               N/A
  3A22            N/A                                                                                        N/A               N/A
  3A23            N/A                                                                                        N/A               N/A
  3A24            N/A                                                                                        N/A               N/A
  3A25            N/A                                                                                        N/A               N/A
  3A26            N/A                                                                                        N/A               N/A
  3A27            N/A                                                                                        N/A               N/A
  3A28            N/A                                                                                        N/A               N/A
  3A29            N/A                                                                                        N/A               N/A
  3A30            N/A                                                                                        N/A               N/A
  3A31            N/A                                                                                        N/A               N/A
  3A32            N/A                                                                                        N/A               N/A
  3A33            N/A                                                                                        N/A               N/A
  3A34            N/A                                                                                        N/A               N/A
  3A35            N/A                                                                                        N/A               N/A
  3A36            N/A                                                                                        N/A               N/A
  3A37            N/A                                                                                        N/A               N/A
  3A38            N/A                                                                                        N/A               N/A
  3A39            N/A                                                                                        N/A               N/A
  3A40            N/A                                                                                        N/A               N/A
  3A41            N/A                                                                                        N/A               N/A
  3A42            N/A                                                                                        N/A               N/A
  3A43            N/A                                                                                        N/A               N/A
  3A44            N/A                                                                                        N/A               N/A
  3A45            N/A                                                                                        N/A               N/A
  3A46            N/A                                                                                        N/A               N/A
  3A47            N/A                                                                                        N/A               N/A
  3A48            N/A                                                                                        N/A               N/A
  3A49            N/A                                                                                        N/A               N/A
  3A50            N/A                                                                                        N/A               N/A
  3A51            N/A                                                                                        N/A               N/A
  3A52            N/A                                                                                        N/A               N/A
  3A53            N/A                                                                                        N/A               N/A
  3A54            N/A                                                                                        N/A               N/A
  3A55            N/A                                                                                        N/A               N/A
  3A56            N/A                                                                                        N/A               N/A
  3A57            N/A                                                                                        N/A               N/A
  3A58            N/A                                                                                        N/A               N/A
  3A59            N/A                                                                                        N/A               N/A
  3A60            N/A                                                                                        N/A               N/A
  3A61            N/A                                                                                        N/A               N/A
  3A62            N/A                                                                                        N/A               N/A
  3A63            N/A                                                                                        N/A               N/A
  3A64            N/A                                                                                        N/A               N/A
  3A65            N/A                                                                                        N/A               N/A
  3A66            N/A                                                                                        N/A               N/A
  3A67            N/A                                                                                        N/A               N/A
  3A68            N/A                                                                                        N/A               N/A
  3A69            N/A                                                                                        N/A               N/A
  3A70            N/A                                                                                        N/A               N/A
  3A71            N/A                                                                                        N/A               N/A
  3A72            N/A                                                                                        N/A               N/A
  3A73            N/A                                                                                        N/A               N/A
  3A74            N/A                                                                                        N/A               N/A
  3A75            N/A                                                                                        N/A               N/A
  3A76            N/A                                                                                        N/A               N/A
  3A77            N/A                                                                                        N/A               N/A
  3A78            N/A                                                                                        N/A               N/A
  3A79            N/A                                                                                        N/A               N/A
  3A80            N/A                                                                                        N/A               N/A
  3A81            N/A                                                                                        N/A               N/A
  3A82            N/A                                                                                        N/A               N/A
   4        9/30/2009                                                                        National Amusements            51,511
   5        4/30/2016                                                                       CBS Radio East, Inc.            29,688
   6              N/A                                                                                        N/A               N/A
  6A1       6/30/2008                                                                            Focus Bio-Inova            44,030
  6A2       3/31/2010                                                                               Apptix, Inc.            18,981
   7              N/A                                                                                        N/A               N/A
  7A1             N/A                                                                                        N/A               N/A
  7A2             N/A                                                                                        N/A               N/A
  7A3             N/A                                                                                        N/A               N/A
  7A4             N/A                                                                                        N/A               N/A
  7A5             N/A                                                                                        N/A               N/A
  7A6             N/A                                                                                        N/A               N/A
  7A7             N/A                                                                                        N/A               N/A
  7A8             N/A                                                                                        N/A               N/A
  7A9             N/A                                                                                        N/A               N/A
  7A10            N/A                                                                                        N/A               N/A
  7A11            N/A                                                                                        N/A               N/A
  7A12            N/A                                                                                        N/A               N/A
  7A13            N/A                                                                                        N/A               N/A
  7A14            N/A                                                                                        N/A               N/A
  7A15            N/A                                                                                        N/A               N/A
  7A16            N/A                                                                                        N/A               N/A
  7A17            N/A                                                                                        N/A               N/A
  7A18            N/A                                                                                        N/A               N/A
  7A19            N/A                                                                                        N/A               N/A
  7A20            N/A                                                                                        N/A               N/A
  7A21            N/A                                                                                        N/A               N/A
  7A22            N/A                                                                                        N/A               N/A
  7A23            N/A                                                                                        N/A               N/A
  7A24            N/A                                                                                        N/A               N/A
  7A25            N/A                                                                                        N/A               N/A
  7A26            N/A                                                                                        N/A               N/A
  7A27            N/A                                                                                        N/A               N/A
  7A28            N/A                                                                                        N/A               N/A
  7A29            N/A                                                                                        N/A               N/A
  7A30            N/A                                                                                        N/A               N/A
  7A31            N/A                                                                                        N/A               N/A
  7A32            N/A                                                                                        N/A               N/A
  7A33            N/A                                                                                        N/A               N/A
  7A34            N/A                                                                                        N/A               N/A
  7A35            N/A                                                                                        N/A               N/A
  7A36            N/A                                                                                        N/A               N/A
  7A37            N/A                                                                                        N/A               N/A
  7A38            N/A                                                                                        N/A               N/A
   8              N/A                                                                                        N/A               N/A
  8A1       1/15/2012                                                                                   John Q's             9,266
  8A2      12/31/2009                                                                       John C. Lincoln, LLC             4,894
  8A3       1/31/2010                                                                               Tina Roberts             4,833
  8A4       1/31/2008                                                                 Kids World Learning Center             6,532
  8A5      10/14/2007                                                      Bradley J. Binek and Melissa D. Binek             4,550
  8A6       6/30/2010                                                                                        N/A               N/A
  8A7       7/31/2010                                                               M3 Martial Arts Academy, LLC             2,244
  8A8       6/16/2011                                                                   Subway Real Estate Corp.             1,460
  8A9       7/31/2010                                                               Check 'N Go of Arizona, Inc.             2,400
  8A10     11/19/2009                                                                  Basilio Arriola & Orlando             2,400
  8A11       6/9/2009                                                                        The Bridal Boutique             1,484
  8A12            N/A                                                                                        N/A               N/A
  8A13      4/30/2011                                                                                  Pure Soft             1,500
  8A14      2/28/2007                                                          Frank Ramirez and Eleanor Ramirez             1,500
   9        9/30/2007                                                        Atlanta Capital Management Co., LLC            22,540
   10             N/A                                                                                        N/A               N/A
  10A1            N/A                                                                                        N/A               N/A
  10A2            N/A                                                                                        N/A               N/A
  10A3            N/A                                                                                        N/A               N/A
  10A4            N/A                                                                                        N/A               N/A
  10A5            N/A                                                                                        N/A               N/A
   11             N/A                                                                                        N/A               N/A
  11A1            N/A                                                                                        N/A               N/A
  11A2            N/A                                                                                        N/A               N/A
  11A3            N/A                                                                                        N/A               N/A
  11A4            N/A                                                                                        N/A               N/A
  11A5            N/A                                                                                        N/A               N/A
  11A6            N/A                                                                                        N/A               N/A
  11A7            N/A                                                                                        N/A               N/A
  11A8            N/A                                                                                        N/A               N/A
  11A9            N/A                                                                                        N/A               N/A
 11A10            N/A                                                                                        N/A               N/A
   12             N/A                                                                                        N/A               N/A
   13       1/31/2015                                                                                   Marriott             7,070
   14             N/A                                                                                        N/A               N/A
  14A1      6/30/2010                                                                 Morgan Stanley Dean Witter            20,930
  14A2            MTM                                                            International Planning Alliance             9,578
   15             N/A                                                                                        N/A               N/A
   16       7/31/2057                                                            Federated Retail Holdings, Inc.           179,930
   17       7/31/2021                                                                              Commerce Bank             5,500
   18             N/A                                                                                        N/A               N/A
   19      10/31/2008                                                                            Club 24 II Inc.            38,000
   20             N/A                                                                                        N/A               N/A
  20A1            N/A                                                                                        N/A               N/A
  20A2            N/A                                                                                        N/A               N/A
  20A3            N/A                                                                                        N/A               N/A
   21             N/A                                                                                        N/A               N/A
   22       9/30/2011                                                                              Wilcopy, Inc.             7,357
   23       1/31/2016                                                                                   PetSmart            20,066
   24       4/14/2012                                                            General Services Administration            32,764
   25       1/17/2026                                                                                J.C. Penney            38,720
   26             N/A                                                                                        N/A               N/A
   27      12/31/2012                                                                    Premier Education Group            19,028
   28       1/31/2015                                                                        Ross Dress for Less            30,187
   29       2/29/2020                                                         Cardinal Fitness at Cool Creek LLC            10,000
   30             N/A                                                                                        N/A               N/A
   31             N/A                                                                                        N/A               N/A
   32             N/A                                                                                        N/A               N/A
   33             N/A                                                                                        N/A               N/A
   34       9/30/2014                                                                                J.C. Penney            22,764
   35       6/30/2011                                                                 Charles Schwab & Co., Inc.             3,200
   36       5/31/2016                                                                            Enterprise Bank             9,418
   37      12/31/2014                                                                             NC Farm Bureau             8,921
   38             N/A                                                                                        N/A               N/A
   39             N/A                                                                                        N/A               N/A
   40       9/30/2015                                                                                  Starbucks             2,000
   41       1/31/2014                                                                                   7-Eleven             3,400
   42             N/A                                                                                        N/A               N/A
   43             N/A                                                                                        N/A               N/A
   44       8/31/2008                                                                                    Goody's            26,329
   45      11/30/2009                                                                               Panera Bread             5,603
   46      10/31/2011                                                                                   Pet Valu             2,500
   47             N/A                                                                                        N/A               N/A
   48             N/A                                                                                        N/A               N/A
   49             N/A                                                                                        N/A               N/A
  49A1            N/A                                                                                        N/A               N/A
  49A2            N/A                                                                                        N/A               N/A
  49A3            N/A                                                                                        N/A               N/A
  49A4            N/A                                                                                        N/A               N/A
  49A5            N/A                                                                                        N/A               N/A
  49A6            N/A                                                                                        N/A               N/A
  49A7            N/A                                                                                        N/A               N/A
  49A8            N/A                                                                                        N/A               N/A
  49A9            N/A                                                                                        N/A               N/A
 49A10            N/A                                                                                        N/A               N/A
 49A11            N/A                                                                                        N/A               N/A
 49A12            N/A                                                                                        N/A               N/A
   50       9/11/2016                                                       Fine Line Hair, Inc. dba Great Clips             1,300
   51             N/A                                                                                        N/A               N/A
   52             N/A                                                                                        N/A               N/A
   53       9/30/2007                                                                             PPG Industries            10,872
   54             N/A                                                                                        N/A               N/A
  54A1            N/A                                                                                        N/A               N/A
  54A2            N/A                                                                                        N/A               N/A
  54A3            N/A                                                                                        N/A               N/A
  54A4            N/A                                                                                        N/A               N/A
  54A5            N/A                                                                                        N/A               N/A
   55       8/31/2010                                                            General Services Administration            14,483
   56       1/31/2013                                                      Video Warehouse of Cartersville, Inc.             8,640
   57      10/14/2008                                                                          Your Dollar Store             8,350
   58             N/A                                                                                        N/A               N/A
   59      12/31/2009                                                                             Fantastic Sams             1,300
   60       5/31/2008                                                                       1st Ave Construction             5,590
   61       6/30/2012                                                                        Specs Optical, Inc.             1,233
   62             N/A                                                                                        N/A               N/A
   63             N/A                                                                                        N/A               N/A
  63A1            N/A                                                                                        N/A               N/A
  63A2            N/A                                                                                        N/A               N/A
  63A3            N/A                                                                                        N/A               N/A
  63A4            N/A                                                                                        N/A               N/A
   64             N/A                                                                                        N/A               N/A
  64A1            N/A                                                                                        N/A               N/A
  64A2            N/A                                                                                        N/A               N/A
  64A3            N/A                                                                                        N/A               N/A
  64A4            N/A                                                                                        N/A               N/A
  64A5            N/A                                                                                        N/A               N/A
   65             N/A                                                                                        N/A               N/A
  65A1            N/A                                                                                        N/A               N/A
  65A2            N/A                                                                                        N/A               N/A
   66             N/A                                                                                        N/A               N/A
   67             N/A                                                                                        N/A               N/A
  67A1            N/A                                                                                        N/A               N/A
  67A2            N/A                                                                                        N/A               N/A
  67A3            N/A                                                                                        N/A               N/A
  67A4            N/A                                                                                        N/A               N/A
  67A5            N/A                                                                                        N/A               N/A
  67A6            N/A                                                                                        N/A               N/A
   68             N/A                                                                                        N/A               N/A
   69       2/28/2014                                                                         Pinnell & Kingsley             4,479
   70       5/31/2011                                                                           Bellaire Doctors             2,250
   71      11/30/2007                                                                       Denver Nephrologists            11,382
   72       7/31/2007                                                                         The ESP Group, LLC             6,175
   73             N/A                                                                                        N/A               N/A
   74       8/31/2014                                                                          Royal Electronics             3,850
   75       6/30/2011                                                                       Barron Risk Magement             4,798
   76             N/A                                                                                        N/A               N/A
  76A1            N/A                                                                                        N/A               N/A
  76A2            N/A                                                                                        N/A               N/A
  76A3            N/A                                                                                        N/A               N/A
  76A4            N/A                                                                                        N/A               N/A
  76A5            N/A                                                                                        N/A               N/A
  76A6            N/A                                                                                        N/A               N/A
  76A7            N/A                                                                                        N/A               N/A
  76A8            N/A                                                                                        N/A               N/A
  76A9            N/A                                                                                        N/A               N/A
 76A10            N/A                                                                                        N/A               N/A
   77      12/31/2006                                                                     The Morris Legal Group             3,947
   78             N/A                                                                                        N/A               N/A
   79             N/A                                                                                        N/A               N/A
   80             N/A                                                                                        N/A               N/A
   81             N/A                                                                                        N/A               N/A
   82             N/A                                                                                        N/A               N/A
   83             N/A                                                                                        N/A               N/A
   84             N/A                                                                                        N/A               N/A
   85       9/29/2031                                                                                        N/A               N/A
   86             N/A                                                                                        N/A               N/A
   87             N/A                                                                                        N/A               N/A
   88       6/30/2016                                                                       International Buffet             6,900
   89       9/30/2013                                                                              Rent-A-Center             4,200
   90       1/31/2017                                                                        Family Dollar Store             8,239
   91             N/A                                                                                        N/A               N/A
   92             N/A                                                                                        N/A               N/A
  92A1            N/A                                                                                        N/A               N/A
  92A2            N/A                                                                                        N/A               N/A
   93       1/31/2012                                                                             Chuck E Cheese            15,636
   94             N/A                                                                                        N/A               N/A
   95             N/A                                                                                        N/A               N/A
   96             N/A                                                                                        N/A               N/A
   97             N/A                                                                                        N/A               N/A
  97A1            N/A                                                                                        N/A               N/A
  97A2            N/A                                                                                        N/A               N/A
   98      12/31/2007                                                                                 Get It Now             6,336
   99             N/A                                                                                        N/A               N/A
  100       1/31/2010                                                                         Dr. Geoffrey Barst             2,930
  101             N/A                                                                                        N/A               N/A
 101A1            N/A                                                                                        N/A               N/A
 101A2            N/A                                                                                        N/A               N/A
 101A3            N/A                                                                                        N/A               N/A
 101A4            N/A                                                                                        N/A               N/A
 101A5            N/A                                                                                        N/A               N/A
 101A6            N/A                                                                                        N/A               N/A
 101A7            N/A                                                                                        N/A               N/A
 101A8            N/A                                                                                        N/A               N/A
 101A9            N/A                                                                                        N/A               N/A
 101A10           N/A                                                                                        N/A               N/A
 101A11           N/A                                                                                        N/A               N/A
  102      10/31/2011                                                                                 Spice Cafe             2,650
  103             N/A                                                                                        N/A               N/A
 103A1            N/A                                                                                        N/A               N/A
 103A2            N/A                                                                                        N/A               N/A
 103A3            N/A                                                                                        N/A               N/A
 103A4            N/A                                                                                        N/A               N/A
 103A5            N/A                                                                                        N/A               N/A
 103A6            N/A                                                                                        N/A               N/A
 103A7            N/A                                                                                        N/A               N/A
  104             N/A                                                                                        N/A               N/A
 104A1            N/A                                                                                        N/A               N/A
 104A2            N/A                                                                                        N/A               N/A
  105             N/A                                                                                        N/A               N/A
  106             N/A                                                                                        N/A               N/A
 106A1            N/A                                                                                        N/A               N/A
 106A2            N/A                                                                                        N/A               N/A
 106A3            N/A                                                                                        N/A               N/A
 106A4            N/A                                                                                        N/A               N/A
 106A5            N/A                                                                                        N/A               N/A
  107       1/31/2013                                                                        Waterbeds 'n' Stuff             5,000
  108       2/28/2009                                                                                        N/A               N/A
  109       7/31/2009                                                                          Joel Wolinsky, MD             2,965
  110             N/A                                                                                        N/A               N/A
  111             N/A                                                                                        N/A               N/A
  112             N/A                                                                                        N/A               N/A
 112A1            N/A                                                                                        N/A               N/A
 112A2            N/A                                                                                        N/A               N/A
  113             N/A                                                                                        N/A               N/A
  114       1/31/2010                                                                              Family Dollar            10,356
  115             N/A                                                                                        N/A               N/A
 115A1            N/A                                                                                        N/A               N/A
 115A2            N/A                                                                                        N/A               N/A
 115A3            N/A                                                                                        N/A               N/A
  116             N/A                                                                                        N/A               N/A
  117             N/A                                                                                        N/A               N/A
 117A1            N/A                                                                                        N/A               N/A
 117A2            N/A                                                                                        N/A               N/A
 117A3            N/A                                                                                        N/A               N/A
 117A4            N/A                                                                                        N/A               N/A
 117A5            N/A                                                                                        N/A               N/A
 117A6            N/A                                                                                        N/A               N/A
 117A7            N/A                                                                                        N/A               N/A
 117A8            N/A                                                                                        N/A               N/A
 117A9            N/A                                                                                        N/A               N/A
 117A10           N/A                                                                                        N/A               N/A
  118             N/A                                                                                        N/A               N/A
  119             N/A                                                                                        N/A               N/A
  120             N/A                                                                                        N/A               N/A
  121             N/A                                                                                        N/A               N/A
  122             N/A                                                                                        N/A               N/A
  123       6/30/2007                                                                                     Optica             8,888
  124       4/30/2008                                                                       Rainbow Gallery Inc.             5,300
  125             N/A                                                                                        N/A               N/A
 125A1            N/A                                                                                        N/A               N/A
 125A2            N/A                                                                                        N/A               N/A
  126             N/A                                                                                        N/A               N/A
  127             N/A                                                                                    Various               N/A
  128             N/A                                                                                        N/A               N/A
  129       1/31/2010                                                                          KPS Mountain, Inc            10,686
  130        1/1/2018                                                                    David O. Rathke. D.D.S.             2,108
  131             N/A                                                                                        N/A               N/A
  132             N/A                                                                                        N/A               N/A
  133             N/A                                                                                        N/A               N/A
 133A1            N/A                                                                                        N/A               N/A
 133A2            N/A                                                                                        N/A               N/A
 133A3            N/A                                                                                        N/A               N/A
  134       4/30/2011                                                                 Household Financial Center             1,902
  135             N/A                                                                                        N/A               N/A
  136             N/A                                                                                        N/A               N/A
  137             N/A                                                                                        N/A               N/A
  138             N/A                                                                                        N/A               N/A
 138A1            N/A                                                                                        N/A               N/A
 138A2            N/A                                                                                        N/A               N/A
 138A3            N/A                                                                                        N/A               N/A
  139             N/A                                                                                        N/A               N/A
 139A1            N/A                                                                                        N/A               N/A
 139A2            N/A                                                                                        N/A               N/A
 139A3            N/A                                                                                        N/A               N/A
 139A4            N/A                                                                                        N/A               N/A
 139A5            N/A                                                                                        N/A               N/A
  140             N/A                                                                                        N/A               N/A
  141       2/28/2009                                                                       Wells Fargo (Norwest)            2,200
  142             N/A                                                                                        N/A               N/A
  143             N/A                                                                                        N/A               N/A
  144             N/A                                                                                        N/A               N/A
 144A1            N/A                                                                                        N/A               N/A
 144A2            N/A                                                                                        N/A               N/A
 144A3            N/A                                                                                        N/A               N/A
  145       3/14/2008  Remax Select Realty, LLC, Joe DiSalvo and Renae DiSalvo, Ed Rea, Paul Culley and Karen Cull           4,710
  146       1/31/2011                                                                           Dr. Emily Graham             2,100
  147             N/A                                                                                        N/A               N/A
  148      12/31/2007                                                   Creative Capital & Creative Construction             2,280
  149             N/A                                                                                        N/A               N/A
  150       2/28/2010                                                                                Texadelphia             1,860
  151       6/30/2015                                                                              Movie Gallery             3,600
  152             N/A                                                                                        N/A               N/A
 152A1            N/A                                                                                        N/A               N/A
 152A2            N/A                                                                                        N/A               N/A
  153             N/A                                                                                        N/A               N/A
  154       9/30/2016                                                                                   Quizno's             1,400
  155             N/A                                                                                        N/A               N/A
 155A1            N/A                                                                                        N/A               N/A
 155A2            N/A                                                                                        N/A               N/A
  156             N/A                                                                                        N/A               N/A
 156A1       3/1/2010                                                                                Nails Salon             1,200
 156A2            N/A                                                                                        N/A               N/A
  157             N/A                                                                                        N/A               N/A
  158             N/A                                                                                        N/A               N/A
  159             N/A                                                                                        N/A               N/A
 159A1            N/A                                                                                        N/A               N/A
 159A2            N/A                                                                                        N/A               N/A
  160       1/31/2007                                                                                        N/A               N/A
  161             N/A                                                                                        N/A               N/A
  162             N/A                                                                                        N/A               N/A
  163      12/31/2009                                                                 Spurlin and Associates LLC             4,019
  164             N/A                                                                                        N/A               N/A
  165       5/31/2008                                                                                Papas Pizza             3,600
  166             N/A                                                                                        N/A               N/A
  167             N/A                                                                                        N/A               N/A
  168       2/28/2011                                                                               CiCi's Pizza             4,000
  169       5/14/2008                                                                  Open MRI of Georgia, Inc.             3,310
  170             N/A                                                                                        N/A               N/A
 170A1            N/A                                                                                        N/A               N/A
 170A2            N/A                                                                                        N/A               N/A
  171       8/31/2011                                                                  Master Lease Homkor, Inc.             2,123
  172       9/30/2009                                                              Dr.Cox & Dr.Birdwell Dentists             3,944
  173       4/30/2009                                                                                Great Clips             1,492
  174             N/A                                                                                        N/A               N/A
  175       4/30/2011                                                                               Airlinc Comm             1,875
  176      10/31/2011                                                                         Contract Power LLC             2,675
  177       6/30/2011                                                                      Starbucks Corporation             1,505
  178       9/20/2015                                                                        Cold Stone Creamery             1,252
  179       4/15/2011                                                                                    Quiznos             1,600
  180      12/31/2006                                                                              Martini Nails               750
  181       5/31/2018                                                                   Michael Bulanowski, M.D.               800
  182             N/A                                                                                        N/A               N/A
  183             N/A                                                                                        N/A               N/A
  184             N/A                                                                                        N/A               N/A


          3RD LARGEST
CONTROL  TENANT LEASE  CONTROL  FOOTNOTE
  NO.      EXP. DATE     NO.       NO.
----------------------------------------

   1        1/20/2013     1        (1)
   2        6/30/2010     2        (2)
   3              N/A     3        (3)
  3A1             N/A    3A1
  3A2             N/A    3A2
  3A3             N/A    3A3
  3A4             N/A    3A4
  3A5             N/A    3A5
  3A6             N/A    3A6
  3A7             N/A    3A7
  3A8             N/A    3A8
  3A9             N/A    3A9
  3A10            N/A    3A10
  3A11            N/A    3A11
  3A12            N/A    3A12
  3A13            N/A    3A13
  3A14            N/A    3A14
  3A15            N/A    3A15
  3A16            N/A    3A16
  3A17            N/A    3A17
  3A18            N/A    3A18
  3A19            N/A    3A19
  3A20            N/A    3A20
  3A21            N/A    3A21
  3A22            N/A    3A23
  3A23            N/A    3A22
  3A24            N/A    3A24
  3A25            N/A    3A25
  3A26            N/A    3A26
  3A27            N/A    3A27
  3A28            N/A    3A28
  3A29            N/A    3A29
  3A30            N/A    3A30
  3A31            N/A    3A31
  3A32            N/A    3A32
  3A33            N/A    3A33
  3A34            N/A    3A34
  3A35            N/A    3A35
  3A36            N/A    3A36
  3A37            N/A    3A37
  3A38            N/A    3A38
  3A39            N/A    3A39
  3A40            N/A    3A40
  3A41            N/A    3A41
  3A42            N/A    3A42
  3A43            N/A    3A43
  3A44            N/A    3A44
  3A45            N/A    3A45
  3A46            N/A    3A46
  3A47            N/A    3A47
  3A48            N/A    3A48
  3A49            N/A    3A49
  3A50            N/A    3A50
  3A51            N/A    3A51
  3A52            N/A    3A52
  3A53            N/A    3A53
  3A54            N/A    3A54
  3A55            N/A    3A55
  3A56            N/A    3A56
  3A57            N/A    3A57
  3A58            N/A    3A58
  3A59            N/A    3A59
  3A60            N/A    3A60
  3A61            N/A    3A61
  3A62            N/A    3A63
  3A63            N/A    3A62
  3A64            N/A    3A64
  3A65            N/A    3A65
  3A66            N/A    3A66
  3A67            N/A    3A67
  3A68            N/A    3A68
  3A69            N/A    3A69
  3A70            N/A    3A70
  3A71            N/A    3A71
  3A72            N/A    3A72
  3A73            N/A    3A73
  3A74            N/A    3A74
  3A75            N/A    3A75
  3A76            N/A    3A76
  3A77            N/A    3A77
  3A78            N/A    3A78
  3A79            N/A    3A79
  3A80            N/A    3A80
  3A81            N/A    3A81
  3A82            N/A    3A82
   4        2/15/2011     4        (4)
   5        1/31/2015     5        (5)
   6              N/A     6
  6A1      10/31/2008    6A1
  6A2       6/30/2010    6A2
   7              N/A     7        (6)
  7A1             N/A    7A1
  7A2             N/A    7A2
  7A3             N/A    7A3
  7A4             N/A    7A4
  7A5             N/A    7A5
  7A6             N/A    7A6
  7A7             N/A    7A7
  7A8             N/A    7A8
  7A9             N/A    7A9
  7A10            N/A    7A10
  7A11            N/A    7A11
  7A12            N/A    7A12
  7A13            N/A    7A13
  7A14            N/A    7A14
  7A15            N/A    7A15
  7A16            N/A    7A16
  7A17            N/A    7A17
  7A18            N/A    7A18
  7A19            N/A    7A19
  7A20            N/A    7A20
  7A21            N/A    7A21
  7A22            N/A    7A22
  7A23            N/A    7A23
  7A24            N/A    7A25
  7A25            N/A    7A24
  7A26            N/A    7A27
  7A27            N/A    7A26
  7A28            N/A    7A28
  7A29            N/A    7A29
  7A30            N/A    7A30
  7A31            N/A    7A31
  7A32            N/A    7A32
  7A33            N/A    7A33
  7A34            N/A    7A34
  7A35            N/A    7A35
  7A36            N/A    7A36
  7A37            N/A    7A37
  7A38            N/A    7A38
   8              N/A     8        (7)
  8A1      12/31/2010    8A1
  8A2       2/28/2008    8A2
  8A3       7/31/2010    8A3
  8A4       7/31/2008    8A4
  8A5       8/13/2009    8A5
  8A6             N/A    8A6
  8A7       9/12/2011    8A7
  8A8       1/31/2007    8A8
  8A9      12/29/2007    8A9
  8A10       7/6/2007    8A10
  8A11     10/31/2008    8A11
  8A12            N/A    8A12
  8A13      7/23/2009    8A13
  8A14      4/30/2009    8A14
   9       12/31/2009     9        (8)
   10             N/A     10       (9)
  10A1            N/A    10A1
  10A2            N/A    10A2
  10A3            N/A    10A3
  10A4            N/A    10A4
  10A5            N/A    10A5
   11             N/A     11      (10)
  11A1            N/A    11A1
  11A2            N/A    11A2
  11A3            N/A    11A3
  11A4            N/A    11A4
  11A5            N/A    11A5
  11A6            N/A    11A6
  11A7            N/A    11A7
  11A8            N/A    11A8
  11A9            N/A    11A9
 11A10            N/A   11A10
   12             N/A     12
   13       1/31/2008     13
   14             N/A     14
  14A1     12/31/2012    14A1
  14A2      6/30/2012    14A2
   15             N/A     15
   16        8/1/2057     16      (11)
   17       3/31/2022     17
   18             N/A     18
   19       8/24/2015     19
   20             N/A     20      (12)
  20A1            N/A    20A1
  20A2            N/A    20A2
  20A3            N/A    20A3
   21             N/A     21
   22       9/30/2009     22
   23       9/30/2015     23
   24       5/31/2007     24      (13)
   25       4/30/2010     25
   26             N/A     26
   27       6/30/2012     27
   28       1/31/2017     28
   29      12/31/2014     29
   30             N/A     30
   31             N/A     31
   32             N/A     32
   33             N/A     33
   34      11/30/2009     34
   35       6/30/2008     35
   36       8/28/2012     36
   37       5/31/2008     37
   38             N/A     38
   39             N/A     39
   40       8/31/2015     40
   41       4/30/2007     41
   42             N/A     42
   43             N/A     43
   44       4/30/2007     44
   45      10/14/2009     45
   46       9/30/2011     46
   47             N/A     47
   48             N/A     48
   49             N/A     49
  49A1            N/A    49A1
  49A2            N/A    49A2
  49A3            N/A    49A3
  49A4            N/A    49A4
  49A5            N/A    49A5
  49A6            N/A    49A6
  49A7            N/A    49A7
  49A8            N/A    49A8
  49A9            N/A    49A9
 49A10            N/A   49A10
 49A11            N/A   49A11
 49A12            N/A   49A12
   50        8/1/2011     50      (14)
   51             N/A     51
   52             N/A     52
   53       3/31/2009     53
   54             N/A     54
  54A1            N/A    54A1
  54A2            N/A    54A2
  54A3            N/A    54A3
  54A4            N/A    54A4
  54A5            N/A    54A5
   55      10/31/2007     55
   56       3/31/2008     56
   57       8/31/2008     57
   58             N/A     58
   59      12/31/2009     59
   60       7/31/2011     60      (15)
   61       2/29/2008     61
   62             N/A     62
   63             N/A     63
  63A1            N/A    63A1
  63A2            N/A    63A2
  63A3            N/A    63A3
  63A4            N/A    63A4
   64             N/A     64
  64A1            N/A    64A1
  64A2            N/A    64A2
  64A3            N/A    64A3
  64A4            N/A    64A4
  64A5            N/A    64A5
   65             N/A     65      (16)
  65A1            N/A    65A1
  65A2            N/A    65A2
   66             N/A     66
   67             N/A     67
  67A1            N/A    67A1
  67A2            N/A    67A2
  67A3            N/A    67A3
  67A4            N/A    67A4
  67A5            N/A    67A5
  67A6            N/A    67A6
   68             N/A     68
   69       8/31/2016     69
   70       4/30/2011     70
   71       7/31/2016     71
   72       2/28/2009     72
   73             N/A     73
   74       1/31/2008     74
   75       9/30/2008     75
   76             N/A     76
  76A1            N/A    76A1
  76A2            N/A    76A2
  76A3            N/A    76A3
  76A4            N/A    76A4
  76A5            N/A    76A5
  76A6            N/A    76A6
  76A7            N/A    76A7
  76A8            N/A    76A8
  76A9            N/A    76A9
 76A10            N/A   76A10
   77       9/30/2009     77
   78             N/A     78
   79             N/A     79
   80             N/A     80
   81             N/A     81
   82             N/A     82
   83             N/A     83
   84             N/A     84
   85             N/A     85
   86             N/A     86
   87             N/A     87
   88       1/31/2015     88
   89       8/31/2011     89
   90      12/31/2010     90
   91             N/A     91
   92             N/A     92      (17)
  92A1            N/A    92A1
  92A2            N/A    92A2
   93      12/31/2013     93
   94             N/A     94
   95             N/A     95
   96             N/A     96
   97             N/A     97
  97A1            N/A    97A1
  97A2            N/A    97A2
   98       2/28/2011     98
   99             N/A     99
  100       4/30/2011    100
  101             N/A    101
 101A1            N/A   101A1
 101A2            N/A   101A2
 101A3            N/A   101A3
 101A4            N/A   101A4
 101A5            N/A   101A5
 101A6            N/A   101A6
 101A7            N/A   101A7
 101A8            N/A   101A8
 101A9            N/A   101A9
 101A10           N/A   101A10
 101A11           N/A   101A11
  102       1/31/2008    102
  103             N/A    103
 103A1            N/A   103A1
 103A2            N/A   103A2
 103A3            N/A   103A3
 103A4            N/A   103A4
 103A5            N/A   103A5
 103A6            N/A   103A6
 103A7            N/A   103A7
  104             N/A    104
 104A1            N/A   104A1
 104A2            N/A   104A2
  105             N/A    105
  106             N/A    106
 106A1            N/A   106A1
 106A2            N/A   106A2
 106A3            N/A   106A3
 106A4            N/A   106A4
 106A5            N/A   106A5
  107       8/31/2009    107
  108             N/A    108
  109       7/31/2009    109
  110             N/A    110
  111             N/A    111
  112             N/A    112
 112A1            N/A   112A1
 112A2            N/A   112A2
  113             N/A    113
  114       6/30/2011    114
  115             N/A    115      (18)
 115A1            N/A   115A1
 115A2            N/A   115A2
 115A3            N/A   115A3
  116             N/A    116      (19)
  117             N/A    117
 117A1            N/A   117A1
 117A2            N/A   117A2
 117A3            N/A   117A3
 117A4            N/A   117A4
 117A5            N/A   117A5
 117A6            N/A   117A6
 117A7            N/A   117A7
 117A8            N/A   117A8
 117A9            N/A   117A9
 117A10           N/A   117A10
  118             N/A    118
  119             N/A    119      (20)
  120             N/A    120
  121             N/A    121      (21)
  122             N/A    122
  123      12/31/2011    123
  124       6/30/2008    124
  125             N/A    125
 125A1            N/A   125A1
 125A2            N/A   125A2
  126             N/A    126
  127             N/A    127
  128             N/A    128      (22)
  129       3/26/2011    129
  130        1/1/2018    130
  131             N/A    131
  132             N/A    132
  133             N/A    133
 133A1            N/A   133A1
 133A2            N/A   133A2
 133A3            N/A   133A3
  134       6/30/2010    134
  135             N/A    135
  136             N/A    136
  137             N/A    137
  138             N/A    138
 138A1            N/A   138A1
 138A2            N/A   138A2
 138A3            N/A   138A3
  139             N/A    139
 139A1            N/A   139A1
 139A2            N/A   139A2
 139A3            N/A   139A3
 139A4            N/A   139A4
 139A5            N/A   139A5
  140             N/A    140      (23)
  141      12/31/2009    141
  142             N/A    142      (24)
  143             N/A    143
  144             N/A    144
 144A1            N/A   144A1
 144A2            N/A   144A2
 144A3            N/A   144A3
  145      12/31/2011    145
  146       3/31/2016    146
  147             N/A    147
  148       9/30/2007    148
  149             N/A    149
  150       7/31/2011    150
  151      10/31/2012    151
  152             N/A    152
 152A1            N/A   152A1
 152A2            N/A   152A2
  153             N/A    153
  154       8/31/2015    154
  155             N/A    155
 155A1            N/A   155A1
 155A2            N/A   155A2
  156             N/A    156
 156A1       2/1/2011   156A1
 156A2            N/A   156A2
  157             N/A    157
  158             N/A    158
  159             N/A    159
 159A1            N/A   159A1
 159A2            N/A   159A2
  160             N/A    160
  161             N/A    161
  162             N/A    162
  163       2/28/2009    163
  164             N/A    164
  165       8/31/2008    165
  166             N/A    166
  167             N/A    167
  168       6/30/2010    168
  169       3/31/2011    169
  170             N/A    170
 170A1            N/A   170A1
 170A2            N/A   170A2
  171       9/18/2011    171      (25)
  172      12/31/2007    172
  173       8/31/2009    173
  174             N/A    174
  175       1/31/2008    175
  176       4/30/2009    176
  177       2/28/2014    177
  178       8/31/2015    178
  179       4/30/2016    179
  180      11/30/2011    180
  181       6/30/2008    181
  182             N/A    182
  183             N/A    183
  184             N/A    184

Annex A-1 Footnotes

All Mortgage Loans With regard to multi-property mortgage loans or cross-collateralized mortgage loans, each such mortgage loan or related mortgaged real property with a particular letter designation in the ‘‘Cross-Collateralized Groups’’ column is either part of a multi-property loan or crossed-collateralized with each of the other mortgage loans or mortgaged properties with the same letter designation.
With regards to Prepayment Provisions, the number in any parenthetical reflects the number of months in the applicable period during which the subject prepayment is in effect.
The weighted average occupancy for multi-property loans is based on allocated loan amounts.
With regards to the ‘‘% of Aggregate Cut-off Date Balance’’ column, 0.0 means the percentage by total cut-off date principal balance is less than 0.05%.
(1)    520 Madison Avenue U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the 520 Madison Avenue Mortgaged Property are projected to be $62,268,782 and $59,666,856 respectively, based on assumed mark-to-market rent adjustment applied to below-market tenant leases, projected increase of building square footage by approxmately 53,174 square feet upon building remeasurement and certain other assumptions.
U/W NCF DSCR is calculated based on in-place U/W NCF. Based on the projected U/W NCF of $59,666,856 (described above) the U/W NCF DSCR should be 2.09x.
Jefferies & Company Inc.’s lease expiration includes 111,945 square feet expiring May 20, 2021, 95,833 square feet expiring October 20, 2014 and 68,858 square feet expiring September 20, 2014.
Mitsubishi International Corporation’s lease expiration includes 66,431 square feet expiring April 20, 2007 and 22,871 square feet expiring May 20, 2007.
Freshfields Bruckhaus Deringer LLP’s lease expiration includes 22,400 square feet expiring October 20, 2008 and 22,400 square feet expiring July 20, 2015.
(2)    1211 Avenue of the Americas The Original Balance, Cut-Off Date Balance, and Monthly Debt Service reflect the 1211 Avenue of the Americas Mortgage Loan, which is part of the 1211 Avenue of the Americas Loan Combination of $675,000,000. The amount of $675,000,000 comprises the two pari passu A Notes.
Commencing 1/1/2007 Ropes & Gray has an option to lease approximately 88,288 square feet of the JP Morgan space.


Annex A-1 Footnotes  — continued

A portion of the JP Morgan space totaling 88,288 square feet has a lease expiration date of 12/31/07, JP Morgan may surrender this space to the landlord beginning 1/1/2007, subject to Ropes & Gray leasing this space from the landlord.
Comprised of three mezzanine loans in the amounts of $104,000,000, $25,000,000 and $146,000,000, respectively. In addition, there is a $25,000,000 unfunded portion of a junior mezzanine facility that is available to be drawn upon. Following the funding and repayment or termination of the $25,000,000 junior mezzanine facility, additional mezzanine financing is permitted up to $95,000,000 subject to DSCR and LTV tests.
The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire 1211 Avenue of the Americas Loan Combination.
U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the 1211 Avenue of the Americas Mortgaged Property are projected to be $91,495,205 and $89,396,417 respectively, based on assumed mark-to-market rent adjustment applied to below-market tenant leases and certain other assumptions.
U/W NCF DSCR is calculated based on in-place U/W NCF and a loan amount comprised of the entire 1211 Avenue of the Americas Loan Combination. The U/W DSCR based on the projected U/W NCF of $89,396,417 (described above) is 2.04x.
(3)    Extendicare Portfolio The Original Balance, Cut-Off Date Balance, and Monthly Debt Service reflect the Extendicare Portfolio Mortgage Loan, which is part of the Extendicare Portfolio Loan Combination of $500,000,000. The amount of $500,000,000 comprises the two pari passu A Notes.
The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire Extendicare Portfolio Loan Combination.
U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Extendicare Mortgaged Property are projected to be $113,817,477 and $111,783,127 respectively.
The appraisal as of date for the Extendicare Portfolio Mortgaged Property known as Parkview Nursing Center is as of September 1, 2006. The appraised values and appraisal as of dates for three of the Extendicare Portfolio Mortgaged Properties are based on stabilized values and stabilized as of dates of January 1, 2007 for River’s Bend Health & Rehab


Annex A-1 Footnotes  — continued

and as of March 1, 2007 for each of Willowcrest Care Center and Heritage Nursing & Rehab Center.
Based on U/W NCF and calculated based on the annualized constant monthly debt service payment commencing with the payment date in December 2009 and on a loan amount comprised of the entire Extendicare Portfolio Loan Combination.
The U/W DSCR and the U/W IO DSCR based on the projected U/W NCF of $111,783,127 are 2.72x and 3.31x, respectively.
One of the Extendicare Portfolio Mortgaged Properties known as Arbors at Dayton Nursing & Subacute Center is a leasehold interest pursuant to a ground lease expiring on or about October 23, 2045. Two of the Extendicare Portfolio Mortgaged Properties known as Cedar Springs Health & Rehab Center and River's Bend Health & Rehab are fee interests in commercial condominium units.
(4)    Reston Town Center The Cut-off Date LTV Ratio and the Maturity LTV Ratio are based solely on the Reston Town Center Mortgage Loan and do not take into account the Reston Town Center Subordinate Non-Trust Loan. The Cut-off Date LTV Ratio and the Maturity LTV Ratio of the entire Reston Town Center Loan Combination are both 55.3%.
Weighted average occupancy based on overall office occupancy of 98.2% and retail occupancy of 97.1% as of October 9, 2006, as weighted based on square footage.
Reflects in-place U/W NCF. Projected U/W NCF based on assumed mark-to market rent adjustments applied to below market tenant leases and certain other lease-up assumptions is $21,520,169.
A small portion of the property is subject to a ground lease. The collateral includes 8,502 sf of retail space located on the ground floor of the neighboring Hyatt Regency expiring October 20, 2095.
U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Reston Town Center Mortgaged Property are projected to be $22,940,322 and $21,520,169 respectively.
(5)    Colony Square Reflects in-place U/W NCF. Projected U/W NCF based on assumed lease-up of vacant space at 95% occupancy at the current weighted average rent at the Colony Square Mortgaged Property is $9,809,136.
Reflects the portion of a $35,000,000 unfunded mezzanine facility allocated to the Colony Square Mortgaged Property.


Annex A-1 Footnotes  — continued

U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Colony Square Mortgaged Property are projected to be $11,312,596 and $9,809,136 respectively.
Based on U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $9,809,136 (described above) is 1.45x.
WebMD, Inc.'s lease provides for a termination option effective 8/31/08 provided the tenant gives notice no later than 11/30/2007 and simultaneously, with the termination notice, pays a fee equal to five months of the then current rent.
(6)    Government Property
               Advisors Portfolio		 The United States of America General Services Administration leases space allocated to various federal agencies, including the Department of Agriculture Forest Service, the United States Postal Service, the Department of Homeland Security, the United States Customs Services, the Social Security Administration, the Bureau of Land Management, the Internal Revenue Services, the US Drug Enforcement Agency, the Department of Veterans Affairs and the Public Buildings Service. Lease expirations at the 22 properties are as follows: one tenant (55,090 square feet) in 2009, two tenants (total of 27,529 square feet) in 2010, five tenants (total of 159,026 square feet) in 2011, four tenants (total of 227,903 square feet) in 2012, one tenant (8,432 square feet) in 2013, and nine tenants (total of 148,246 square feet) after 2013.
The State of Texas leases space allocated to various state agencies, including the Department of Human Services, the Department of Family Protective Services, the Health and Human Services Commission and the Texas Building and Procurement Commission. Lease expirations at the (14) properties are as follows: one tenant (8,344 square feet) in 2007, four tenants (total of 106,939 square feet) in 2008, three tenants (total of 44,464 square feet) in 2009, two tenants (total of 29,597 square feet) in 2010, one tenant (45,990 square feet) in 2011, and three tenants (total of 70,415 square feet) in 2012.
The State of Michigan leases space allocated to the Department of Police.
The State of Ohio leases space allocated to the Department of Administrative Services.
Lease expiration is based on the actual lease expiration date. Various tenants have termination options resulting in potential lease expiration as follows: 245,354 square feet in 2007, 131,611 square feet in 2008, 99,554 square feet in 2009, 57,126 square feet in 2010, 108,000 square feet in 2011, 298,318


Annex A-1 Footnotes  — continued

square feet in 2012, 35,311 square feet in 2013, and 75,083 square feet after 2013. Additionally, 13 leases, totaling 296,190 square feet and 22.6% of base rent, are subject to appropriations clauses that allow for termination based on reduced funding and may occur at any time provided written notice to landlord.
(7)    Arizona Retail Portfolio Occupancy Percentage , U/W Net Cash Flow and U/W NCF DSCR were calculated including 28,875 square feet of recently executed leases with tenants which have not yet taken occupancy. The sponsors have executed a guaranty in the amount of $4,680,456 which represents the approximate proceeds allocable to the cash flow differential between the current in-place cash flow, and the projected cash flow including the recently executed leases. The guaranty amount decreases as tenants take occupancy and commenced paying full unabated rent. The in-place weighted average occupancy is 84.3%. Based on the current in-place net cash flow, the DSCR is 1.13x.
(8)    Midtown Plaza U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Midtown Plaza Mortgaged Property are projected to be $6,597,436 and $5,670,267 respectively.
Based on in place U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $5,670,267 (described above) is 1.49x.
The appraised value includes $4,340,000 for a 0.69 acre development parcel adjacent to the building.
Aggregate appraised value for the Midtown Plaza office buildings and the development parcel. The office buildings were appraised at a value of $89,750,000 and the development parcel was appraised at a value of $4,340,000.
In addition, the collateral includes a 0.69 acre development parcel that can be developed into approximately 300,000 square feet of office or residential space.
(9)    Martin Resorts After the sixth month of the loan term and until one year prior to maturity, the related borrower has the option of releasing one asset from the collateral upon the payment of 125% of the allocated loan amount plus yield maintenance.
Occupancy Percentage of the Mortgage Loan is the weighted average occupancy, weighted based on allocated loan amounts, of each of the Martin Resorts Mortgaged Properties for the trailing 12 months ending July 31, 2006 or, with respect to the Avila Lighthouse Suites property, occupancy is based on the appraiser's analysis of market occupancy, which is higher than the occupancy for the trailing 12 months


Annex A-1 Footnotes  — continued

ending July 31, 2006, as the Avila Lighthouse Suites property opened for business in December 2005 or, with respect to the Shore Cliff Lodge property, occupancy is based on an underwritten occupancy of 84.0%, which is below the occupancy based on the trailing 12 months ending July 31, 2006.
Hospitality Average Daily Rate of the Mortgage Loan is the weighted average ADR of the Martin Resorts Mortgaged Properties, weighted based on the allocated loan amounts of each of the Martin Resorts Mortgaged Properties for the 12 months ending June 30, 2006 or, with respect to the Avila Lighthouse Suites property, is based on the competitive set average ADR, as determined by the appraiser, as the Avila Lighthouse Suites mortgaged property, opened for business in December 2005.
U/W Net Cash Flow and U/W NCF DSCR reflects underwritten net cash flow of the Martin Resorts Mortgaged Properties and is based on occupancy percentages for the trailing 12 months ending July 31, 2006 and ADR values for the trailing 12 months ending June 30, 2006. Except, however, in the case of the Avila Lighthouse Suites mortgaged property, the U/W Net Cash Flow is based on the appraiser's analysis of market occupancy, which is higher than the occupancy for the trailing 12 months ending July 31, 2006, and ADR based on the competitive set as determined by the appraiser, as the Avila Lighthouse Suites property opened for business in December 2005; or, with respect to the Shore Cliff Lodge mortgaged property, occupancy is based on an underwritten occupancy of 84.0%, which is below the occupancy based on the trailing 12 months ending July 31, 2006.
(10)    Wolverine Portfolio The borrower is required to make additional monthly amortization payments, to the extent available from excess cash flow, beginning with the December 2011 payment date and continuing until maturity, in the approximate amount of $48,719.31, which payments will accrue if not made. The failure to make such additional monthly amortization payments will not be an event of default if excess cash flow is not sufficient to make such additional monthly amortization payments. It is assumed in the calculations of Monthly P&I, Annual Debt Service, Balloon Balance, and Balloon LTV that such additional monthly amortization payments will be made, with Monthly P&I and Annual Debt Service being calculated based on the average of the monthly payments due from the payment date in December 2011 through the maturity date. UW Net Cash Flow DSCR is calculated based on interest only payments.
(11)    Triangle Town Center —
                Subordinate Tranche		 Original Balance and Cut-off Date Balance reflect the Triangle Town Center — Subordinate Tranche Mortgage Loan. The Triangle Town Center Non-Trust Loans total


Annex A-1 Footnotes  — continued

$171,000,000. The Triangle Town Center Mortgage Loan Combination totals $200,000,000.
Maturity Date Balance reflects the balance at maturity of the Triangle Town Center — Subordinate Tranche Mortgage Loan. At maturity, the Triangle Town Center Loan Combination is expected to have an outstanding principal balance of $170,713,179.
Original LTV, Cut-Off Date LTV, Maturity Date LTV and U/W NCF DSCR are based on the Triangle Town Center Loan Combination.
Occupancy Percentage, U/W Net Cash Flow and U/W NCF DSCR were calculated including 1,672 square feet of potential leases. The property is a 1,440,865 square-foot regional mall of which 637,516 square feet (including 12,007 square feet of ground lease space, of which only the land is part of the collateral) is collateral. The overall projected underwritten occupancy is 94.8%, with in-line projected occupancy at 84.2%. As of the rent roll dated November 10, 2005, the mortgaged real property was 94.7% leased and 93.7% occupied, with 83.8% of the in-line space leased and 81.1% of the in-line tenants in occupancy. The CBL & Associates Limited Partnership guarantees the amount of $3,948,480, representing proceeds allocable to the differential between the in-place rent at the closing of the mortgage loan and the projected rent. The $3,948,480 guaranty may be releases and/or reduced upon the execution of certain unexecuted leases or replacement tenants for such leases.
The scheduled debt service is based on the Triangle Town Center — Subordinate Tranche Mortgage Loan. The scheduled annual debt service for the Triangle Town Center Loan Combination is approximately $14,367,389.64.
The three largest tenants, Dillard's, Belk and Federated Retail Holdings, Inc. each own their land and improvements and therefore such land and improvements are excluded from the collateral.
(12)    Redwood Portfolio II The borrower is required to make additional monthly amortization payments, to the extent available from excess cash flow, beginning with the October 2011 payment date and continuing until maturity, in the approximate amount of $22,144.02, which payments will accrue if not made. The failure to make such additional monthly amortization payments will not be an event of default if excess cash flow is not sufficient to make such additional monthly amortization payments. It is assumed in the calculations of Monthly P&I, Annual Debt Service, Balloon Balance, and Balloon LTV that such additional monthly amortization payments will be made, with Monthly P&I and Annual Debt Service being calculated based on the average of the monthly payments


Annex A-1 Footnotes  — continued

due from the payment date in October 2011 through the maturity date. UW NCF DSCR is calculated based on interest only payments.
(13)    Brunswig Square Occupancy Percentage, U/W Net Cash Flow and U/W NCF DSCR were calculated including rent from the 10,298 square foot space leased to General Services Administration, which tenant is currently not in occupancy. The tenant has the right to terminate its lease in March 2007 with six months notice. The current lease term expires in March 2012.
(14)    Victor Marketplace Property is 100% leased, but 80.9% occupied. United Properties Investment LLC, a borrower affliate, signed a master dated September 11, 2006 for the remaining 19.1% vacant space at the property at $15.38 per square foot. The master leased space adjusts downward as vacant space is leased and tenants take occupancy.
(15)    Park Place LaPalma The underwritten NCF DSCR and cut-off Date LTV of the MezzCap Loan Combination are 1.08x and 81.9% respectively.
(16)    Drug Store Portfolio —                 Walgreens Walgreen Co. has the option to terminate its lease on the last day of the 300th month of the lease term March 2025, and every five years thereafter, pursuant to the lease.
(17)    Gaffney Portfolio The underwritten NCF DSCR and cut-off Date LTV of the MezzCap Loan Combination are 1.14x and 81.1% respectively.
(18)    Lakewood Apartment
                Portfolio		 The borrower is required to make additional monthly amortization payments, to the extent available from excess cash flow, beginning with the November 2009 payment date and continuing until maturity, in the approximate amount of $4,573.23, which payments will accrue if not made. The failure to make such additional monthly amortization payments will not be an event of default if excess cash flow is not sufficient to make such additional monthly amortization payments. It is assumed in the calculations of Monthly P&I, Annual Debt Service, Balloon Balance, and Balloon LTV that such additional monthly amortization payments will be made, with Monthly P&I and Annual Debt Service being calculated based on the average of the monthly payments due from the payment date in November 2009 through the maturity date. UW Net Cash Flow DSCR is calculated based on interest only payments
(19)    Walgreen's — Henderson Walgreen Co. has the option to terminate its lease on the last day of the 300th month of the lease term February 2031, and every five years thereafter, pursuant to the lease.


Annex A-1 Footnotes  — continued

(20)    Walgreen's — Seguin, Texas Walgreen Co. has the option to terminate its lease on the last day of the 300th month of the lease term March 2031, and every five years thereafter, pursuant to the lease.
(21)    Walgreen's Walgreen Co. has the option to terminate its lease on the last day of the 240th month of the lease term October 2019, and every five years thereafter, pursuant to the lease.
(22)    General McMullen Self
                Storage 		The property is subject to a master lease between Borrower (as landlord) and Evergreen Realty Advisors, Inc. (as tenanat), the property's management company. The lease is dated May 19, 2005 and expires on May 18, 2012. There are three, 5-year renewal options. The lease's current monthly rent is $38,604, however commencing May 2007 the rent will be reduced to $38,333 for the remaining term of the lease. The lease provides for addtional rent in an amount equal to 30.0% of the gross revenues in excess of $775,438, starting on the third lease year (due in July 2008) and 35.0%, commencing in the fifth lease year (due in July 2010). The tenant has the right to purchase the subject at anytime at fair market value.
(23)    Walgreen's — Floyds Knob Walgreen Co. has the option to terminate its lease on the last day of the 300th month of the lease term June 2031, and every five years thereafter, pursuant to the lease.
(24)    Walgreens — Reedsburg Walgreen Co. has the option to terminate its lease on the last day of the 300th month of the lease term (February 2031), and every month thereafter, pursuant to the lease.
(25)    Lambertson Lakes Shopping
                Center Phase II 		Property is 100% leased, but 74.1% occupied. Borrower signed a 5-year master lease for the vacant spaces (one of 2,123 sf and one of 1200 sf) at $18.00 per square foot. Both spaces have a lease expiration of 9/19/11. 




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ANNEX A-2

CERTAIN CHARACTERISTICS OF THE MORTGAGE POOL





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Amortization Types
(Mortgage Pool)


Amortization Types Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
Interest Only 50
$ 1,689,159,587
55.9
%
 $ 33,783,192
$ 475,000,000
58.2
%
 1.61
x
 95.9
%
 6.040
%
Amortizing Balloon(2) 125
1,273,931,852
42.2
10,191,455
250,000,000
70.3
1.54
94.2
6.188
ARD(3) 9
56,567,101
1.9
6,285,233
16,000,000
69.5
1.25
99.0
6.145
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
(1) Excludes mortgage loans secured by hospitality properties.
(2) Includes mortgage loans, representing 31.2% of the initial mortgage pool balance, that provide for payments of interest-only for a specified number of periods, followed by payments of principal and interest up to the maturity date. 52.2% of these loans, by balance, have three years or less of interest-only payments.
(3) Includes mortgage loans, representing 1.4% of the initial mortgage pool balance, that provide for payments of interest-only for a specified number of periods, followed by payments of principal and interest up to the maturity date. 12.9% of these loans, by balance, have three years or less of interest-only payments.

Annex A-2-1



Cut-Off Date Loan-to-Value Ratios
(Mortgage Pool)


Range of Cut-off Date
Loan-to-Value Ratios (%)		 Number of
Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
25.1-30.0 1
$ 3,678,144
0.1
%
 $ 3,678,144
$ 3,678,144
25.7
%
 2.05x
95.9
%
 6.350
%
30.1-35.0 1
121,500,000
4.0
121,500,000
121,500,000
31.8
2.85
97.9
5.501
40.1-45.0 2
750,000,000
24.8
375,000,000
475,000,000
42.9
1.78
99.6
6.104
50.1-55.0 3
9,065,490
0.3
3,021,830
5,293,354
53.4
1.48
91.0
6.190
55.1-60.0 9
48,970,981
1.6
5,441,220
7,800,000
57.7
1.39
93.4
6.069
60.1-65.0 11
348,093,731
11.5
31,644,885
250,000,000
63.2
2.37
93.3
6.447
65.1-70.0 22
419,615,840
13.9
19,073,447
116,000,000
68.4
1.29
93.5
5.973
70.1-75.0 52
435,716,962
14.4
8,379,172
40,000,000
72.6
1.22
93.0
6.100
75.1-80.0 67
805,882,179
26.7
12,028,092
96,476,000
78.7
1.22
93.4
6.108
80.1 >= 16
77,135,212
2.6
4,820,951
9,205,035
84.3
1.20
100.00
6.210
Total: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57x
95.3
%
 6.105
%
Weighted Average Cut-off Date LTV Ratios: 63.5%
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-2-2



Original Term to Maturity
(Mortgage Pool)


Range of Original Terms
to Maturity (Months)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % byTotal
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Original
Term
49 - 60 25
$ 732,968,487
24.3
%
 $ 29,318,739
$ 250,000,000
70.7
%
 1.77x
93.3
%
 6.228
%
 60
73 - 84 3
17,778,951
0.6
5,926,317
10,350,000
77.3
1.21
90.5
5.958
84
109 - 120 155
2,227,911,101
73.8
14,373,620
475,000,000
61.0
1.52
95.9
6.056
120
169 - 180 1
41,000,000
1.4
41,000,000
41,000,000
66.1
1.20
100.0
6.597
180
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
 106
Weighted Average Original Term to Maturity: 106 months.
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-2-3



Remaining Term to Maturity(1)
(Mortgage Pool)


Range of Remaining Terms
to Maturity (Months)		 Number
of Loans		 Total Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Term
49 - 60 25
$ 732,968,487
24.3
%
 $ 29,318,739
$ 250,000,000
70.7
%
 1.77
x
 93.3
%
 6.228
%
 59
73 - 84 3
17,778,951
0.6
5,926,317
10,350,000
77.3
1.21
90.5
5.958
83
109 - 120 155
2,227,911,101
73.8
14,373,620
475,000,000
61.0
1.52
95.9
6.056
119
169 - 180 1
41,000,000
1.4
41,000,000
41,000,000
66.1
1.20
100.0
6.597
180
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
 105
Weighted Average Remaining Term to Maturity: 105 months.
(1) Assumes that each ARD Loan matures on the related anticipated repayment date.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-2-4



Mortgaged Properties by Property Type(1)
(Mortgage Pool)


Property Type Number
of Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd.Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate
Office 72
$ 1,499,287,867
49.7
%
 $ 20,823,443
$ 475,000,000
54.4
%
 1.65x
96.9
%
 6.037
%
Retail 161
652,089,767
21.6
4,050,247
40,000,000
75.1
1.22
95.3
6.065
Multifamily 53
343,158,909
11.4
6,474,696
32,750,000
75.5
1.22
93.3
6.055
Healthcare 82
250,000,000
8.3
3,048,780
8,231,226
63.7
2.72
93.9
6.653
Mobile Home Park 19
88,460,685
2.9
4,655,826
11,550,000
75.2
1.25
80.8
6.265
Hotel 11
72,059,891
2.4
6,550,899
10,750,000
62.5
1.55
-
6.055
Mixed Use 6
55,150,000
1.8
9,191,667
14,500,000
75.0
1.27
94.4
6.041
Self Storage 12
41,718,557
1.4
3,476,546
5,700,000
67.2
1.51
92.5
6.042
Industrial/Warehouse 4
17,732,863
0.6
4,433,216
5,832,863
72.3
1.29
100.0
6.238
Total/Avg/Wtd Avg: 420
$ 3,019,658,539
100.0
%
 $ 7,189,663
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-2-5



Cut-Off Date Principal Balances
(Mortgage Pool)


Range of Cut-off Date
Principal Balances ($)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
<= 2,000,000 12
$ 18,625,787
0.6
%
 $ 1,552,149
$ 1,950,000
67.9
%
 1.29x
97.6
%
 6.309
%
2,000,001. - 4,000,000 55
169,921,303
5.6
3,089,478
4,000,000
72.1
1.31
95.3
6.164
4,000,001. - 6,000,000 37
184,794,624
6.1
4,994,449
6,000,000
73.0
1.29
97.5
6.144
6,000,001. - 8,000,000 19
139,489,940
4.6
7,341,576
8,000,000
74.0
1.24
94.4
6.098
8,000,001. - 10,000,000 14
122,018,393
4.0
8,715,599
10,000,000
77.6
1.23
95.9
6.091
10,000,001. - 15,000,000 16
207,302,765
6.9
12,956,423
15,000,000
75.8
1.26
93.1
6.063
15,000,001. - 20,000,000 5
88,192,239
2.9
17,638,448
19,850,000
70.0
1.24
97.1
5.795
20,000,001. - 25,000,000 8
176,337,488
5.8
22,042,186
23,500,000
75.2
1.21
90.0
6.136
25,000,001. - 50,000,000 9
328,000,000
10.9
36,444,444
50,000,000
72.9
1.25
91.0
6.118
50,000,001. - 75,000,000 1
65,000,000
2.2
65,000,000
65,000,000
69.1
1.40
88.6
5.762
75,000,001. - 100,000,000 3
282,476,000
9.4
94,158,667
100,000,000
76.1
1.19
94.3
6.124
100,000,001. - 150,000,000 2
237,500,000
7.9
118,750,000
121,500,000
49.6
2.13
94.6
5.628
150,000,001. >= 3
1,000,000,000
33.1
333,333,333
475,000,000
48.1
2.02
98.2
6.241
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
Average Cut-off Date Principal Balance:  
$ 16,411,188
 
 
 
 
 
 
 
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-2-6



U/W NCF DSCR
(Mortgage Pool)


Range of U/W NCF
DSCR (x)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % byTotal
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
0.00 - 1.19 21
$ 353,911,471
11.7
%
 $ 16,852,927
$ 100,000,000
72.2
%
 1.15
x
 93.3
%
 6.060
%
1.20 - 1.29 111
1,060,076,705
35.1
9,550,241
96,476,000
76.5
1.22
94.0
6.139
1.30 - 1.39 27
278,638,392
9.2
10,319,940
116,000,000
70.6
1.35
93.4
5.943
1.40 - 1.49 9
110,152,498
3.6
12,239,166
65,000,000
68.8
1.41
90.3
5.827
1.50 - 1.59 5
66,956,080
2.2
13,391,216
50,000,000
62.7
1.56
92.2
6.016
1.60 - 1.69 3
13,350,000
0.4
4,450,000
5,700,000
62.8
1.67
83.1
5.939
1.70 - 1.79 1
475,000,000
15.7
475,000,000
475,000,000
43.2
1.74
99.5
5.923
1.80 - 1.89 3
282,495,251
9.4
94,165,084
275,000,000
43.1
1.86
99.8
6.408
1.90 - 1.99 1
3,900,000
0.1
3,900,000
3,900,000
56.3
1.94
97.1
5.900
2.00 >= 3
375,178,144
12.4
125,059,381
250,000,000
53.0
2.76
95.2
6.276
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
Weighted Average U/W NCF DSCR:            1.57x.
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-2-7



Occupancy Rates(1)(2)
(Mortgage Pool)


Range of Occupancy
Rates (%)		 Number
of Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
   <=    65.0 4
$ 17,639,584
0.6
%
 $ 4,409,896
$ 11,550,000
72.3
%
 1.41
x
 59.5
%
 6.446
%
65.1 - 70.0 2
4,575,539
0.2
2,287,770
2,515,539
71.0
2.04
66.0
6.440
70.1 - 75.0 4
16,153,220
0.5
4,038,305
6,400,000
76.9
1.43
73.9
6.265
75.1 - 80.0 4
22,500,000
0.7
5,625,000
7,950,000
76.0
1.21
77.1
6.293
80.1 - 85.0 20
144,551,118
4.8
7,227,556
40,000,000
73.5
1.31
82.9
6.196
85.1 - 90.0 32
300,861,791
10.0
9,401,931
65,000,000
72.8
1.43
88.3
6.082
90.1 - 95.0 59
585,206,572
19.4
9,918,755
116,000,000
72.2
1.37
92.6
6.063
95.1 >= 284
1,856,110,825
61.5
6,535,601
475,000,000
58.2
1.69
99.1
6.108
Total/Avg/Wtd Avg: 409
$ 2,947,598,648
97.6
%
 $ 7,206,843
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.106
%
Weighted average occupancy rate:            95.3%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-2-8



Remaining Amortization Terms
(Mortgage Pool)


Range of Remaining
Amortization Terms (Months)(1)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(3)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Amortization
Term(4)
Interest Only(2) 50
$ 1,689,159,587
55.9
%
 $ 33,783,192
$ 475,000,000
58.2
%
 1.61
x
 95.9
%
 6.040
%
 0
229 - 240 2
6,173,395
0.2
3,086,697
3,678,144
43.3
1.97
97.6
6.350
238
289 - 300 10
339,640,848
11.2
33,964,085
250,000,000
64.6
2.34
95.2
6.527
300
301 - 312 1
5,194,227
0.2
5,194,227
5,194,227
74.2
1.26
100.0
6.250
311
313 - 324 1
7,491,573
0.2
7,491,573
7,491,573
59.9
1.29
96.9
5.790
323
325 - 336 1
29,000,000
1.0
29,000,000
29,000,000
70.2
1.05
94.8
5.737
336
349 - 360 119
942,998,909
31.2
7,924,361
100,000,000
72.6
1.24
94.1
6.079
360
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
 343
Weighted Average Remaining Amortization Term:    343 months.(4)
(1) Ranges of Remaining Amortization Terms (other than Interest Only) may include mortgage loans that have an interest-only period ending prior to maturity date but exclude mortgage loans that provide for payments of interest only up to the maturity date.
(2) Interest-only up to maturity date.
(3) Excludes mortgage loans secured by hospitality properties.
(4) Includes mortgage loans that have an interest-only period ending prior to maturity date, but excludes mortgage loans that provide for payments of interest only up to maturity date.

Annex A-2-9



Mortgage Rates
(Mortgage Pool)


Range of Mortgage
Rates (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
5.001 - 5.250 1
$ 18,442,239
0.6
%
 $ 18,442,239
$ 18,442,239
69.6
%
 1.33
x
 100.0
%
 5.200
%
5.501 - 5.750 3
161,275,000
5.3
53,758,333
121,500,000
40.9
2.43
96.6
5.546
5.751 - 6.000 44
1,087,090,924
36.0
24,706,612
475,000,000
58.8
1.50
95.8
5.891
6.001 - 6.250 85
927,396,449
30.7
10,910,546
100,000,000
76.2
1.21
94.5
6.137
6.251 - 6.500 48
531,253,928
17.6
11,067,790
275,000,000
57.1
1.58
95.4
6.387
6.501 - 6.750 3
294,200,000
9.7
98,066,667
250,000,000
64.1
2.49
94.5
6.643
Total/Avg/Wtd Avg: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
63.5
%
 1.57
x
 95.3
%
 6.105
%
Weighted Average Mortgage Rate:    6.105%
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-2-10



Maturity Date Loan-to-Value Ratios(1)
(Mortgage Pool)


Range of Maturity Date
Loan-to-Value Ratios (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Maturity Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate
15.1 - 20.0 1
$ 3,678,144
0.1
%
 $ 3,678,144
$ 3,678,144
17.2
%
 2.05
x
 95.9
%
 6.350
%
30.1 - 35.0 1
121,500,000
4.0
121,500,000
121,500,000
31.8
2.85
97.9
5.501
40.1 - 45.0 4
796,293,354
26.4
199,073,338
475,000,000
42.8
1.75
99.6
6.130
45.1 - 50.0 9
36,081,678
1.2
4,009,075
7,493,767
47.4
1.44
93.0
6.057
50.1 - 55.0 5
41,489,417
1.4
8,297,883
18,442,239
53.1
1.36
94.7
5.580
55.1 - 60.0 18
148,781,968
4.9
8,265,665
50,000,000
57.6
1.35
95.8
6.037
60.1 - 65.0 32
438,527,648
14.5
13,703,989
250,000,000
62.2
2.11
94.0
6.412
65.1 - 70.0 48
624,029,743
20.7
13,000,620
116,000,000
67.5
1.25
92.0
6.013
70.1 - 75.0 27
267,497,000
8.9
9,907,296
46,550,000
72.5
1.22
93.4
6.052
75.1 - 80.0 25
468,355,375
15.5
18,734,215
96,476,000
78.8
1.22
93.3
6.134
80.1 - 85.0 9
42,387,003
1.4
4,709,667
9,205,035
83.3
1.20
100.0
6.226
85.1 >= 5
31,037,209
1.0
6,207,442
8,556,920
86.0
1.20
100.0
6.199
Total: 184
$ 3,019,658,540
100.0
%
 $ 16,411,188
$ 475,000,000
60.4
%
 1.57
x
 95.3
%
 6.105
%
Weighted Average Maturity Date LTV Ratio:        60.4%
(1) Assumes that each ARD Loan matures on the related anticipated repayment date.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-2-11



Properties by State(1)
(Mortgage Pool)


State Number of
Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance
NY 40
$ 810,406,795
26.8
%
GA 12
287,964,079
9.5
TX 64
268,777,662
8.9
VA 8
260,642,562
8.6
FL 19
185,705,044
6.1
CA 18
170,147,470
5.6
PA 18
109,798,138
3.6
MI 26
102,613,408
3.4
AZ 18
98,330,000
3.3
OH 42
85,132,679
2.8
WA 16
73,616,186
2.4
IN 19
63,635,223
2.1
NC 7
57,499,210
1.9
KY 20
53,308,886
1.8
WI 14
52,072,724
1.7
SC 6
42,014,649
1.4
CO 6
36,731,892
1.2
NJ 3
36,360,000
1.2
TN 6
33,613,235
1.1
IL 16
25,291,233
0.8
NE 3
24,514,000
0.8
CT 3
24,044,248
0.8
MN 5
18,275,652
0.6
AL 3
16,512,863
0.5
MO 2
15,840,000
0.5
MD 2
10,250,000
0.3
ID 4
8,927,705
0.3
HI 1
8,393,506
0.3
MA 1
5,700,000
0.2
DE 1
4,747,682
0.2
WV 1
4,225,469
0.1
VT 5
4,013,221
0.1
NM 1
3,760,000
0.1
LA 1
3,300,000
0.1
NV 1
3,097,511
0.1
UT 1
3,000,000
0.1
RI 3
2,149,023
0.1
MT 1
2,140,000
0.1
MS 1
1,650,000
0.1
OK 1
1,112,000
0.0
NH 1
344,585
0.0
Total 420
$ 3,019,658,539
100.0
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.

Annex A-2-12



ANNEX A-3

CERTAIN CHARACTERISTICS OF LOAN GROUP 1





                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

Amortization Types
(Loan Group 1)


Amortization Types Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
Interest Only 38
$ 1,491,609,587
57.5
%
 $ 39,252,884
$ 475,000,000
55.9
%
 1.66
x
 96.9
%
 6.026
%
Amortizing Balloon(2) 94
1,043,858,837
40.3
11,104,881
250,000,000
69.1
1.60
94.7
6.216
ARD(3) 9
56,567,101
2.2
6,285,233
16,000,000
69.5
1.25
99.0
6.145
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
(1) Excludes mortgage loans secured by hospitality properties.
(2) Includes mortgage loans, representing 29.9% of the initial loan group 1 balance, that provide for payments of interest-only for a specified number of periods, followed by payments of principal and interest up to the maturity date. 58.5% of these loans, by balance, have three years or less of interest-only payments.
(3) Includes mortgage loans, representing 2.2% of the initial loan group 1 balance, that provide for payments of interest-only for a specified number of periods, followed by payments of principal and interest up to the maturity date. 12.9% of these loans, by balance, have three years or less of interest-only payments.

Annex A-3-1



Cut-Off Date Loan-to-Value Ratios
(Loan Group 1)


Range of Cut-off Date
Loan-to-Value Ratios (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
25.1 - 30.0 1
$ 3,678,144
0.1
%
 $ 3,678,144
$ 3,678,144
25.7
%
 2.05
x
 95.9
%
 6.350
%
30.1 - 35.0 1
121,500,000
4.7
121,500,000
121,500,000
31.8
2.85
97.9
5.501
40.1 - 45.0 2
750,000,000
28.9
375,000,000
475,000,000
42.9
1.78
99.6
6.104
50.1 - 55.0 3
9,065,490
0.3
3,021,830
5,293,354
53.4
1.48
91.0
6.190
55.1 - 60.0 8
41,170,981
1.6
5,146,373
7,493,767
57.8
1.42
94.7
5.995
60.1 - 65.0 10
332,193,731
12.8
33,219,373
250,000,000
63.3
2.43
93.3
6.477
65.1 - 70.0 16
395,991,031
15.3
24,749,439
116,000,000
68.4
1.30
93.4
5.967
70.1 - 75.0 42
330,861,290
12.8
7,877,650
40,000,000
72.5
1.22
95.4
6.088
75.1 - 80.0 42
530,439,645
20.5
12,629,515
96,476,000
78.8
1.22
94.1
6.116
80.1 >= 16
77,135,212
3.0
4,820,951
9,205,035
84.3
1.20
100.0
6.210
Total: 141
$ 2,592,035,525
100.00
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%

Weighted Average Cut-off Date LTV Ratios: 61.5%

(1) Excludes mortgage loans secured by hospitality properties.

Annex A-3-2



Original Term to Maturity
(Loan Group 1)


Range of Original
Terms to Maturity (Months)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Original
Term
49 - 60 18
$ 634,860,253
24.5
%
 $ 35,270,014
$ 250,000,000
69.9
%
 1.85
x
 93.4
%
 6.240
%
 60
73 - 84 1
2,588,951
0.1
2,588,951
2,588,951
63.1
1.17
82.4
6.270
84
109 - 120 121
1,913,586,321
73.8
15,814,763
475,000,000
58.6
1.57
96.9
6.050
120
169 - 180 1
41,000,000
1.6
41,000,000
41,000,000
66.1
1.20
100.0
6.597
180
Total: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
 106

Weighted Average Original Term to Maturity: 106 months.

(1) Excludes mortgage loans secured by hospitality properties.

Annex A-3-3



Remaining Term to Maturity(1)
(Loan Group 1)


Range of Remaining
Terms to Maturity (Months)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Term
49 - 60 18
$ 634,860,253
24.5
%
 $ 35,270,014
$ 250,000,000
69.9
%
 1.85
x
 93.4
%
 6.240
%
 59
73 - 84 1
2,588,951
0.1
2,588,951
2,588,951
63.1
1.17
82.4
6.270
79
109 - 120 121
1,913,586,321
73.8
15,814,763
475,000,000
58.6
1.57
96.9
6.050
119
169 - 180 1
41,000,000
1.6
41,000,000
41,000,000
66.1
1.20
100.0
6.597
180
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
 105

Weighted Average Remaining Term to Maturity: 105 months.

(1) Assumes that each ARD Loan matures on the related anticipated repayment date.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-3-4



Mortgaged Properties by Property Type(1)
(Loan Group 1)


Property Type Number of
Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate
Office 72
$ 1,499,287,867
57.8
%
 $ 20,823,443
$ 475,000,000
54.4
%
 1.65
x
 96.9
%
 6.037
%
Retail 161
652,089,767
25.2
4,050,247
40,000,000
75.1
1.22
95.3
6.065
Healthcare 82
250,000,000
9.6
3,048,780
8,231,226
63.7
2.72
93.9
6.653
Hotel 11
72,059,891
2.8
6,550,899
10,750,000
62.5
1.55
—
6.055
Mixed Use 6
55,150,000
2.1
9,191,667
14,500,000
75.0
1.27
94.4
6.041
Self Storage 12
41,718,557
1.6
3,476,546
5,700,000
67.2
1.51
92.5
6.042
Industrial/Warehouse 4
17,732,863
0.7
4,433,216
5,832,863
72.3
1.29
100.0
6.238
Multifamily 1
3,996,579
0.2
3,996,579
3,996,579
55.5
1.22
96.0
5.880
Total/Avg/Wtd Avg: 349
$ 2,592,035,525
100.0
%
 $ 7,427,036
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-3-5



Cut-Off Date Principal Balances
(Loan Group 1)


Range of Cut-off
Date Principal Balances ($)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
<= 2,000,000 11
$ 17,425,787
0.7
%
 $ 1,584,162
$ 1,950,000
67.7
%
 1.29
x
 97.6
%
 6.327
%
2,000,001. - 4,000,000. 47
146,384,495
5.6
3,114,564
4,000,000
72.2
1.32
95.9
6.152
4,000,001. - 6,000,000. 26
128,900,927
5.0
4,957,728
6,000,000
71.1
1.30
97.9
6.144
6,000,001. - 8,000,000. 12
88,742,830
3.4
7,395,236
7,878,479
75.6
1.24
95.5
6.077
8,000,001. - 10,000,000. 12
103,018,393
4.0
8,584,866
9,205,035
77.4
1.23
97.4
6.080
10,000,001. - 15,000,000. 9
116,507,367
4.5
12,945,263
14,500,000
74.6
1.28
93.5
6.094
15,000,001. - 20,000,000. 4
72,292,239
2.8
18,073,060
19,850,000
71.5
1.24
97.7
5.787
20,000,001. - 25,000,000. 5
110,287,488
4.3
22,057,498
23,500,000
75.4
1.22
93.8
6.132
25,000,001. - 50,000,000. 6
223,500,000
8.6
37,250,000
50,000,000
70.5
1.26
92.0
6.127
50,000,001. - 75,000,000. 1
65,000,000
2.5
65,000,000
65,000,000
69.1
1.40
88.6
5.762
75,000,001. - 100,000,000. 3
282,476,000
10.9
94,158,667
100,000,000
76.1
1.19
94.3
6.124
100,000,001. - 150,000,000. 2
237,500,000
9.2
118,750,000
121,500,000
49.6
2.13
94.6
5.628
150,000,001. >= 3
1,000,000,000
38.6
333,333,333
475,000,000
48.1
2.02
98.2
6.241
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
Average Cut-off Date Principal Balance:  
$ 18,383,231
 
 
 
 
 
 
 
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-3-6



U/W NCF DSCR
(Loan Group 1)


Range of U/W NCF
DSCR (x)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
<= 1.19 18
$ 291,861,471
11.3
%
 $ 16,214,526
$ 100,000,000
71.9
%
 1.15
x
 93.5
%
 6.061
%
1.20 - 1.29 76
726,369,034
28.0
9,557,487
96,476,000
76.8
1.21
95.6
6.155
1.30 - 1.39 24
253,231,282
9.8
10,551,303
116,000,000
69.9
1.35
93.9
5.924
1.40 - 1.49 7
103,694,263
4.0
14,813,466
65,000,000
68.5
1.41
89.8
5.801
1.50 - 1.59 5
66,956,080
2.6
13,391,216
50,000,000
62.7
1.56
92.2
6.016
1.60 - 1.69 3
13,350,000
0.5
4,450,000
5,700,000
62.8
1.67
83.1
5.939
1.70 - 1.79 1
475,000,000
18.3
475,000,000
475,000,000
43.2
1.74
99.5
5.923
1.80 - 1.89 3
282,495,251
10.9
94,165,084
275,000,000
43.1
1.86
99.8
6.408
1.90 - 1.99 1
3,900,000
0.2
3,900,000
3,900,000
56.3
1.94
97.1
5.900
2.00 >= 3
375,178,144
14.5
125,059,381
250,000,000
53.0
2.76
95.2
6.276
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%

Weighted Average U/W NCF DSCR: 1.63x

(1) Excludes mortgage loans secured by hospitality properties.

Annex A-3-7



Occupancy Rates(1)(2)
(Loan Group 1)


Range of Occupancy Rates (%) Number of
Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
<= 65.0 2
$ 3,390,748
0.1
%
 $ 1,695,374
$ 2,190,748
69.5
%
 2.18
x
 62.0
%
 6.461
%
65.1 - 70.0 2
4,575,539
0.2
2,287,770
2,515,539
71.0
2.04
66.0
6.440
70.1 - 75.0 1
1,853,220
0.1
1,853,220
1,853,220
63.7
2.72
71.7
6.653
75.1 - 80.0 2
11,500,000
0.4
5,750,000
7,950,000
79.1
1.21
76.6
6.143
80.1 - 85.0 16
131,065,948
5.1
8,191,622
40,000,000
72.8
1.31
83.0
6.201
85.1 - 90.0 25
220,911,791
8.5
8,836,472
65,000,000
72.4
1.51
88.2
6.091
90.1 - 95.0 35
375,687,696
14.5
10,733,934
116,000,000
70.0
1.46
92.4
6.057
95.1 >= 255
1,770,990,691
68.3
6,945,062
475,000,000
57.3
1.71
99.1
6.110
Total/Avg/Wtd Avg: 338
$ 2,519,975,634
97.2
%
 $ 7,455,549
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.107
%
Weighted average occupancy rate: 96.1
%
  
 
 
 
 
 
 
 
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-3-8



Remaining Amortization Terms
(Loan Group 1)


Range of Remaining
Amortization Terms (Months)(1)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(3)		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Amortization
Term (4)
Interest Only(2) 38
$ 1,491,609,587
57.5
%
 $ 39,252,884
$ 475,000,000
55.9
%
 1.66
x
 96.9
%
 6.026
%
 0
229 - 240 2
6,173,395
0.2
3,086,697
3,678,144
43.3
1.97
97.6
6.350
238
289 - 300 10
339,640,848
13.1
33,964,085
250,000,000
64.6
2.34
95.2
6.527
300
301 - 312 1
5,194,227
0.2
5,194,227
5,194,227
74.2
1.26
100.0
6.250
311
313 - 324 1
7,491,573
0.3
7,491,573
7,491,573
59.9
1.29
96.9
5.790
323
325 - 336 1
29,000,000
1.1
29,000,000
29,000,000
70.2
1.05
94.8
5.737
336
349 - 360 88
712,925,895
27.5
8,101,431
100,000,000
71.5
1.25
94.7
6.085
360
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
 339

Weighted Average Remaining Amortization Term: 339 months.(4)

(1) Ranges of Remaining Amortization Terms (other than Interest Only) may include mortgage loans that have an interest-only period ending prior to maturity date but exclude mortgage loans that provide for payments of interest only up to the maturity date.
(2) Interest-only up to maturity date.
(3) Excludes mortgage loans secured by hospitality properties.
(4) Includes mortgage loans that have an interest-only period ending prior to maturity date, but excludes mortgage loans that provide for payments of interest only up to maturity date.

Annex A-3-9



Mortgage Rates
(Loan Group 1)


Range of Mortgage Rates (%) Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(1)		 Wtd. Avg.
Mortgage
Rate
5.001 - 5.250 1
$ 18,442,239
0.7
%
 $ 18,442,239
$ 18,442,239
69.6
%
 1.33
x
 100.0
%
 5.200
%
5.501 - 5.750 3
161,275,000
6.2
53,758,333
121,500,000
40.9
2.43
96.6
5.546
5.751 - 6.000 31
925,035,059
35.7
29,839,841
475,000,000
56.1
1.55
96.5
5.889
6.001 - 6.250 65
744,828,177
28.7
11,458,895
100,000,000
75.9
1.21
94.9
6.137
6.251 - 6.500 39
451,455,049
17.4
11,575,770
275,000,000
54.1
1.64
97.7
6.385
6.501 - 6.750 2
291,000,000
11.2
145,500,000
250,000,000
64.0
2.51
94.8
6.645
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
61.5
%
 1.63
x
 96.1
%
 6.105
%
Weighted Average Mortgage Rate: 6.105
%
  
 
 
 
 
 
 
 
(1) Excludes mortgage loans secured by hospitality properties.

Annex A-3-10



Maturity Date Loan-to-Value Ratios(1)
(Loan Group 1)


Range of Maturity Date
Loan-to-Value Ratios (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Maturity Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate(2)		 Wtd. Avg.
Mortgage
Rate
15.1 - 20.0 1
$ 3,678,144
0.1
%
 $ 3,678,144
$ 3,678,144
17.2
%
 2.05
x
 95.9
%
 6.350
%
30.1 - 35.0 1
121,500,000
4.7
121,500,000
121,500,000
31.8
2.85
97.9
5.501
40.1 - 45.0 4
796,293,354
30.7
199,073,338
475,000,000
42.8
1.75
99.6
6.130
45.1 - 50.0 9
36,081,678
1.4
4,009,075
7,493,767
47.4
1.44
93.0
6.057
50.1 - 55.0 5
41,489,417
1.6
8,297,883
18,442,239
53.1
1.36
94.7
5.580
55.1 - 60.0 16
137,388,394
5.3
8,586,775
50,000,000
57.5
1.36
96.8
6.011
60.1 - 65.0 23
383,013,044
14.8
16,652,741
250,000,000
62.1
2.24
94.4
6.458
65.1 - 70.0 38
512,490,907
19.8
13,486,603
116,000,000
67.5
1.26
92.9
5.994
70.1 - 75.0 14
131,591,000
5.1
9,399,357
21,925,000
71.7
1.18
95.3
6.026
75.1 - 80.0 16
355,085,375
13.7
22,192,836
96,476,000
79.2
1.22
93.4
6.143
80.1 - 85.0 9
42,387,003
1.6
4,709,667
9,205,035
83.3
1.20
100.0
6.226
85.1 >= 5
31,037,209
1.2
6,207,442
8,556,920
86.0
1.20
100.0
6.199
Total/Avg/Wtd Avg: 141
$ 2,592,035,525
100.0
%
 $ 18,383,231
$ 475,000,000
58.6
%
 1.63
x
 96.1
%
 6.105
%
Weighted Average Maturity Date LTV Ratio:    58.6%
(1) Assumes that each ARD Loan matures on the related anticipated repayment date.
(2) Excludes mortgage loans secured by hospitality properties.

Annex A-3-11



Properties by State(1)
(Loan Group 1)


State Number of
Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance
NY 40
810,406,795
31.3
VA 7
246,854,000
9.5
GA 9
229,864,079
8.9
CA 18
170,147,470
6.6
FL 12
154,561,469
6.0
TX 38
145,719,128
5.6
PA 17
102,298,138
3.9
AZ 18
98,330,000
3.8
IN 19
63,635,223
2.5
NC 6
56,299,210
2.2
KY 20
53,308,886
2.1
OH 31
52,638,266
2.0
WI 14
52,072,724
2.0
WA 13
44,516,186
1.7
MI 17
44,113,408
1.7
CO 6
36,731,892
1.4
NJ 3
36,360,000
1.4
IL 16
25,291,233
1.0
CT 3
24,044,248
0.9
MN 5
18,275,652
0.7
TN 4
17,755,000
0.7
MO 2
15,840,000
0.6
SC 3
14,488,951
0.6
AL 2
11,672,863
0.5
MD 2
10,250,000
0.4
ID 4
8,927,705
0.3
HI 1
8,393,506
0.3
MA 1
5,700,000
0.2
DE 1
4,747,682
0.2
WV 1
4,225,469
0.2
VT 5
4,013,221
0.2
NM 1
3,760,000
0.1
LA 1
3,300,000
0.1
NV 1
3,097,511
0.1
UT 1
3,000,000
0.1
RI 3
2,149,023
0.1
MT 1
2,140,000
0.1
MS 1
1,650,000
0.1
OK 1
1,112,000
0.0
NH 1
344,585
0.0
Total: 349
$ 2,592,035,525
100.0
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.

Annex A-3-12



ANNEX A-4

CERTAIN CHARACTERISTICS OF LOAN GROUP 2





                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

Amortization Types
(Loan Group 2)


Amortization Types Number of
Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
Interest Only 31
$ 230,073,015
53.8
%
 $ 7,421,710
$ 25,200,000
75.8
%
 1.22x
92.4
%
 6.062
%
Amortizing Balloon(1) 12
197,550,000
46.2
16,462,500
46,550,000
75.4
1.23
88.7
6.145
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23x
90.7
%
 6.100
%
(1) Includes mortgage loans, representing 42.7% of the loan group 2 balance, that provide for payments of interest-only for a specified number of periods, followed by payments of principal and interest up to the maturity date. 23.3% of these loans, by balance, have three years or less of interest-only payments.

Annex A-4-1



Cut-Off Date Loan-to-Value Ratios
(Loan Group 2)


Range of Cut-off Date
Loan-to-Value Ratios (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
55.1 - 60.0 1
$ 7,800,000
1.8
%
 $ 7,800,000
$ 7,800,000
57.4
%
 1.20
x
 87.1
%
 6.463
%
60.1 - 65.0 1
15,900,000
3.7
15,900,000
15,900,000
62.8
1.22
94.1
5.830
65.1 - 70.0 6
23,624,809
5.5
3,937,468
6,550,000
68.4
1.25
94.4
6.075
70.1 - 75.0 10
104,855,672
24.5
10,485,567
22,550,000
72.9
1.21
85.7
6.141
75.1 - 80.0 25
275,442,534
64.4
11,017,701
46,550,000
78.5
1.23
92.2
6.092
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
Weighted Average Cut-off Date LTV Ratio:    75.6%

Annex A-4-2



Original Term to Maturity
(Loan Group 2)


Range of Original Terms
to Maturity (Months)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Original
Term
49 - 60 7
$ 98,108,235
22.9
%
 $ 14,015,462
$ 32,750,000
75.7
%
 1.21
x
 92.8
%
 6.152
%
 60
73 - 84 2
15,190,000
3.6
7,595,000
10,350,000
79.7
1.22
91.9
5.905
84
109 - 120 34
314,324,780
73.5
9,244,846
46,550,000
75.4
1.23
90.0
6.093
120
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
 105
Weighted Average Original Term to Maturity:    105 months.

Annex A-4-3



Remaining Term to Maturity
(Loan Group 2)


Range of Remaining Terms
to Maturity (Months)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Term
49 - 60 7
$ 98,108,235
22.9
%
 $ 14,015,462
$ 32,750,000
75.7
%
 1.21
x
 92.8
%
 6.152
%
 59
73 - 84 2
15,190,000
3.6
7,595,000
10,350,000
79.7
1.22
91.9
5.905
83
109 - 120 34
314,324,780
73.5
9,244,846
46,550,000
75.4
1.23
90.0
6.093
119
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
 104
Weighted Average Remaining Term to Maturity:    104 months.

Annex A-4-4



Mortgaged Properties by Property Type(1)
(Loan Group 2)


Property Type Number
of Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
Multifamily 52
$ 339,162,330
79.3
%
 $ 6,522,353
$ 32,750,000
75.7
%
 1.22
x
 93.3
%
 6.057
%
Mobile Home Park 19
88,460,685
19.6
4,655,826
11,550,000
75.2
1.25
80.8
6.265
Total/Avg/Wtd Avg: 71
$ 427,623,015
100.0
%
 $ 6,022,859
$ 32,750,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.

Annex A-4-5



Cut-Off Date Principal Balances
(Loan Group 2)


Range of Cut-off
Date Principal Balances ($)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
<= 2,000,000 1
$ 1,200,000
0.3
%
 $ 1,200,000
$ 1,200,000
71.6
%
 1.26
x
 96.9
%
 6.050
%
2,000,001 - 4,000,000 8
23,536,809
5.5
2,942,101
3,750,000
72.0
1.26
91.8
6.238
4,000,001 - 6,000,000 11
55,893,698
13.1
5,081,245
5,850,000
77.4
1.24
96.5
6.145
6,000,001 - 8,000,000 7
50,747,110
11.9
7,249,587
8,000,000
71.1
1.23
92.5
6.136
8,000,001 - 10,000,000 2
19,000,000
4.4
9,500,000
10,000,000
78.5
1.25
88.2
6.150
10,000,001 - 15,000,000 7
90,795,398
21.2
12,970,771
15,000,000
77.5
1.23
92.5
6.024
15,000,001 - 20,000,000 1
15,900,000
3.7
15,900,000
15,900,000
62.8
1.22
94.1
5.830
20,000,001 - 25,000,000 3
66,650,000
15.4
22,016,667
22,500,000
74.9
1.20
83.6
6.145
25,000,001 - 50,000,000 3
104,500,000
24.4
34,833,333
46,550,000
78.0
1.22
89.3
6.099
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
Average Cut-off Date Principal Balance:    $9,944,721

Annex A-4-6



U/W NCF DSCR
(Loan Group 2)


Range of U/W NCF
DSCR (x)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
0.00 - 1.19 3
$ 62,050,000
14.5
%
 $ 20,683,333
$ 32,750,000
73.9
%
 1.16
x
 92.5
%
 6.055
%
1.20 - 1.29 35
333,707,670
78.0
9,534,505
46,550,000
75.8
1.23
90.4
6.104
1.30 - 1.39 3
25,407,110
5.9
8,469,037
15,000,000
78.1
1.31
89.3
6.133
1.40 - 1.49 2
6,458,235
1.5
3,229,117
4,100,000
73.5
1.42
96.8
6.234
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
Weighted Average U/W NCF DSCR:    1.23x.

Annex A-4-7



Occupancy Rates(1)
(Loan Group 2)


Range of Occupancy
Rates (%)		 Number
of Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
<= 65.0 2
$ 14,248,836
3.3
%
 $ 7,124,418
$ 11,550,000
72.9
%
 1.23
x
 58.9
%
 6.442
%
70.1 - 75.0 3
14,300,000
3.3
4,766,667
6,400,000
78.6
1.26
74.1
6.215
75.1 - 80.0 2
11,000,000
2.6
5,500,000
7,250,000
72.7
1.21
77.7
6.450
80.1 - 85.0 4
13,485,170
3.2
3,371,292
5,550,000
79.5
1.27
82.3
6.151
85.1 - 90.0 7
79,950,000
18.7
11,421,429
21,300,000
74.1
1.22
88.5
6.057
90.1 - 95.0 24
209,518,876
49.0
8,729,953
32,750,000
76.0
1.22
92.9
6.074
95.1 >= 29
85,120,134
19.9
2,935,177
14,716,000
75.8
1.24
98.5
6.074
Total/Avg/Wtd Avg: 71
$ 427,623,015
100.0
%
 $ 6,022,859
$ 32,750,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
Weighted average occupancy rate:    90.7%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.

Annex A-4-8



Remaining Amortization Terms
(Loan Group 2)


Range of Remaining
Amortization Terms (Months)(1)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate		 Wtd. Avg.
Remaining
Amortization
Term(3)
Interest Only(2) 12
$ 197,550,000
46.2
%
 $ 16,462,500
$ 46,550,000
75.4
%
 1.23
x
 88.7
%
 6.145
%
 0
349 - 360 31
230,073,015
53.8
7,421,710
25,200,000
75.8
1.22
92.4
6.062
359
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
 359
Weighted Average Remaining Amortization Term:    359 months.(3)
(1) Ranges of Remaining Amortization Terms (other than Interest Only) may include mortgage loans that have an interest-only period ending prior to maturity date but exclude mortgage loans that provide for payments of interest only up to the maturity date.
(2) Interest-only up to maturity date.
(3) Includes mortgage loans that have an interest-only period ending prior to maturity date, but excludes mortgage loans that provide for payments of interest only up to maturity date.

Annex A-4-9



Mortgage Rates
(Loan Group 2)


Range of Mortgage
Rates (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Cut-off Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
5.751 - 6.000 13
$ 162,055,864
37.9
%
 $ 12,465,836
$ 25,200,000
74.5
%
 1.22
x
 92.1
%
 5.903
%
6.001 - 6.250 20
182,568,272
42.7
9,128,414
46,550,000
77.4
1.23
93.0
6.137
6.251 - 6.500 9
79,798,878
18.7
8,866,542
22,550,000
74.0
1.23
83.2
6.400
6.501 - 6.750 1
3,200,000
0.7
3,200,000
3,200,000
73.6
1.23
74.5
6.510
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
75.6
%
 1.23
x
 90.7
%
 6.100
%
Weighted Average Mortgage Rate:    6.100%

Annex A-4-10



Maturity Date Loan-to-Value Ratios
(Loan Group 2)


Range of Maturity Date
Loan-to-Value Ratios (%)		 Number
of Loans		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance		 Average
Cut-off Date
Principal
Balance		 Maximum
Cut-off Date
Principal
Balance		 Wtd. Avg.
Maturity Date
LTV		 Wtd. Avg.
U/W NCF
DSCR		 Wtd. Avg.
Occupancy
Rate		 Wtd. Avg.
Mortgage
Rate
55.1 - 60.0 2
$ 11,393,574
2.7
%
 $ 5,696,787
$ 7,800,000
58.1
%
 1.20
x
 88.1
%
 6.352
%
60.1 - 65.0 9
55,514,604
13.0
6,168,289
15,900,000
63.4
1.25
91.0
6.090
65.1 - 70.0 10
111,538,836
26.1
11,153,884
22,550,000
67.5
1.20
87.5
6.099
70.1 - 75.0 13
135,906,000
31.8
10,454,308
46,550,000
73.2
1.25
91.6
6.078
75.1 - 80.0 9
113,270,000
26.5
12,585,556
32,750,000
77.6
1.22
93.0
6.108
Total/Avg/Wtd Avg: 43
$ 427,623,015
100.0
%
 $ 9,944,721
$ 46,550,000
71.2
%
 1.23
x
 90.7
%
 6.100
%
Weighted Average Maturity Date LTV Ratio:    71.2%

Annex A-4-11



Properties by State(1)
(Loan Group 2)


State Number
of Properties		 Total
Cut-off Date
Principal
Balance		 % by Total
Cut-off Date
Principal
Balance
TX 26
$ 123,058,534
28.8
%
MI 9
58,500,000
13.7
GA 3
58,100,000
13.6
OH 11
32,494,412
7.6
FL 7
31,143,574
7.3
WA 3
29,100,000
6.8
SC 3
27,525,698
6.4
NE 3
24,514,000
5.7
TN 2
15,858,235
3.7
VA 1
13,788,562
3.2
PA 1
7,500,000
1.8
AL 1
4,840,000
1.1
NC 1
1,200,000
0.3
Total: 71
$ 427,623,015
100.0
%
(1) Calculations are based on a per property basis and, where multiple properties secure a single underlying mortgage loan, allocated loan amounts.

Annex A-4-12



ANNEX A-5

CERTAIN MONETARY TERMS OF THE UNDERLYING MORTGAGE LOANS





                    LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7



                                                                ORIGINAL       REMAINING
CONTROL  FOOTNOTE                                             INTEREST-ONLY  INTEREST-ONLY        AMORTIZATION        ANTICIPATED
  NO.       NO.                 PROPERTY NAME                 PERIOD (MOS.)  PERIOD (MOS.)            TYPE          REPAYMENT DATE
----------------------------------------------------------------------------------------------------------------------------------

   1        (1)    520 Madison Avenue                                   120            119  Interest-Only                      N/A
   2        (2)    1211 Avenue of the Americas                          120            118  Interest-Only                      N/A
   3        (3)    Extendicare Portfolio                                 36             36  Interest-Only, Balloon             N/A
   4        (4)    Reston Town Center                                   120            119  Interest-Only                      N/A
   5        (5)    Colony Square                                         60             59  Interest-Only                      N/A
   6               Republic Portfolio                                    84             83  Interest-Only, Balloon             N/A
   7               Government Property Advisors Portfolio                60             60  Interest-Only                      N/A
   8        (6)    Arizona Retail Portfolio                             120            120  Interest-Only                      N/A
   9        (7)    Midtown Plaza                                         60             59  Interest-Only                      N/A
   10       (8)    Martin Resorts                                        40             39  Interest-Only, Balloon             N/A
   11       (9)    Wolverine Portfolio                                  120            120  Interest-Only                      N/A
   12              Bucs Headquarters Office Bldg                          0              0  Balloon                            N/A
   13              The Gallery at Beach Place                            48             46  Interest-Only, Balloon             N/A
   14              695/710 Route 46                                      60             57  Interest-Only                      N/A
   15              Archstone Woodlands Apartments                        60             59  Interest-Only                      N/A
   16      (10)    Triangle Town Center Subordinate Tranche              24             13  Interest-Only, Balloon             N/A
   17              500 Collins Avenue                                   120            120  Interest-Only                      N/A
   18              Jefferson at Kessler Park                             60             59  Interest-Only, Balloon             N/A
   19              Santa Maria Plaza                                     60             60  Interest-Only, Balloon             N/A
   20      (11)    Redwood Portfolio II                                 120            118  Interest-Only                      N/A
   21              Thornblade Park Apartments                            60             58  Interest-Only                      N/A
   22              6380 Wilshire                                        120            120  Interest-Only                      N/A
   23              Weatherford Marketplace                               60             59  Interest-Only, Balloon             N/A
   24      (12)    Brunswig Square                                      120            119  Interest-Only                      N/A
   25              Statesboro Mall                                        0              0  Balloon                            N/A
   26              Jefferson at Founders Park                            60             59  Interest-Only, Balloon             N/A
   27              175 Fulton Avenue                                     24             24  Interest-Only, Balloon             N/A
   28              First and Main North                                   0              0  Balloon                            N/A
   29              Cool Creek Commons                                    36             29  Interest-Only, Balloon             N/A
   30              Sharp Rees-Stealy Medical Office Building             60             60  Interest-Only, ARD           11/1/2016
   31              Windsor Apartments                                   120            119  Interest-Only                      N/A
   32              Lexington on the Green                                60             59  Interest-Only                      N/A
   33              Grandview Apartments                                  60             60  Interest-Only, Balloon             N/A
   34              Bradford Towne Center                                 36             36  Interest-Only, Balloon             N/A
   35              Lexham Street Retail                                 120            120  Interest-Only                      N/A
   36              Sunset Place                                          36             35  Interest-Only, Balloon             N/A
   37              Beta Center                                           60             59  Interest-Only                      N/A
   38              New Hampton Commons Apartments                         0              0  Balloon                            N/A
   39              Jamesbridge Apartments                                60             59  Interest-Only, Balloon             N/A
   40              West Road Collection                                  60             58  Interest-Only, Balloon             N/A
   41              Canterbury Village Shopping Center                    60             60  Interest-Only, Balloon             N/A
   42              Cumberland Links Apartments                            0              0  Balloon                            N/A
   43              Sienna Springs Apartments                              0              0  Balloon                            N/A
   44              Dublin Mall                                            0              0  Balloon                            N/A
   45              Shoppes at Oakmonte                                   36             34  Interest-Only, Balloon             N/A
   46              Meadows Marketplace                                    0              0  Balloon                            N/A
   47              Windsor Landing Apartments                            36             35  Interest-Only, Balloon             N/A
   48              Ramsgate Apartments                                   60             59  Interest-Only                      N/A
   49              Citizens Ohio Portfolio 2                            120            117  Interest-Only                      N/A
   50      (13)    Victor Marketplace                                    24             22  Interest-Only, Balloon             N/A
   51              Indian Springs Apartments                             60             59  Interest-Only, Balloon             N/A
   52              Home Depot                                            60             59  Interest-Only, ARD           10/1/2016
   53              Mid Park Centre                                        0              0  Balloon                            N/A
   54              Citizens Michigan Portfolio 5                        120            117  Interest-Only                      N/A
   55              Cross Continents Office Building                      24             22  Interest-Only, Balloon             N/A
   56              Felton's Shopping Center                              36             35  Interest-Only, Balloon             N/A
   57              Melbourne Village                                     48             47  Interest-Only, Balloon             N/A
   58              Pacific Marina Inn                                     0              0  Balloon                            N/A
   59              Bee's Ferry Crossing                                   0              0  Balloon                            N/A
   60      (14)    Park Place LaPalma                                     0              0  Balloon                            N/A
   61              Route 6 and Stoneleigh                                36             34  Interest-Only, Balloon             N/A
   62              Majestic Oaks                                         24             20  Interest-Only, Balloon             N/A
   63              Manns Mobile Home Park Portfolio                       0              0  Balloon                            N/A
   64              Citizens Illinois Portfolio 3                        120            117  Interest-Only                      N/A
   65              Drug Store Portfolio                                 120            118  Interest-Only                      N/A
   66              Boulevard Estates                                     60             60  Interest-Only                      N/A
   67              Citizens Illinois Portfolio 1                        120            117  Interest-Only                      N/A
   68              Bank Street Court                                    120            119  Interest-Only                      N/A
   69              Iron Point Office                                      0              0  Balloon                            N/A
   70              Phoenicia Specialty Foods                              0              0  Balloon                            N/A
   71              Rampart Campus                                         0              0  Balloon                            N/A
   72              Commonwealth Center                                   36             36  Interest-Only, Balloon             N/A
   73              Woodlands Retail                                      36             36  Interest-Only, Balloon             N/A
   74              Park Place Plaza                                      48             47  Interest-Only, Balloon             N/A
   75              Lakeview I & II                                        0              0  Balloon                            N/A
   76              Citizens Northeast Portfolio                         120            117  Interest-Only                      N/A
   77              Parker Square - Bldg 600                              48             48  Interest-Only, Balloon             N/A
   78              Serene Village                                       120            119  Interest-Only                      N/A
   79              Crystal Pointe Apartments                            120            119  Interest-Only                      N/A
   80              Windsor Townhomes & Erin's @ Windsor                  60             57  Interest-Only, Balloon             N/A
   81              PrimaPharm Life Science Building                      60             59  Interest-Only, ARD           10/1/2016
   82              Preston Racquet Club                                  12              9  Interest-Only, Balloon             N/A
   83              Royal Crest Apartments                                24             22  Interest-Only, Balloon             N/A
   84              Pratt & Whitney Building                               0              0  Balloon                            N/A
   85              CVS Commerce Bank - New Carrolton                     60             59  Interest-Only, ARD           10/1/2016
   86              North Shore Self Storage                             120            119  Interest-Only                      N/A
   87              Fountains Gardens & Fountains Corner                  60             59  Interest-Only, Balloon             N/A
   88              Town West Plaza                                       48             45  Interest-Only, Balloon             N/A
   89              Waynesboro Shopping Center                             0              0  Balloon                            N/A
   90              Hamburg Shopping Center                                0              0  Balloon                            N/A
   91              Village Green Apartments                              60             59  Interest-Only, Balloon             N/A
   92      (15)    Gaffney Portfolio                                      0              0  Balloon                            N/A
   93              Dix-Toledo Shopping Center                             0              0  ARD                          10/1/2016
   94              Shenandoah Woods                                      60             58  Interest-Only, Balloon             N/A
   95              Ashley Furniture Home Store                            0              0  ARD                          10/1/2016
   96              Air Industries                                         0              0  Balloon                            N/A
   97              Patel Hotel Portfolio                                  0              0  Balloon                            N/A
   98              Fond du Lac Plaza                                     48             45  Interest-Only, Balloon             N/A
   99              Stor-More West Seattle                               120            119  Interest-Only                      N/A
  100              Northpark Plaza                                       24             20  Interest-Only, Balloon             N/A
  101              Varsity Properties                                     0              0  Balloon                            N/A
  102              Stonegate Crossing                                    36             35  Interest-Only, Balloon             N/A
  103              Citizens New York Portfolio 4                        120            117  Interest-Only                      N/A
  104              Citizens 15 Portfolio                                 60             57  Interest-Only                      N/A
  105              Village West Apartments                               36             36  Interest-Only, Balloon             N/A
  106              Citizens New York Portfolio 1                        120            117  Interest-Only                      N/A
  107              Chillicothe Plaza                                     36             35  Interest-Only, ARD           10/1/2016
  108              Maryland Food Center Warehouse                       120            118  Interest-Only                      N/A
  109              The University Medical Plaza                           0              0  Balloon                            N/A
  110              Westbrook Apartments                                  60             59  Interest-Only, Balloon             N/A
  111              Southern Oaks                                         60             58  Interest-Only, Balloon             N/A
  112              Citizens 4 Portfolio                                  60             57  Interest-Only                      N/A
  113              Rocklin Self Storage                                   0              0  Balloon                            N/A
  114              Lemon Bay                                             48             47  Interest-Only, Balloon             N/A
  115              Lakewood Apartment Portfolio                         120            119  Interest-Only                      N/A
  116              Walgreens - Henderson                                  0              0  Balloon                            N/A
  117              Citizens New York Portfolio 3                        120            117  Interest-Only                      N/A
  118              Best Western - Oak Harbor                              0              0  Balloon                            N/A
  119              Walgreens - Seguin, Texas                             60             60  Interest-Only, Balloon             N/A
  120              504 Esplanade Apartments                               0              0  Balloon                            N/A
  121              Walgreens                                              0              0  ARD                           9/1/2016
  122              Stor-More Burien                                     120            119  Interest-Only                      N/A
  123              2051 Dogwood Street                                   36             35  Interest-Only, Balloon             N/A
  124              Fulton Industrial                                     24             23  Interest-Only, Balloon             N/A
  125              Edgewater & Westcourt Apartments                      60             60  Interest-Only, Balloon             N/A
  126              Bear Valley West Self Storage                          0              0  Balloon                            N/A
  127              Winston Plaza                                          0              0  Balloon                            N/A
  128      (16)    General McMullen Self Storage                         24             23  Interest-Only, Balloon             N/A
  129              Butterfield Business Center                           60             57  Interest-Only, Balloon             N/A
  130              100 Medical Center Parkway                            36             34  Interest-Only, Balloon             N/A
  131              Plantation Storage                                    24             22  Interest-Only, Balloon             N/A
  132              Maplewood Village Mobile Home Community                0              0  Balloon                            N/A
  133              Citizens 27 Portfolio                                 60             57  Interest-Only                      N/A
  134              Cool Springs Collection                               24             23  Interest-Only, Balloon             N/A
  135              Hidden Pines                                          60             58  Interest-Only, Balloon             N/A
  136              American Mini Storage                                120            119  Interest-Only                      N/A
  137              Rite Aid Zanesville                                    0              0  Balloon                            N/A
  138              Citizens 22 Portfolio                                 60             57  Interest-Only                      N/A
  139              Citizens New York Portfolio 2                        120            117  Interest-Only                      N/A
  140              Walgreens - Floyds Knob                              120            120  Interest-Only                      N/A
  141              Pecanland Village SC                                  24             24  Interest-Only, Balloon             N/A
  142              Walgreens - Reedsburg                                120            120  Interest-Only                      N/A
  143              Parkview Apartments                                   12              9  Interest-Only, Balloon             N/A
  144              Citizens 21 Portfolio                                 60             57  Interest-Only                      N/A
  145              North Meadows                                         24             24  Interest-Only, Balloon             N/A
  146              Kuykendahl Medical Office                              0              0  Balloon                            N/A
  147              Sunrise II Mini Storage                                0              0  Balloon                            N/A
  148              Layton Hills Business Park                            36             35  Interest-Only, Balloon             N/A
  149              Hamilton Mills                                         0              0  Balloon                            N/A
  150              Wortham Village Shopping Center                        0              0  Balloon                            N/A
  151              Shelley Station                                       48             47  Interest-Only, Balloon             N/A
  152              Citizens 13 Portfolio                                 60             57  Interest-Only                      N/A
  153              Storage Plus                                          48             47  Interest-Only, Balloon             N/A
  154              Lincoln Meadows Retail Center                         24             17  Interest-Only, Balloon             N/A
  155              Storage Zone                                           0              0  Balloon                            N/A
  156              Park Meadows Village and Mrs. Winners                  0              0  Balloon                            N/A
  157              Comfort Inn - Metro Airport                            0              0  Balloon                            N/A
  158              Linens 'N Things of College Station                   60             59  Interest-Only, Balloon             N/A
  159              Citizens 14 Portfolio                                 60             57  Interest-Only                      N/A
  160              Hampton Square Shopping Center                         0              0  Balloon                            N/A
  161              20 North Central Avenue                                0              0  Balloon                            N/A
  162              Unity Pointe                                          60             58  Interest-Only, Balloon             N/A
  163              Blalock Office Park                                    0              0  Balloon                            N/A
  164              Ashley Square                                         60             58  Interest-Only, Balloon             N/A
  165              White Pines Plaza                                      0              0  Balloon                            N/A
  166              Saddle Vineyards Apartments                            0              0  Balloon                            N/A
  167              Inglewood Village                                     60             58  Interest-Only, Balloon             N/A
  168              Crossroads Shopping Center                            48             47  Interest-Only, Balloon             N/A
  169              John's Creek                                           0              0  Balloon                            N/A
  170              Citizens 28 Portfolio                                 60             57  Interest-Only                      N/A
  171      (17)    Lambertson Lakes Shopping Center Phase II              0              0  Balloon                            N/A
  172              Autumn Springs                                        24             24  Interest-Only, Balloon             N/A
  173              Silver Lake Plaza                                     60             58  Interest-Only, Balloon             N/A
  174              Diamond Head Inn                                       0              0  Balloon                            N/A
  175              Stonecrest Village                                     0              0  Balloon                            N/A
  176              Blackstone Building                                    0              0  Balloon                            N/A
  177              Lewisville Retail Strip Center                        48             46  Interest-Only, Balloon             N/A
  178              AMC Theatre Outlot Retail Center                       0              0  Balloon                            N/A
  179              Fidelity Retail                                       30             29  Interest-Only, Balloon             N/A
  180              310 Professional Building                              0              0  Balloon                            N/A
  181              Hampton Bays Medical                                   0              0  Balloon                            N/A
  182              Cleveland Ridge Apartments                            24             23  Interest-Only, Balloon             N/A
  183              Family Dollar - 1425 East 71st Street                  0              0  Balloon                            N/A
  184              GetGo Station Monroeville                             24             23  Interest-Only, ARD           10/1/2016


                                              ORIGINAL     REMAINING          REMAINING        U/W       CUT-OFF
CONTROL    MATURITY  MORTGAGE  AMORTIZATION  SEASONING      TERM TO      LOCKOUT/DEFEASANCE    NCF         DATE
  NO.        DATE     RATE(%)   TERM (MOS.)    (MOS.)   MATURITY (MOS.)     PERIOD (MOS.)    DSCR (X)  NCF DSCR (X)
-------------------------------------------------------------------------------------------------------------------

   1     10/11/2016  5.922989             0          1              119                 116      1.74          1.74
   2      9/11/2016  6.417870             0          2              118                 115      1.86          1.86
   3     11/11/2011  6.652500           300          0               60                   0      2.72          3.31
   4     10/11/2016  5.500500             0          1              119                 113      2.85          2.85
   5     10/11/2011  5.762000             0          1               59                  47      1.37          1.37
   6      10/1/2016  6.090000           360          1              119                 115      1.17          1.38
   7     11/11/2011  6.110000             0          0               60                  59      1.20          1.20
   8     11/11/2016  6.180000             0          0              120                 118      1.20          1.20
   9     10/11/2011  5.762000             0          1               59                  47      1.40          1.40
   10    10/11/2016  5.956000           360          1              119                 116      1.57          1.86
   11    11/11/2016  6.130000             0          0              120                 117      1.27          1.27
   12    11/11/2021  6.597000           300          0              180                  25      1.20          1.20
   13     9/11/2016  6.210000           360          2              118                 115      1.14          1.34
   14     8/11/2011  6.190000             0          3               57                  25      1.22          1.22
   15    10/11/2011  6.200000             0          1               59                   0      1.15          1.15
   16     12/5/2015  5.737000           336         11              109                 106      1.05          1.32
   17    11/11/2016  5.950000             0          0              120                  25      1.22          1.22
   18    10/11/2016  5.910000           360          1              119                 117      1.21          1.44
   19    11/11/2016  6.100000           360          0              120                 118      1.15          1.35
   20     9/11/2016  6.450000             0          2              118                 115      1.21          1.21
   21     9/11/2011  6.060000             0          2               58                  57      1.21          1.21
   22    11/11/2016  6.380000             0          0              120                 117      1.20          1.20
   23     10/1/2016  5.890000           360          1              119                 115      1.20          1.43
   24    10/11/2016  6.100000             0          1              119                 116      1.20          1.20
   25     9/11/2016  6.190000           360          2              118                 115      1.35          1.35
   26    10/11/2016  5.910000           360          1              119                 117      1.18          1.40
   27     11/1/2011  5.940000           360          0               60                  57      1.16          1.38
   28      9/1/2016  5.200000           300          2              118                 115      1.33          1.33
   29     4/11/2016  5.880000           360          7              113                 110      1.21          1.44
   30     11/1/2036  6.170000           360          0              120                   0      1.28          1.50
   31    10/11/2016  5.830000             0          1              119                 119      1.22          1.22
   32    10/11/2011  5.970000             0          1               59                  58      1.32          1.32
   33    11/11/2016  6.050000           360          0              120                  25      1.20          1.42
   34    11/11/2016  6.410000           360          0              120                 117      1.25          1.45
   35    11/11/2016  5.790000             0          0              120                 117      1.41          1.41
   36     10/1/2016  6.320000           360          1              119                   0      1.21          1.40
   37    10/11/2011  6.360000             0          1               59                  59      1.38          1.38
   38    10/11/2016  6.000000           360          1              119                 119      1.23          1.23
   39    10/11/2016  5.980000           360          1              119                  23      1.22          1.45
   40      9/1/2016  6.020000           360          2              118                 114      1.13          1.33
   41    11/11/2016  6.010000           360          0              120                 120      1.17          1.38
   42      9/1/2016  5.850000           360          2              118                 112      1.20          1.20
   43     7/11/2016  6.410000           360          4              116                 113      1.20          1.20
   44     9/11/2016  6.190000           360          2              118                 115      1.32          1.32
   45      9/1/2016  6.080000           360          2              118                   0      1.20          1.42
   46     11/1/2016  5.550000           360          0              120                 116      1.43          1.43
   47    10/11/2013  5.930000           360          1               83                  79      1.22          1.44
   48    10/11/2011  6.420000             0          1               59                  58      1.28          1.28
   49     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
   50     9/11/2016  6.200000           360          2              118                  46      1.16          1.35
   51    10/11/2016  5.850000           360          1              119                 118      1.22          1.46
   52     10/1/2036  6.040000           360          1              119                 116      1.15          1.36
   53     11/1/2016  5.900000           360          0              120                   0      1.28          1.28
   54     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
   55     9/11/2011  6.210000           360          2               58                  57      1.20          1.40
   56    10/11/2016  5.880000           360          1              119                 119      1.23          1.47
   57    10/11/2016  5.902000           360          1              119                 113      1.23          1.46
   58    10/11/2016  6.260000           360          1              119                 119      1.50          1.50
   59    11/11/2016  5.880000           360          0              120                 120      1.20          1.20
   60      8/1/2016  6.180000           360          3              117                 114      1.20          1.20
   61     9/11/2016  6.120000           360          2              118                 115      1.20          1.41
   62     7/11/2011  5.851000           360          4               56                  56      1.15          1.38
   63     6/11/2016  6.410000           360          5              115                 112      1.30          1.30
   64     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
   65     9/11/2016  6.120000             0          2              118                 118      1.32          1.32
   66    11/11/2011  6.463000             0          0               60                   0      1.20          1.20
   67     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
   68    10/11/2016  6.200000             0          1              119                 116      1.22          1.22
   69     10/1/2016  6.290000           360          1              119                  60      1.25          1.25
   70     10/1/2016  5.990000           360          1              119                 116      1.37          1.37
   71     10/1/2016  5.790000           324          1              119                  36      1.29          1.29
   72    11/11/2016  6.180000           360          0              120                 119      1.15          1.34
   73    11/11/2016  5.980000           360          0              120                 117      1.33          1.58
   74    10/11/2016  5.902000           360          1              119                 113      1.27          1.51
   75    11/11/2016  6.120000           360          0              120                 120      1.22          1.22
   76     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
   77    11/11/2016  5.960000           360          0              120                 120      1.09          1.29
   78    10/11/2016  5.830000             0          1              119                 119      1.22          1.22
   79    10/11/2016  5.830000             0          1              119                 119      1.27          1.27
   80     8/11/2016  6.310000           360          3              117                 114      1.25          1.46
   81     10/1/2036  6.300000           360          1              119                   0      1.30          1.51
   82      8/1/2016  6.260000           360          3              117                 114      1.20          1.39
   83     9/11/2016  6.180000           360          2              118                 118      1.25          1.46
   84    10/11/2016  6.220000           300          1              119                 118      1.30          1.30
   85     10/1/2036  6.020000           360          1              119                 116      1.18          1.39
   86     10/1/2016  5.850000             0          1              119                 113      1.67          1.67
   87    10/11/2016  6.290000           360          1              119                 118      1.20          1.40
   88     8/11/2016  6.100000           360          3              117                 111      1.20          1.41
   89     10/1/2016  6.280000           360          1              119                 116      1.29          1.29
   90     10/1/2016  6.100000           360          1              119                 115      1.21          1.21
   91    10/11/2016  6.050000           360          1              119                  25      1.20          1.42
   92     10/1/2016  6.100000           360          1              119                 116      1.27          1.27
   93     10/1/2031  6.090000           300          1              119                 116      1.48          1.48
   94     9/11/2016  6.230000           360          2              118                 118      1.27          1.48
   95     10/1/2032  6.250000           312          1              119                 116      1.26          1.26
   96     11/1/2016  6.030000           360          0              120                 117      1.27          1.27
   97     7/11/2016  6.340000           300          4              116                 116      1.33          1.33
   98     8/11/2016  6.100000           360          3              117                 111      1.20          1.41
   99     10/1/2016  5.900000             0          1              119                 116      1.82          1.82
  100     7/11/2016  6.210000           360          4              116                 112      1.21          1.41
  101    11/11/2016  6.150000           360          0              120                 117      1.20          1.20
  102    10/11/2016  6.100000           360          1              119                 115      1.23          1.45
  103     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
  104     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  105    11/11/2013  5.850000           360          0               84                  83      1.21          1.45
  106     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
  107     10/1/2036  6.110000           360          1              119                 116      1.20          1.41
  108      9/1/2016  6.260000             0          2              118                 115      1.39          1.39
  109      9/1/2016  6.250000           360          2              118                 115      1.30          1.30
  110    10/11/2016  6.060000           360          1              119                  25      1.20          1.41
  111     9/11/2016  6.230000           360          2              118                 118      1.29          1.51
  112     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  113      8/1/2016  6.100000           360          3              117                 114      1.55          1.55
  114    10/11/2016  5.902000           360          1              119                 113      1.27          1.51
  115    10/11/2016  6.150000             0          1              119                 118      1.42          1.42
  116    10/11/2016  6.070000           360          1              119                 119      1.21          1.21
  117     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
  118    11/11/2016  6.120000           300          0              120                 117      1.69          1.69
  119    11/11/2016  6.140000           360          0              120                 119      1.18          1.39
  120     10/1/2016  5.880000           360          1              119                 116      1.22          1.22
  121      9/1/2031  6.150000           300          2              118                 115      1.15          1.15
  122     10/1/2016  5.900000             0          1              119                 116      1.94          1.94
  123    10/11/2016  6.110000           360          1              119                  47      1.20          1.41
  124    10/11/2016  6.200000           360          1              119                 116      1.22          1.43
  125    11/11/2016  6.060000           360          0              120                 119      1.26          1.48
  126    10/11/2016  6.040000           360          1              119                 119      1.24          1.24
  127     8/11/2016  6.350000           240          3              117                 116      2.05          2.05
  128    10/11/2016  5.880000           360          1              119                 119      1.63          1.95
  129     8/11/2016  6.280000           360          3              117                  21      1.21          1.41
  130     9/11/2016  6.190000           360          2              118                 118      1.21          1.42
  131     9/11/2016  6.290000           360          2              118                 118      1.24          1.45
  132      9/1/2016  6.110000           360          2              118                   0      1.21          1.21
  133     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  134     10/1/2016  6.060000           360          1              119                   0      1.23          1.45
  135     9/11/2016  6.230000           360          2              118                 118      1.21          1.42
  136    10/11/2016  6.320000             0          1              119                  25      1.20          1.20
  137    11/11/2016  6.150000           300          0              120                 117      1.21          1.21
  138     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  139     8/11/2016  6.191000             0          3              117                   0      1.20          1.20
  140    11/11/2016  5.980000             0          0              120                 117      1.26          1.26
  141    11/11/2016  6.050000           360          0              120                 119      1.26          1.48
  142    11/11/2016  6.000000             0          0              120                 117      1.28          1.28
  143      8/1/2016  6.510000           360          3              117                 114      1.23          1.41
  144     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  145    11/11/2016  5.980000           360          0              120                 117      1.33          1.57
  146     10/1/2016  6.280000           360          1              119                 116      1.42          1.42
  147    10/11/2016  6.120000           360          1              119                 118      1.33          1.33
  148    10/11/2016  6.010000           360          1              119                  35      1.28          1.52
  149    11/11/2016  6.080000           360          0              120                 119      1.20          1.20
  150      9/1/2016  6.240000           360          2              118                 115      1.30          1.30
  151    10/11/2016  5.902000           360          1              119                 113      1.23          1.47
  152     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  153    10/11/2016  6.310000           360          1              119                  25      1.31          1.52
  154     4/11/2016  6.080000           360          7              113                 113      1.24          1.46
  155     9/11/2016  6.000000           360          2              118                 115      1.32          1.32
  156    11/11/2016  6.430000           360          0              120                 120      1.27          1.27
  157     9/11/2016  6.440000           300          2              118                 118      1.42          1.42
  158    10/11/2016  6.390000           360          1              119                 119      1.29          1.49
  159     8/11/2011  6.300000             0          3               57                   0      1.20          1.20
  160     6/11/2013  6.270000           360          5               79                  79      1.17          1.17
  161    10/11/2016  6.350000           240          1              119                 116      1.84          1.84
  162     9/11/2016  6.230000           360          2              118                 118      1.32          1.55
  163    11/11/2016  6.030000           360          0              120                  24      1.52          1.52
  164     9/11/2016  6.230000           360          2              118                 118      1.29          1.50
  165     4/11/2016  6.100000           360          7              113                 112      1.40          1.40
  166    10/11/2011  6.380000           360          1               59                  56      1.42          1.42
  167     9/11/2016  6.230000           360          2              118                 118      1.22          1.42
  168    10/11/2016  5.902000           360          1              119                 113      1.22          1.45
  169     8/11/2016  6.410000           360          3              117                 116      1.20          1.20
  170     8/11/2011  6.300000             0          3               57                   0      1.23          1.23
  171    10/11/2016  5.800000           360          1              119                 118      1.34          1.34
  172    11/11/2016  6.150000           360          0              120                 119      1.21          1.42
  173     9/11/2016  6.410000           360          2              118                  46      1.18          1.36
  174    10/11/2016  6.310000           360          1              119                 116      1.57          1.57
  175     9/11/2016  6.310000           360          2              118                 117      1.20          1.20
  176    10/11/2011  6.350000           360          1               59                  59      1.38          1.38
  177     9/11/2016  6.230000           360          2              118                 118      1.20          1.40
  178      7/1/2016  6.420000           360          4              116                 113      1.30          1.30
  179    10/11/2016  6.230000           360          1              119                 119      1.18          1.38
  180    10/11/2011  6.350000           360          1               59                  59      1.36          1.36
  181    11/11/2016  6.350000           360          0              120                 119      1.37          1.37
  182    10/11/2016  6.050000           360          1              119                 119      1.26          1.49
  183    11/11/2016  6.240000           360          0              120                 117      1.15          1.15
  184     10/1/2036  6.400000           360          1              119                 116      1.30          1.50


         CUT-OFF   SCHEDULED
CONTROL   DATE     MATURITY/
  NO.    LTV (%)  ARD LTV (%)
-----------------------------

   1        43.2         43.2
   2        42.5         42.5
   3        63.7         61.7
   4        31.8         31.8
   5        68.2         68.2
   6        69.0         66.6
   7        80.0         80.0
   8        79.9         79.9
   9        69.1         69.1
   10       61.2         55.6
   11       80.0         74.9
   12       66.1         40.9
   13       72.7         67.1
   14       79.5         79.5
   15       76.0         76.0
   16       70.2         59.9
   17       79.2         79.2
   18       77.1         72.0
   19       71.0         66.5
   20       72.7         68.5
   21       79.9         79.9
   22       77.1         77.1
   23       75.6         70.6
   24       79.9         79.9
   25       74.0         63.3
   26       72.0         67.2
   27       73.3         70.5
   28       69.6         52.6
   29       71.1         64.1
   30       72.1         67.6
   31       62.8         62.8
   32       80.0         80.0
   33       77.0         72.1
   34       72.9         66.4
   35       75.1         75.1
   36       80.0         72.7
   37       77.8         77.8
   38       74.9         63.6
   39       73.0         68.3
   40       78.7         73.6
   41       76.3         71.4
   42       79.9         67.6
   43       78.5         67.6
   44       72.8         62.2
   45       69.4         62.8
   46       65.0         54.4
   47       79.6         75.6
   48       80.0         80.0
   49       84.3         84.3
   50       75.6         67.3
   51       76.9         71.8
   52       71.8         67.2
   53       74.8         63.2
   54       85.8         85.8
   55       80.0         77.2
   56       80.0         72.1
   57       71.2         65.4
   58       72.0         61.6
   59       77.2         65.2
   60       76.9         65.7
   61       79.0         71.5
   62       70.2         67.5
   63       73.9         63.7
   64       85.2         85.2
   65       79.3         79.3
   66       57.4         57.4
   67       85.4         85.4
   68       73.0         73.0
   69       67.5         57.8
   70       55.6         47.2
   71       59.9         48.2
   72       78.1         70.8
   73       74.9         67.7
   74       78.3         71.9
   75       79.6         67.7
   76       84.9         84.9
   77       79.1         72.7
   78       76.7         76.7
   79       68.4         68.4
   80       80.0         75.2
   81       59.1         55.5
   82       74.5         65.1
   83       79.6         70.8
   84       76.7         60.0
   85       73.7         69.0
   86       62.6         62.6
   87       79.0         74.2
   88       72.4         66.7
   89       66.8         57.2
   90       73.3         61.6
   91       69.9         65.5
   92       76.1         64.8
   93       54.6         42.5
   94       80.0         75.1
   95       74.2         59.3
   96       75.0         63.7
   97       65.9         51.9
   98       71.9         66.2
   99       61.4         61.4
  100       71.9         64.1
  101       76.6         65.2
  102       79.8         72.3
  103       84.6         84.6
  104       80.9         80.9
  105       80.0         75.9
  106       85.2         85.2
  107       74.6         67.6
  108       68.2         68.2
  109       69.7         59.6
  110       79.5         74.4
  111       79.3         74.4
  112       80.0         80.0
  113       57.4         48.9
  114       58.6         53.8
  115       78.1         70.8
  116       70.0         59.6
  117       84.5         84.5
  118       59.0         45.9
  119       72.5         67.9
  120       55.5         47.0
  121       72.9         56.9
  122       56.3         56.3
  123       73.6         66.6
  124       73.5         65.5
  125       75.8         70.9
  126       79.9         67.9
  127       25.7         17.2
  128       67.1         59.3
  129       68.9         64.7
  130       76.4         69.3
  131       68.6         61.2
  132       69.8         59.5
  133       80.4         80.4
  134       77.2         68.5
  135       67.0         62.8
  136       79.1         79.1
  137       74.3         57.9
  138       79.7         79.7
  139       84.8         84.8
  140       79.5         79.5
  141       76.3         67.7
  142       76.5         76.5
  143       73.6         64.7
  144       77.9         77.9
  145       79.0         70.0
  146       61.5         52.6
  147       71.2         60.7
  148       72.1         65.2
  149       78.3         66.6
  150       70.6         60.4
  151       75.7         69.5
  152       80.7         80.7
  153       75.0         69.4
  154       81.8         72.6
  155       71.4         60.7
  156       71.2         61.2
  157       62.9         49.6
  158       71.5         67.2
  159       80.5         80.5
  160       63.1         57.6
  161       69.3         46.1
  162       79.7         74.8
  163       79.0         67.0
  164       77.1         72.3
  165       73.4         62.8
  166       65.5         61.6
  167       67.6         63.5
  168       74.8         68.7
  169       77.6         66.7
  170       93.2         93.2
  171       74.3         62.7
  172       74.6         66.4
  173       76.2         71.6
  174       52.7         45.1
  175       70.8         60.7
  176       50.7         47.6
  177       70.5         65.1
  178       72.1         62.1
  179       78.6         70.7
  180       60.8         57.1
  181       73.5         63.0
  182       71.6         63.6
  183       80.2         68.5
  184       64.4         57.6






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Annex A-5 Footnotes

(1)    520 Madison Avenue U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the 520 Madison Avenue Mortgaged Property are projected to be $62,268,782 and $59,666,856 respectively, based on assumed mark-to-market rent adjustment applied to below-market tenant leases, projected increase of building square footage by approximately 53,174 square feet upon building remeasurement and certain other assumptions.
U/W NCF DSCR is calculated based on in-place U/W NCF. Based on the projected U/W NCF of $59,666,856 (described above) the U/W NCF DSCR should be 2.09x.
Jefferies & Company Inc.'s lease expiration includes 111,945 square feet expiring May 20, 2021, 95,833 square feet expiring October 20, 2014 and 68,858 square feet expiring September 20, 2014.
Mitsubishi International Corporation's lease expiration includes 66,431 square feet expiring April 20, 2007 and 22,871 square feet expiring May 20, 2007.
Freshfields Bruckhaus Deringer LLP's lease expiration includes 22,400 square feet expiring October 20, 2008 and 22,400 square feet expiring July 20, 2015.
(2)    1211 Avenue of the Americas The Original Balance, Cut-Off Date Balance, and Monthly Debt Service reflect the 1211 Avenue of the Americas Mortgage Loan, which is part of the 1211 Avenue of the Americas Loan Combination of $675,000,000. The amount of $675,000,000 comprises the two pari passu A Notes.
The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire 1211 Avenue of the Americas Loan Combination.
Comprised of three mezzanine loans in the amounts of $104,000,000, $25,000,000 and $146,000,000, respectively. In addition, there is a $25,000,000 unfunded portion of a junior mezzanine facility that is available to be drawn upon. Following the funding and repayment or termination of the $25,000,000 junior mezzanine facility, additional mezzanine financing is permitted up to $95,000,000 subject to DSCR and LTV tests.
U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the 1211 Avenue of the Americas Mortgaged Property are projected to be $91,495,205 and $89,396,417 respectively, based on assumed mark-to-market rent adjustment applied to below-market tenant leases and certain other assumptions.
U/W NCF DSCR is calculated based on in-place U/W NCF and a loan amount comprised of the entire 1211 Avenue of the Americas Loan Combination. The U/W DSCR based on


Annex A-5 Footnotes  — continued

the projected U/W NCF of $89,396,417 (described above) is 2.04x.
Commencing 1/1/2007 Ropes & Gray has an option to lease approximately 88,288 square feet of the JP Morgan space.
A portion of the JP Morgan space totalling 88,288 square feet has a lease expiration date of 12/31/2007. JP Morgan may surrender this space to the landlord beginning 1/1/2007, subject to Ropes & Gray leasing this space from the landlord.
(3)    Extendicare Portfolio The Original Balance, Cut-Off Date Balance, and Monthly Debt Service reflect the Extendicare Portfolio Mortgage Loan, which is part of the Extendicare Portfolio Loan Combination of $500,000,000. The amount of $500,000,000 comprises the two pari passu A Notes.
The Cut-Off Date LTV Ratio and the Maturity Date LTV Ratio are based on the entire Extendicare Portfolio Loan Combination.
The appraisal as of date for the Extendicare Portfolio Mortgaged Property known as Parkview Nursing Center is as of September 1, 2006. The appraised values and appraisal as of dates for three of the Extendicare Portfolio Mortgaged Properties are based on stabilized values and stabilized as of dates of January 1, 2007 for River's Bend Health & Rehab and as of March 1, 2007 for each of Willowcrest Care Center and Heritage Nursing & Rehab Center.
Based on U/W NCF and calculated based on the annualized constant monthly debt service payment commencing with the payment date in December 2009 and on a loan amount comprised of the entire Extendicare Portfolio Loan Combination.
U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Extendicare Mortgaged Property are projected to be $113,817,477 and $111,783,127 respectively.
The U/W DSCR and the U/W IO DSCR based on the projected U/W NCF of $111,783,127 are 2.72x and 3.31x, respectively.
(4)    Reston Town Center The Cut-off Date LTV Ratio and the Maturity LTV Ratio are based solely on the Reston Town Center Mortgage Loan and do not take into account the Reston Town Center Subordinate Non-Trust Loan. The Cut-off Date LTV Ratio and the Maturity LTV Ratio of the entire Reston Town Center Loan Combination are both 55.3%.
Weighted average occupancy based on overall office occupancy of 98.2% and retail occupancy of 97.1% as of October 9, 2006, as weighted based on square footage.


Annex A-5 Footnotes  — continued

U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Reston Town Center Mortgaged Property are projected to be $22,940,322 and $21,520,169 respectively.
Reflects in-place U/W NCF. Projected U/W NCF based on assumed mark-to market rent adjustments applied to below market tenant leases and certain other lease-up assumptions is $21,520,169.
(5)    Colony Square U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Colony Square Mortgaged Property are projected to be $11,312,596 and $9,809,136 respectively.
Reflects in-place U/W NCF. Projected U/W NCF based on assumed lease-up of vacant space at 95% occupancy at the current weighted average rent at the Colony Square Mortgaged Property is $9,809,136.
Reflects the portion of a $35,000,000 unfunded mezzanine facility allocated to the Colony Square Mortgaged Property .
Based on U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $9,809,136 (described above) is 1.45x.
WebMD, Inc.'s lease provides for a termination option effective 8/31/08 provided the tenant gives notice no later than 11/30/2007 and simultaneously, with the termination notice, pays a fee equal to five months of the then current rent.
(6)    Arizona Retail Portfolio Occupancy Percentage , U/W Net Cash Flow and U/W NCF DSCR were calculated including 28,875 square feet of recently executed leases with tenants which have not yet taken occupancy. The sponsors have executed a guaranty in the amount of $4,680,456 which represents the approximate proceeds allocable to the cash flow differential between the current in-place cash flow and the projected cash flow including the recently executed leases. The guaranty amount decreases as tenants take occupancy and commenced paying full unabated rent. The in-place weighted average occupancy is 84.3%. Based on the current in-place net cash flow, the DSCR is 1.13x.
(7)    Midtown Plaza U/W Net Operating Income and U/W Net Cash Flow reflect in-place U/W Net Operating Income and U/W Net Cash Flow. The U/W Net Operating Income and U/W Net Cash Flow of the Midtown Plaza Mortgaged Property are projected to be $6,597,436 and $5,670,267 respectively.


Annex A-5 Footnotes  — continued

In addition, the collateral includes a 0.69 acre development parcel that can be developed into approximately 300,000 square feet of office or residential space.
Based on in place U/W NCF and calculated based on the annual interest only payments. The U/W DSCR based on the projected U/W NCF of $5,670,267 (described above) is 1.49x.
The appraised value includes $4,340,000 for a 0.69 acre development parcel adjacent to the building.
Aggregate appraised value for the Midtown Plaza office buildings and the development par cel. The office buildings were appraised at a value of $89,750,000 and the development parcel was appraised at a value of $4,340,000.
(8)    Martin Resorts After the sixth month of the loan term and until one year prior to maturity, the related borrower has the option of releasing one asset from the collateral upon the payment of 125% of the allocated loan amounts plus yield maintenance.
U/W Net Cash Flow and U/W NCF DSCR reflects underwritten net cash flow of the Martin Resorts Mortgaged Properties and is based on occupancy percentages for the trailing 12 months ending July 30, 2006 and ADR values for the trailing 12 months ending June 30, 2006. Except, however, in the case of the Avila Lighthouse Suites mortgaged property, the U/W Net Cash Flow is based on the appraiser's analysis of market occupancy, which is higher than the occupancy for the trailing 12 months ending July 31, 2006, and ADR based on the competitive set as determined by the appraiser, as the Avila Lighthouse Suites property opened for business in December 2005; or, with respect to the Shore Cliff Lodge mortgaged property, occupancy is based on an underwritten occupancy of 84.0%, which is below the occupancy based on the trailing 12 months ending July 31, 2006.
(9)    Wolverine Portfolio The borrower is required to make additional monthly amortization payments, to the extent available from excess cash flow, beginning with the December 2011 payment date and continuing until maturity, in the approximate amount of $48,719.31, which payments will accrue if not made. The failure to make such additional monthly amortization payments will not be an event of default if excess cash flow is not sufficient to make such additional monthly amortization payments. It is assumed in the calculations of Monthly P&I, Annual Debt Service, Balloon Balance, and Balloon LTV that such additional monthly amortization payments will be made, with Monthly P&I and Annual Debt Service being calculated based on the average of the monthly payments due from the payment date in December 2011 through the maturity date. UW Net Cash Flow DSCR is calculated based on interest only payments.


Annex A-5 Footnotes  — continued

(10)    Triangle Town Center —                 Subordinate Tranche Original Balance and Cut-off Date Balance reflect the Triangle Town Center – Subordinate Tranche Mortgage Loan. The Triangle Town Center Non-Trust Loans total $171,000,000. The Triangle Town Center Mortgage Loan Combination totals $200,000,000.
Maturity Date Balance reflects the balance at maturity of the Triangle Town Center – Subordinate Tranche Mortgage Loan. At maturity, the Triangle Town Center Loan Combination is expected to have an outstanding principal balance of $170,713,179.
Original LTV, Cut-Off Date LTV, Maturity Date LTV and U/W NCF DSCR are based on the Triangle Town Center Loan Combination.
Occupancy Percentage, U/W Net Cash Flow and U/W NCF DSCR were calculated including 1,672 square feet of potential leases. The property is a 1,440,865 square-foot regional mall of which 637,516 square feet (including 12,007 square feet of ground lease space, of which only the land is part of the collateral) is collateral. The overall projected underwritten occupancy is 94.8%, with in-line projected occupancy at 84.2%. As of the rent roll dated November 10, 2005, the mortgaged real property was 94.7% leased and 93.7% occupied, with 83.8% of the in-line space leased and 81.1% of the in-line tenants in occupancy. The CBL & Associates Limited Partnership guarantees the amount of $3,948,480, representing proceeds allocable to the differential between the in-place rent at the closing of the mortgage loan and the projected rent. The $3,948,480 guaranty may be releases and/or reduced upon the execution of certain unexecuted leases or replacement tenants for such leases.
The scheduled debt service is based on the Triangle Town Center - Subordinate Tranche Mortgage Loan. The scheduled annual debt service for the Triangle Town Center Loan Combination is approximately $14,367,389.64.
(11)    Redwood Portfolio II The borrower is required to make additional monthly amortization payments, to the extent available from excess cash flow, beginning with the October 2011 payment date and continuing until maturity, in the approximate amount of $22,144.02, which payments will accrue if not made. The failure to make such additional monthly amortization payments will not be an event of default if excess cash flow is not sufficient to make such additional monthly amortization payments. It is assumed in the calculations of Monthly P&I, Annual Debt Service, Balloon Balance, and Balloon LTV that such additional monthly amortization payments will be made, with Monthly P&I and Annual Debt Service being calculated based on the average of the monthly payments due from the payment date in October 2011 through the maturity date. UW NCF DSCR is calculated based on interest only payments.


Annex A-5 Footnotes  — continued

(12)    Brunswig Square Occupancy Percentage, U/W Net Cash Flow and U/W NCF DSCR were calculated including rent from the 10,298 square foot space leased to General Services Administration, which tenant is currently not in occupancy. The tenant has the right to terminate its lease in March 2007 with six months notice. The current lease term expires in March 2012.
(13)    Victor Marketplace Property is 100% leased, but 80.9% occupied. United Properties Investment LLC, a borrower affliate, signed a master dated September 11, 2006 for the remaining 19.1% vacant space at the property at $15.38 per square foot. The master leased space adjusts downward as vacant space is leased and tenants take occupancy.
(14)    Park Place LaPalma The underwritten NCF DSCR and cut-off Date LTV of the MezzCap Loan Combination are 1.08 and 81.9% respectively.
(15)    Gaffney Portfolio The underwritten NCF DSCR and cut-off Date LTV of the MezzCap Loan Combination are 1.14 and 81.1% respectively.
(16)    General McMullen Self                 Storage The property is subject to a master lease between Borrower (as landlord) and Evergreen Realty Advisors, Inc. (as tenanat), the property's management company. The lease is dated May 19, 2005 and expires on May 18, 2012. There are three, 5-year renewal options. The lease's current monthly rent is $38,604, however commencing May 2007 the rent will be reduced to $38,333 for the remaining term of the lease. The lease provides for addtional rent in an amount equal to 30.0% of the gross revenues in excess of $775,438, starting on the third lease year (due in July 2008) and 35.0%, commencing in the fifth lease year (due in July 2010). The tenant has the right to purchase the subject at anytime at fair market value.
(17)    Lambertson Lakes Shopping                 Center Phase II Property is 100% leased, but 74.1% occupied. (Master lease space of 3,323 SF). Borrower signed a 5-year Master Lease for the vacant spaces (one of 2,123 sf and one of 1,200 sf) at $18.00 per square foot. Both spaces have a lease expiration of 9/19/11.


ANNEX A-6

CERTAIN INFORMATION REGARDING RESERVES








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                    LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7





CONTROL                                                             PROPERTY
  NO.    FOOTNOTE                PROPERTY NAME                        TYPE                      SPECIFIC
---------------------------------------------------------------------------------------------------------------------

   1        (1)    520 Madison Avenue                         Office                N/A
   2        (2)    1211 Avenue of the Americas                Office                N/A
   3        (3)    Extendicare Portfolio                      Health Care           Skilled Nursing & Assisted Living
   4        (4)    Reston Town Center                         Office                N/A
   5        (5)    Colony Square                              Office                N/A
   6               Republic Portfolio                         Office                Suburban
   7               Government Property Advisors Portfolio     Office                N/A
   8               Arizona Retail Portfolio                   Retail                Various
   9        (6)    Midtown Plaza                              Office                N/A
  10               Martin Resorts                             Hotel                 Various
  11               Wolverine Portfolio                        Mobile Home Park      N/A
  12               Bucs Headquarters Office Bldg              Office                N/A
  13        (7)    The Gallery at Beach Place                 Retail                Anchored
  14               695/710 Route 46                           Office                N/A
  15               Archstone Woodlands Apartments             Multifamily           N/A
  16               Triangle Town Center Subordinate Tranche   Retail                Regional Mall
  17               500 Collins Avenue                         Retail                Unanchored
  18               Jefferson at Kessler Park                  Multifamily           N/A
  19               Santa Maria Plaza                          Retail                Anchored
  20               Redwood Portfolio II                       Mobile Home Park      N/A
  21               Thornblade Park Apartments                 Multifamily           N/A
  22               6380 Wilshire                              Office                N/A
  23               Weatherford Marketplace                    Retail                Anchored
  24               Brunswig Square                            Office                N/A
  25               Statesboro Mall                            Retail                Regional Mall
  26               Jefferson at Founders Park                 Multifamily           N/A
  27               175 Fulton Avenue                          Office                Suburban
  28               First and Main North                       Retail                Anchored
  29               Cool Creek Commons                         Retail                Anchored
  30               Sharp Rees-Stealy Medical Office Building  Office                Suburban
  31               Windsor Apartments                         Multifamily           N/A
  32               Lexington on the Green                     Multifamily           N/A
  33               Grandview Apartments                       Multifamily           N/A
  34               Bradford Towne Center                      Retail                Anchored
  35               Lexham Street Retail                       Mixed Use             Office/Retail
  36               Sunset Place                               Mixed Use             Office/Retail
  37               Beta Center                                Office                N/A
  38               New Hampton Commons Apartments             Multifamily           N/A
  39               Jamesbridge Apartments                     Multifamily           N/A
  40               West Road Collection                       Retail                Anchored
  41               Canterbury Village Shopping Center         Retail                Unanchored
  42               Cumberland Links Apartments                Multifamily           Garden
  43               Sienna Springs Apartments                  Multifamily           N/A
  44               Dublin Mall                                Retail                Regional Mall
  45               Shoppes at Oakmonte                        Retail                Shadow Anchored
  46               Meadows Marketplace                        Retail                Anchored
  47               Windsor Landing Apartments                 Multifamily           Garden
  48               Ramsgate Apartments                        Multifamily           N/A
  49               Citizens Ohio Portfolio 2                  Retail                Single Tenant
  50               Victor Marketplace                         Retail                Anchored
  51               Indian Springs Apartments                  Multifamily           N/A
  52               Home Depot                                 Retail                Anchored
  53               Mid Park Centre                            Mixed Use             Office/Industrial
  54               Citizens Michigan Portfolio 5              Retail                Single Tenant
  55               Cross Continents Office Building           Office                N/A
  56               Felton's Shopping Center                   Retail                Anchored
  57               Melbourne Village                          Retail                Unanchored
  58               Pacific Marina Inn                         Hotel                 Limited Service
  59               Bee's Ferry Crossing                       Retail                Anchored
  60               Park Place LaPalma                         Office                Suburban
  61        (8)    Route 6 and Stoneleigh                     Retail                Anchored
  62               Majestic Oaks                              Multifamily           N/A
  63               Manns Mobile Home Park Portfolio           Mobile Home Park      N/A
  64               Citizens Illinois Portfolio 3              Retail                Single Tenant
  65               Drug Store Portfolio                       Retail                Single Tenant
  66               Boulevard Estates                          Mobile Home Park      N/A
  67               Citizens Illinois Portfolio 1              Retail                Single Tenant
  68               Bank Street Court                          Multifamily           N/A
  69               Iron Point Office                          Office                Suburban
  70               Phoenicia Specialty Foods                  Retail                Anchored
  71               Rampart Campus                             Office                Suburban
  72        (9)    Commonwealth Center                        Office                N/A
  73               Woodlands Retail                           Retail                Single Tenant
  74               Park Place Plaza                           Retail                Anchored
  75               Lakeview I & II                            Office                N/A
  76               Citizens Northeast Portfolio               Retail                Single Tenant
  77               Parker Square - Bldg 600                   Mixed Use             Office/Retail
  78               Serene Village                             Multifamily           N/A
  79               Crystal Pointe Apartments                  Multifamily           Garden
  80               Windsor Townhomes & Erin's @ Windsor       Multifamily           N/A
  81               PrimaPharm Life Science Building           Mixed Use             Office/Industrial
  82               Preston Racquet Club                       Multifamily           N/A
  83               Royal Crest Apartments                     Multifamily           N/A
  84               Pratt & Whitney Building                   Industrial/Warehouse  N/A
  85               CVS Commerce Bank - New Carrolton          Retail                Anchored
  86               North Shore Self Storage                   Self Storage          N/A
  87               Fountains Gardens & Fountains Corner       Multifamily           Garden
  88               Town West Plaza                            Retail                Anchored
  89               Waynesboro Shopping Center                 Retail                Shadow Anchored
  90               Hamburg Shopping Center                    Retail                Anchored
  91               Village Green Apartments                   Multifamily           N/A
  92               Gaffney Portfolio                          Multifamily           Garden
  93               Dix-Toledo Shopping Center                 Retail                Unanchored
  94               Shenandoah Woods                           Multifamily           N/A
  95               Ashley Furniture Home Store                Retail                Unanchored
  96               Air Industries                             Mixed Use             Office/Industrial
  97               Patel Hotel Portfolio                      Hotel                 Limited Service
  98               Fond du Lac Plaza                          Retail                Anchored
  99               Stor-More West Seattle                     Self Storage          N/A
  100              Northpark Plaza                            Retail                Anchored
  101              Varsity Properties                         Multifamily           N/A
  102              Stonegate Crossing                         Retail                Unanchored
  103              Citizens New York Portfolio 4              Retail                Single Tenant
  104              Citizens 15 Portfolio                      Retail                Single Tenant
  105              Village West Apartments                    Multifamily           Garden
  106              Citizens New York Portfolio 1              Retail                Single Tenant
  107              Chillicothe Plaza                          Retail                Shadow Anchored
  108              Maryland Food Center Warehouse             Industrial/Warehouse  N/A
  109              The University Medical Plaza               Office                Suburban
  110              Westbrook Apartments                       Multifamily           N/A
  111              Southern Oaks                              Multifamily           N/A
  112              Citizens 4 Portfolio                       Retail                Single Tenant
  113              Rocklin Self Storage                       Self Storage          N/A
  114              Lemon Bay                                  Retail                Anchored
  115              Lakewood Apartment Portfolio               Multifamily           N/A
  116              Walgreens - Henderson                      Retail                Anchored
  117              Citizens New York Portfolio 3              Retail                Single Tenant
  118              Best Western - Oak Harbor                  Hotel                 Limited Service
  119              Walgreens - Seguin, Texas                  Retail                Single Tenant
  120              504 Esplanade Apartments                   Multifamily           Garden
  121              Walgreens                                  Retail                Single Tenant
  122              Stor-More Burien                           Self Storage          N/A
  123              2051 Dogwood Street                        Office                N/A
  124              Fulton Industrial                          Industrial/Warehouse  N/A
  125              Edgewater & Westcourt Apartments           Multifamily           N/A
  126              Bear Valley West Self Storage              Self Storage          N/A
  127              Winston Plaza                              Retail                Unanchored
  128              General McMullen Self Storage              Self Storage          N/A
  129              Butterfield Business Center                Industrial/Warehouse  N/A
  130              100 Medical Center Parkway                 Office                N/A
  131              Plantation Storage                         Self Storage          N/A
  132              Maplewood Village Mobile Home Community    Mobile Home Park      Manufactured Housing
  133              Citizens 27 Portfolio                      Retail                Single Tenant
  134              Cool Springs Collection                    Retail                Shadow Anchored
  135              Hidden Pines                               Multifamily           N/A
  136              American Mini Storage                      Self Storage          N/A
  137      (10)    Rite Aid Zanesville                        Retail                Single Tenant
  138              Citizens 22 Portfolio                      Retail                Single Tenant
  139              Citizens New York Portfolio 2              Retail                Single Tenant
  140              Walgreens - Floyds Knob                    Retail                Anchored
  141              Pecanland Village SC                       Retail                Unanchored
  142              Walgreens - Reedsburg                      Retail                Single Tenant
  143              Parkview Apartments                        Multifamily           N/A
  144              Citizens 21 Portfolio                      Retail                Single Tenant
  145              North Meadows                              Retail                Unanchored
  146              Kuykendahl Medical Office                  Office                Suburban
  147              Sunrise II Mini Storage                    Self Storage          N/A
  148              Layton Hills Business Park                 Office                N/A
  149              Hamilton Mills                             Office                N/A
  150              Wortham Village Shopping Center            Retail                Unanchored
  151              Shelley Station                            Retail                Unanchored
  152              Citizens 13 Portfolio                      Retail                Single Tenant
  153      (11)    Storage Plus                               Self Storage          N/A
  154              Lincoln Meadows Retail Center              Retail                Anchored
  155              Storage Zone                               Self Storage          N/A
  156              Park Meadows Village and Mrs. Winners      Retail                Various
  157              Comfort Inn - Metro Airport                Hotel                 Limited Service
  158              Linens 'N Things of College Station        Retail                Unanchored
  159              Citizens 14 Portfolio                      Retail                Single Tenant
  160              Hampton Square Shopping Center             Retail                Anchored
  161      (12)    20 North Central Avenue                    Office                N/A
  162              Unity Pointe                               Multifamily           N/A
  163              Blalock Office Park                        Office                N/A
  164              Ashley Square                              Multifamily           N/A
  165              White Pines Plaza                          Retail                Anchored
  166              Saddle Vineyards Apartments                Multifamily           N/A
  167              Inglewood Village                          Multifamily           N/A
  168              Crossroads Shopping Center                 Retail                Anchored
  169              John's Creek                               Office                N/A
  170              Citizens 28 Portfolio                      Retail                Single Tenant
  171              Lambertson Lakes Shopping Center Phase II  Retail                Anchored
  172              Autumn Springs                             Office                N/A
  173              Silver Lake Plaza                          Retail                Anchored
  174      (13)    Diamond Head Inn                           Hotel                 Limited Service
  175              Stonecrest Village                         Retail                Unanchored
  176              Blackstone Building                        Office                N/A
  177              Lewisville Retail Strip Center             Retail                Anchored
  178              AMC Theatre Outlot Retail Center           Retail                Shadow Anchored
  179              Fidelity Retail                            Retail                Unanchored
  180              310 Professional Building                  Office                N/A
  181              Hampton Bays Medical                       Office                N/A
  182              Cleveland Ridge Apartments                 Multifamily           Garden
  183      (14)    Family Dollar - 1425 East 71st Street      Retail                Single Tenant
  184              GetGo Station Monroeville                  Retail                Shadow Anchored


         INITIAL DEPOSIT    ANNUAL DEPOSIT    REPLACEMENT      ANNUAL         CURRENT      TI & LC     AS OF
         TO THE DEFERRED  TO THE REPLACEMENT    RESERVE    DEPOSIT TO THE  BALANCE OF THE  RESERVE    DATE OF
CONTROL    MAINTENANCE          RESERVE         ACCOUNT        TI & LC        TI & LC      ACCOUNT    TI & LC
  NO.      ACCOUNT ($)        ACCOUNT ($)       CAP ($)      ACCOUNT ($)    ACCOUNT ($)    CAP ($)    ACCOUNT
--------------------------------------------------------------------------------------------------------------

   1                   0             157,200            0               0               0        0  11/11/2006
   2                   0                   0            0               0       2,518,475        0  11/11/2006
   3                   0           2,547,600            0               0               0        0  11/11/2006
   4                   0                   0            0               0               0        0  11/11/2006
   5                   0             123,872            0         827,449               0        0  11/11/2006
   6                   0                   0            0               0               0        0  11/11/2006
   7             393,094             212,353            0         530,882               0        0  11/11/2006
   8             268,520              96,673            0         357,195               0        0  11/11/2006
   9                   0              73,968            0         493,080               0        0  11/11/2006
  10                   0             500,000    1,000,000               0               0        0  11/11/2006
  11             171,250              73,051            0               0               0        0  11/11/2006
  12                   0                   0            0               0               0        0  11/11/2006
  13                   0              14,425       21,638               0       4,000,000  750,000  11/11/2006
  14                   0              38,796            0         258,660          64,665  500,000  11/11/2006
  15             205,750             136,573            0               0               0        0  11/11/2006
  16                   0             125,184      250,368         476,124         440,029  952,248  11/11/2006
  17                   0               4,977       14,930               0               0        0  11/11/2006
  18               1,344              84,500       84,500               0               0        0  11/11/2006
  19                   0              26,028       78,084         119,197               0  476,788  11/11/2006
  20               3,881              44,586            0               0               0        0  11/11/2006
  21              17,875              63,480      126,960               0               0        0  11/11/2006
  22                   0              22,536       22,536         102,161               0  150,237  11/11/2006
  23                   0              14,808       44,424               0               0        0  11/11/2006
  24                   0              27,196       27,196         150,940               0  135,982  11/11/2006
  25                   0              46,470            0         118,911          29,740  594,555  11/11/2006
  26                   0              84,000       84,000               0               0        0  11/11/2006
  27                   0               1,632            0         192,000               0  400,000  11/11/2006
  28                   0                   0            0               0               0        0  11/11/2006
  29                   0              16,895            0          48,276          28,161  241,356  11/11/2006
  30                   0                   0            0               0               0        0  11/11/2006
  31                 188              58,782            0               0               0        0  11/11/2006
  32               4,375              43,200       86,400               0               0        0  11/11/2006
  33                   0              80,000            0               0               0        0  11/11/2006
  34              43,946              39,536            0          60,324               0        0  11/11/2006
  35                   0               9,457            0          35,000          35,000  140,000  11/11/2006
  36                   0                   0            0               0           6,250  150,000  11/11/2006
  37              26,000              23,806       23,806         150,000               0  150,000  11/11/2006
  38               5,000              63,000            0               0               0        0  11/11/2006
  39              15,313              98,954            0               0               0        0  11/11/2006
  40                   0               6,585       19,755          26,100         504,523   78,300  11/11/2006
  41              25,000               9,431            0               0          50,000   50,000  11/11/2006
  42                   0                   0            0               0               0        0  11/11/2006
  43               4,375              75,600      336,000               0               0        0  11/11/2006
  44                   0              40,667            0         108,672          27,179  543,360  11/11/2006
  45                   0               6,821            0          36,000           6,004  108,000  11/11/2006
  46                   0                   0            0               0               0        0  11/11/2006
  47                   0              49,924            0               0               0        0  11/11/2006
  48              12,500              69,750            0               0               0        0  11/11/2006
  49                   0                   0            0               0               0        0  11/11/2006
  50                   0                   0        7,000               0               0   20,000  11/11/2006
  51               9,375              97,920            0               0               0        0  11/11/2006
  52                   0                   0            0               0               0        0  11/11/2006
  53                   0              34,242      102,726          60,000               0  160,000  11/11/2006
  54                   0                   0            0               0               0        0  11/11/2006
  55              47,731              16,002            0          75,000         161,034  200,000  11/11/2006
  56                   0              16,836            0          43,500           3,625        0  11/11/2006
  57                   0              19,516       58,548          40,913           3,412  141,793  11/11/2006
  58               2,500             123,735            0               0               0        0  11/11/2006
  59                   0               5,949       11,900          15,000               0   30,000  11/11/2006
  60                   0               5,796       17,388          50,000          12,510  150,000  11/11/2006
  61             114,397               7,507            0           8,981               0        0  11/11/2006
  62              88,009              50,740      101,480               0               0        0  11/11/2006
  63             311,200              31,450            0               0               0        0  11/11/2006
  64                   0                   0            0               0               0        0  11/11/2006
  65                   0               2,837        2,837               0           2,837    2,837  11/11/2006
  66              60,625              13,865            0               0               0        0  11/11/2006
  67                   0                   0            0               0               0        0  11/11/2006
  68                   0              13,435            0           6,128               0        0  11/11/2006
  69                   0                   0            0               0               0        0  11/11/2006
  70                   0              11,530            0          60,424         733,035  181,272  11/11/2006
  71                   0                   0            0               0               0        0  11/11/2006
  72                   0              12,573            0          50,000         250,205  400,000  11/11/2006
  73                   0                   0            0               0               0        0  11/11/2006
  74             197,500              13,101       39,303          44,474           3,709   96,949  11/11/2006
  75                   0               7,731       15,500         100,000               0  200,000  11/11/2006
  76                   0                   0            0               0               0        0  11/11/2006
  77                   0               3,694            0          36,941         150,000  120,000  11/11/2006
  78               5,688              35,816            0               0               0        0  11/11/2006
  79               6,563              32,185            0               0               0        0  11/11/2006
  80               9,688                   0       83,008               0               0        0  11/11/2006
  81                   0                   0            0          34,000           2,834  350,000  11/11/2006
  82              35,813              27,750            0               0               0        0  11/11/2006
  83              15,530              43,172            0               0               0        0  11/11/2006
  84                   0                   0            0               0               0        0  11/11/2006
  85                   0                   0            0               0               0        0  11/11/2006
  86              43,500                   0            0               0               0        0  11/11/2006
  87               8,125              49,500       99,000               0               0        0  11/11/2006
  88                   0              13,230       39,690          29,106           8,167   97,902  11/11/2006
  89                   0               4,279       12,837          15,000           1,250   75,000  11/11/2006
  90                   0                   0            0               0               0        0  11/11/2006
  91               3,125              33,000            0               0               0        0  11/11/2006
  92              66,838              44,000      132,000               0               0        0  11/11/2006
  93              30,625                   0            0               0               0        0  11/11/2006
  94              66,750                   0      174,000               0               0        0  11/11/2006
  95                   0                   0            0               0               0        0  11/11/2006
  96             243,000                   0            0               0               0        0  11/11/2006
  97                   0              75,775      303,100               0               0        0  11/11/2006
  98                   0              14,281       42,844          32,133          10,289   90,077  11/11/2006
  99                   0               7,920            0               0               0        0  11/11/2006
  100                  0               8,286       16,572          20,000           6,667   60,000  11/11/2006
  101              7,500              13,800            0               0               0        0  11/11/2006
  102                  0               3,270        6,450               0               0        0  11/11/2006
  103                  0                   0            0               0               0        0  11/11/2006
  104                  0                   0            0               0               0        0  11/11/2006
  105                  0              39,996            0               0               0        0  11/11/2006
  106                  0                   0            0               0               0        0  11/11/2006
  107                  0              14,189       42,567               0               0        0  11/11/2006
  108                  0              18,480            0          50,000         150,213  150,000  11/11/2006
  109                  0               4,498       13,494          40,000           6,670  200,000  11/11/2006
  110              2,875              30,000            0               0               0        0  11/11/2006
  111             89,300                   0      148,500               0               0        0  11/11/2006
  112                  0                   0            0               0               0        0  11/11/2006
  113                  0                   0            0               0               0        0  11/11/2006
  114                  0              19,565       58,695          50,273           4,192  144,780  11/11/2006
  115              3,750              22,000            0               0               0        0  11/11/2006
  116                  0                   0            0           2,964               0   11,856  11/11/2006
  117                  0                   0            0               0               0        0  11/11/2006
  118                  0              54,000            0               0               0        0  11/11/2006
  119                  0               1,482            0               0               0        0  11/11/2006
  120            128,125                   0            0               0               0        0  11/11/2006
  121                  0               2,086            0               0               0        0  11/11/2006
  122                  0                   0            0               0               0        0  11/11/2006
  123                  0               6,059            0          26,455         100,000  100,000  11/11/2006
  124                  0               8,014        8,014          17,630          55,000   26,713  11/11/2006
  125                  0              19,750            0               0               0        0  11/11/2006
  126                  0               7,119       21,360               0               0        0  11/11/2006
  127                  0               2,680            0               0               0        0  11/11/2006
  128             16,875              14,726            0               0               0        0  11/11/2006
  129             32,500              15,555            0          37,500          46,875  112,500  11/11/2006
  130                  0               4,046            0          13,486           2,248   15,000  11/11/2006
  131              7,500               9,431       20,000               0               0        0  11/11/2006
  132                  0               8,750       26,250               0               0        0  11/11/2006
  133                  0                   0            0               0               0        0  11/11/2006
  134                  0               2,117        6,351          15,417           1,285   46,251  11/11/2006
  135             51,250                   0      138,750               0               0        0  11/11/2006
  136                  0              15,306            0               0               0        0  11/11/2006
  137                  0                   0            0               0               0        0  11/11/2006
  138                  0                   0            0               0               0        0  11/11/2006
  139                  0                   0            0               0               0        0  11/11/2006
  140                  0                   0            0           1,482               0        0  11/11/2006
  141             10,275               2,350            0          20,000               0   60,000  11/11/2006
  142                  0                   0            0               0               0        0  11/11/2006
  143                  0              50,000            0               0               0        0  11/11/2006
  144                  0                   0            0               0               0        0  11/11/2006
  145                  0               3,318            0          11,060               0        0  11/11/2006
  146                  0               4,400       13,200          17,000           1,417   68,000  11/11/2006
  147                  0               6,964       20,891               0               0        0  11/11/2006
  148             50,963               5,958      100,000          10,000         100,000  100,000  11/11/2006
  149                  0               1,629            0               0               0        0  11/11/2006
  150                  0                   0            0          15,000           2,502   45,000  11/11/2006
  151                  0               6,297       18,891           8,396             700   46,598  11/11/2006
  152                  0                   0            0               0               0        0  11/11/2006
  153                  0                   0       17,589               0               0        0  11/11/2006
  154                  0               1,000        4,980           4,995           3,331   40,000  11/11/2006
  155             15,625              14,672            0               0               0        0  11/11/2006
  156                  0               1,050        5,252          12,441               0   50,000  11/11/2006
  157             32,500              79,862            0               0               0        0  11/11/2006
  158                  0               2,820            0           2,800          50,233        0  11/11/2006
  159                  0                   0            0               0               0        0  11/11/2006
  160                  0               7,193            0               0         103,996   95,900  11/11/2006
  161                  0                   0            0               0               0        0  11/11/2006
  162             20,750                   0       81,750               0               0        0  11/11/2006
  163            160,375               6,953            0          34,767          25,000  173,835  11/11/2006
  164             44,178                   0       87,750               0               0        0  11/11/2006
  165              5,625               8,692       17,384          22,968          13,398   68,903  11/11/2006
  166              9,375              25,000            0               0               0        0  11/11/2006
  167             45,800              23,250       69,750               0               0        0  11/11/2006
  168                  0              16,087       48,621          10,288           1,342   57,098  11/11/2006
  169              5,000               3,041            0          25,338           6,337  100,000  11/11/2006
  170                  0                   0            0               0               0        0  11/11/2006
  171                  0               2,049        4,918           7,858             655   18,859  11/11/2006
  172                  0               3,959            0           9,899          70,000  100,000  11/11/2006
  173                  0               1,658        8,292               0         100,035  100,000  11/11/2006
  174                  0              24,765            0               0               0        0  11/11/2006
  175                  0               2,004            0          16,010           2,668   48,024  11/11/2006
  176                  0               2,546        2,546          25,000               0   25,000  11/11/2006
  177                625                 637            0           4,235             706   40,000  11/11/2006
  178                  0                 844        2,532               0           1,320        0  11/11/2006
  179                  0               1,113            0           5,567             464        0  11/11/2006
  180                  0                   0        2,950          20,000               0   20,000  11/11/2006
  181              3,750               1,160            0           2,900               0        0  11/11/2006
  182                  0               6,400            0               0               0        0  11/11/2006
  183                  0                   0            0               0               0        0  11/11/2006
  184                  0                   0            0               0               0        0  11/11/2006

Annex A-6 Footnotes

(1)    520 Madison Avenue The 520 Madison Avenue Borrower is required to deposit all lease termination payments in excess of $750,000 into the leasing reserve account. In lieu of making the payments to the leasing reserve account, provided no uncured event of default exists, the 520 Madison Avenue Borrower may deliver to the lender a letter of credit as security for the 520 Madison Avenue Borrower’s lease termination obligations.
The 520 Madison Avenue Borrower has deposited $16,519,669 into an unfunded tenant obligations reserve account to pay for (i) up to $11,487,769 of the costs of tenant allowances, tenant improvements and leasing commissions related to specified tenants and (ii) up to $5,031,900 of tenant allowances, tenant improvements and leasing costs related to the re-leasing of space at the 520 Madison Avenue Mortgaged Property that is vacated by tenants during calendar years 2007 and 2008 as a result of the scheduled expiration of such tenants’ leases.
The 520 Madison Avenue Borrower is required to make monthly deposits into a tax and insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by the lender to be payable, during the following 12 months and one-twelfth of an amount which would be sufficient to pay the insurance premiums due relating to the renewal of insurance policies. Notwithstanding the foregoing, so long as the 520 Madison Avenue Borrower provides evidence of a blanket insurance policy covering the 520 Madison Avenue Mortgaged Property, as approved by the lender, the monthly insurance escrow payments will not be required.
The 520 Madison Avenue Borrower is required to make monthly deposits into a replacement reserve account in the amount of $13,100 to pay for the costs of replacements and repairs required to be made to the 520 Madison Avenue Mortgaged Property during each calendar year, including, without limitation, proposed capital replacements and improvements in the 520 Madison Avenue Borrower’s annual operating budget.
(2)    1211 Avenue of the Americas At origination, the 1211 Avenue of the Americas Borrower deposited $23,293,997 into the Ropes and Gray reserve account. Provided no event of default exists, lender will direct the agent under the lockbox account to transfer $1,294,111 from the Ropes and Gray reserve account to the lockbox account on the first day of each month up to and including February 1, 2008.
At origination, the 1211 Avenue of the Americas Borrower deposited $5,814,804 into a required repairs reserve account to pay for the modernization of elevators and escalators and renovations to the outdoor plaza at the 1211 Avenue of the Americas Mortgaged Property.


Annex A-6 Footnotes  — continued

At origination, the 1211 Avenue of the Americas Borrower deposited $2,518,475 into a rollover reserve account to pay for the costs of tenant concessions, leasing costs and other related costs.
Following the occurrence and during the continuance of an event of default or for so long as the DSCR for any fiscal year is less than 1.05x, the 1211 Avenue of the Americas Borrower will make monthly deposits into a tax reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by lender to be payable during the following 12 months.
Following the occurrence and during the continuance of an event of default or for so long as the DSCR for any fiscal year is less than 1.05x, the 1211 Avenue of the Americas Borrower will make monthly deposits into an insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the insurance premiums due for the renewal of insurance policies. Notwithstanding the foregoing, the 1211 Avenue of the Americas Borrower will not be required to deposit insurance funds if the 1211 Avenue of the Americas Borrower delivers satisfactory evidence to lender that all such insurance premiums have been previously paid.
(3)    Extendicare Portfolio The Extendicare Portfolio Borrowers are required to make monthly deposits into a tax and insurance reserve account in an amount equal to one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by the lender to be payable, during the following 12 months and one-twelfth of an amount which would be sufficient to pay the insurance premiums due for the renewal of insurance policies. Notwithstanding the foregoing, so long as (a) the debt yield exceeds 13%, (b) the Extendicare Portfolio Borrowers have delivered to the lender a guaranty of such obligation from Guarantor, and (c) the Extendicare Portfolio Borrowers deliver evidence reasonably satisfactory to the lender that all taxes required to be paid have been paid, the monthly tax escrow payments will not be required. Notwithstanding the foregoing, so long as the Extendicare Portfolio Borrowers provide evidence of a blanket insurance policy covering the Extendicare Portfolio Mortgaged Property, as approved by the lender, the monthly insurance escrow payment will not be required.
The Extendicare Portfolio Borrowers are required to make monthly deposits into a replacement reserve account in an amount equal to one-twelfth of the product of $300 multiplied by the aggregate number of beds at the Extendicare Portfolio facilities.
The Extendicare Portfolio Borrowers are required to make monthly deposits into a ground rent reserve account in an amount equal to the ground rent that will be payable under


Annex A-6 Footnotes  — continued

each ground lease for the month in which such payment occurs. Notwithstanding the foregoing, the Extendicare Portfolio Borrowers will not be required to make monthly ground rent reserve deposits provided the Extendicare Portfolio Borrowers deliver, throughout the term of the Extendicare Portfolio Mortgage Loan, evidence reasonably satisfactory to the lender that all ground rent required to be paid by the Extendicare Portfolio Borrowers pursuant to any ground lease has timely been paid by the Extendicare Portfolio Borrowers. As long as the Extendicare Portfolio Borrowers are not required to make monthly deposits of the ground rent monthly deposit, the initial ground rent deposit will, other than during the continuance of an event of default, be held in the ground rent reserve account and will not be disbursed for the payment of ground rent.
(4)    Reston Town Center Upon an event of default or if the DSCR falls below 1.10x, the Reston Town Center Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Reston Town Center Mortgaged Property. The Reston Town Center Borrower will not be required to fund the Insurance Reserve provided that all insurance premiums have been paid under Equity Office Property’s blanket policy. The Reston Town Center Borrower may provide a letter of credit in lieu of the reserve funds provided the aggregate amount of the letter of credit is at least the amount of the required reserves.    
If a Qualified Manager is not managing the Reston Town Center Mortgaged Property and Equity Office Properties does not own at least 20% of the direct or indirect interests in the Reston Town Center Borrower and does not control the Reston Town Center Borrower, the Reston Town Center Borrower is required to make monthly deposits in the amount of $12,641 into the Replacement Reserve. The Reston Town Center Borrower may provide a Letter of Credit in lieu of the reserve funds provided the aggregarte amount of the Letter of Credit is at least the amount of the required reserves.
If more than 10% of the College Entrance Board or the Pfizer space is not subject to a qualifying lease extension or renewal one year prior to the lease termination date in 2009, then the Reston Town Center Borrower is required to make monthly deposits into the rollover reserve up to a maximum of $2,213,880 for the College Entrance Board space and $2,518,960 for the Pfizer space. In addition, upon an event of default or if the DSCR falls below 1.10x, the Reston Town Center Borrower is required to make monthly reserve deposits into the rollover reserve in the amount of $166,666.67 per month up to a maximum of $2,000,000. The Reston Town


Annex A-6 Footnotes  — continued

Center Borrower may provide a letter of credit in lieu of the reserve funds provided the aggregate amount of the letter of credit is at least the amount of the required reserves.
(5)    Colony Square At closing, the Colony Square Borrower deposited $864,487 into an unfunded tenant obligations reserve account for tenant allowances, tenant improvements and leasing commissions at the Colony Square Mortgaged Property. In addition, $68,818 will be deposited monthly into this account.
The Colony Square Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Colony Square Mortgaged Property. Notwithstanding the foregoing, so long as the Colony Square Borrower provides evidence of a blanket insurance policy covering the Colony Square Mortgaged Property, the monthly insurance escrow payments will not be required.
The Colony Square Borrower is required to make monthly deposits into the replacement reserve account in the amount of $10,323 for costs related to replacements and repairs at the Colony Square Mortgaged Property.
The Colony Square Borrower is required to deposit into the leasing reserve any lease termination payments in excess of $500,000 to be used for tenant improvements, leasing commissions and legal expenses related to leases at the Colony Square Mortgaged Property.
(6)    Midtown Plaza At closing, the Midtown Plaza Borrower deposited $749,751 into an unfunded tenant obligations reserve account for tenant allowances, tenant improvements, and leasing commissions at the Midtown Plaza Mortgaged Property. In addition, $41,090 will be deposited monthly into this account.
The Midtown Plaza Borrower is required to make monthly escrow deposits for the payment of real estate taxes and insurance premiums in an amount equal to one-twelfth of the estimated annual real estate taxes and insurance premiums for the Midtown Plaza Mortgaged Property. Notwithstanding the foregoing, so long as an approved blanket insurance policy covering the Midtown Plaza Mortgaged Property, the monthly insurance escrow payment will not be required.
The Midtown Plaza Borrower is required to make monthly deposits into the replacement reserve account in the amount of $6,164 for costs related to replacements and repairs at the Midtown Plaza Mortgaged Property.
The Midtown Plaza Borrower is required to deposit into the leasing reserve any lease termination payments in excess of $500,000 to be used for tenant improvements, leasing commissions and legal expenses related to leases at the Midtown


Annex A-6 Footnotes  — continued

Plaza Mortgaged Property.
(7)    The Gallery at Beach Place On origination, Borrower shall pay to Lender $4,000,000 (the ‘‘Initial Rollover Reserve Deposit’’), which amount together with all lease termination payments shall be deposited in the rollover reserve Account and held by Lender for tenant improvement and leasing commission obligations.
(8)    Route 6 and Stoneleigh The related borrower is required to fund an additional $300,000 per annum into the tenant improvement and leasing commissions reserve account in the event that A&P vacates the property.
(9)    Commonwealth Center Ongoing reserves for tenant improvements and leasing commissions are capped at $400,000. Provided that UHS of Delaware Inc. or a replacement tenant acceptable to lender has re-signed its lease for a term of no less than five years by January 31, 2009 and Everdrive, LLC or a replacement tenant acceptable to Lender has resigned its lease for a term of no less than five years by July 1, 2007, the tenant improvement and leasing commissions reserve cap will be reduced to $150,000.
Commencing on the payment date in February 2009, provided UHS of Delaware Inc. or a replacement tenant acceptable to lender has not resigned its lease for a term of no less than five years, the borrower will be required to fund an additional $72,000 per annum into the tenant improvement and leasing commission reserve account, which shall not be subject to the reserve cap. Commencing on the payment date in February 2014, provided UHS of Delaware Inc., Everdrive, LLC or a replacement tenant acceptable to Lender has not re-signed its lease for a term of no less than five years from August 1, 2014, the related borrower will be required to fund an additional $132,000 per annum into the tenant improvement and leasing commission reserve account, which shall not be subject to the reserve cap.
(10)    Rite Aid Zanesville The borrower will be required to deposit monthly payments for taxes, insurance, capital expenditures and tenant improvements and leasing commissions into reserves upon certain events described in the mortgage loan documentation. The principal has guaranteed the monthly payment for taxes, insurance, capital expenditures and tenant improvements and leasing commissions from closing until such time as the related borrower is required to commence depositing monthly payments into such reserves.
(11)    Storage Plus The amount of $17,589 was escrowed at the closing of the mortgage loan for capital expenditures. No ongoing reserves for capital expenditures are required, provided the balance of the capital expenditure reserve account is no less than


Annex A-6 Footnotes  — continued

$17,589. In the event that the balance of the capital expenditures reserve account falls below $17,589, monthly deposits in the annual amount of $5,863 will be required.
(12)    20 North Central Avenue The borrower will be required to deposit monthly payments for taxes, insurance, capital expenditures and tenant improvements and leasing commissions into reserves upon certain events described in the mortgage loan documentation. The principal has guaranteed the monthly payment for taxes, insurance, capital expenditures and tenant improvements and leasing commissions from closing until such time as the related borrower is required to commence depositing monthly payments into such reserves.
(13)    Diamond Head Inn Ongoing reserves for capital expenditures will adjust commencing on the payment date in November 2007 and every subsequent November based on an amount equal to four percent of the Gross Income from Operations for the previous calendar year.
(14)     Family Dollar – 1425 East 71st Street The borrower will be required to deposit monthly payments for taxes, insurance, capital expenditures and tenant improvements and leasing commissions into reserves upon certain events described in the mortgage loan documentation. The principal has guaranteed the monthly payment for taxes, insurance, capital expenditures and tenant improvements and leasing commissions from closing until such time as the related borrower is required to commence depositing monthly payments into such reserves.


ANNEX B

CERTAIN INFORMATION REGARDING MULTIFAMILY PROPERTIES









                      [THIS PAGE INTENTIONALLY LEFT BLANK.]





ITALICS Indicate Loans Secured by Multiple Properties

Capitalized terms used on this Annex B have the meanings assigned thereto in the
Glossary to the accompanying Offering Prospectus.



CONTROL                            PROPERTY                                    CUT-OFF DATE  UTILITIES PAID
  NO.    FOOTNOTE                    NAME                         COUNTY        BALANCE ($)     BY TENANT
-----------------------------------------------------------------------------------------------------------

   11              Wolverine Portfolio                      Various              46,550,000  Yes
  11A1             South Lyon Woods                         Oakland               8,000,000  Yes
  11A2             Appletree Estates                        Kent                  6,400,000  Yes
  11A3             College Heights                          Oakland               5,800,000  Yes
  11A4             Metro Commons                            Wayne                 5,550,000  Yes
  11A5             Brighton Village                         Livingston            5,300,000  Yes
  11A6             Hillcrest Acres                          Kalamazoo             4,900,000  Yes
  11A7             Royal Village                            Lucas                 4,700,000  Yes
  11A8             Fernwood Estates                         Volusia               2,200,000  Yes
  11A9             Chalet Village                           Hillsborough          2,100,000  Yes
 11A10             Satellite Bay                            Pinellas              1,600,000  Yes
   15              Archstone Woodlands Apartments           Cobb County          32,750,000  Yes
   18              Jefferson at Kessler Park                Dallas               25,200,000  Yes
   20              Redwood Portfolio II                     Various              22,550,000  Yes
  20A1             Colonial Acres                           Kalamazoo            11,550,000  Yes
  20A2             Algoma Estates                           Kent                  7,250,000  Yes
  20A3             Colonial Manor                           Kalamazoo             3,750,000  Yes
   21              Thornblade Park Apartments               Greenville County    22,200,000  Yes
   26              Jefferson at Founders Park               Dallas County        21,300,000  Yes
   31              Windsor Apartments                       King County          15,900,000  Yes
   32              Lexington on the Green                   DeKalb County        15,000,000  Yes
   33              Grandview Apartments                     Buffalo              14,716,000  Yes
   38              New Hampton Commons Apartments           Hampton City         13,788,562  Yes
   39              Jamesbridge Apartments                   Shelby County        13,500,000  Yes
   42              Cumberland Links Apartments              Licking              11,977,302  Yes
   43              Sienna Springs Apartments                Dallas               11,463,534  Yes
   47              Windsor Landing Apartments               Clayton County       10,350,000  Yes
   48              Ramsgate Apartments                      Denton County        10,000,000  Yes
   51              Indian Springs Apartments                Harris County         9,000,000  Yes
   62              Majestic Oaks                            Alachua County        8,000,000  Yes
   63              Manns Mobile Home Park Portfolio         Various               7,967,110  Yes
  63A1             M.A.N.N.S. MHP                           Franklin              2,791,261  Yes
  63A2             Ashville MHP                             Pickaway              2,698,836  Yes
  63A3             Westbrook MHP                            Franklin              1,441,844  Yes
  63A4             By Way MHP                               Franklin              1,035,170  Yes
   66              Boulevard Estates                        Pinellas              7,800,000  Yes
   68              Bank Street Court                        Philadelphia          7,500,000  Yes
   78              Serene Village                           Snohomish County      6,650,000  Yes
   79              Crystal Pointe Apartments                King County           6,550,000  Yes
   80              Windsor Townhomes & Erin's @ Windsor     Dallas                6,280,000  Yes
   82              Preston Racquet Club                     Dallas                5,850,000  Yes
   83              Royal Crest Apartments                   Escambia County       5,850,000  Yes
   87              Fountains Gardens & Fountains Corner     Tarrant County        5,530,000  Yes
   91              Village Green Apartments                 Madison               5,348,000  Yes
   92              Gaffney Portfolio                        Cherokee              5,325,698  N/A
  92A1             Creekside at Wellington                  Cherokee              2,929,134  No
  92A2             Magnolia Ridge Apartments                Cherokee              2,396,564  Yes
   94              Shenandoah Woods                         Harris County         5,200,000  Yes
  101              Varsity Properties                       Travis                5,000,000  Yes
 101A1             604-612 Franklin Boulevard               Travis                1,560,525  Yes
 101A2             207 West 39th Street                     Travis                  484,554  Yes
 101A3             2514 Hartford Road                       Travis                  454,270  Yes
 101A4             2503 Hartford Road                       Travis                  436,965  Yes
 101A5             3203 Highland Terrace                    Travis                  415,333  Yes
 101A6             3804 Duval Street                        Travis                  328,805  Yes
 101A7             4506 Caswell Avenue                      Travis                  311,500  Yes
 101A8             5007 Westfield Drive                     Travis                  259,583  Yes
 101A9             5004 Westfield Drive                     Travis                  259,583  Yes
 101A10            5002 North Fresco Drive                  Travis                  246,604  Yes
 101A11            3907 Avenue F                            Travis                  242,278  Yes
  105              Village West Apartments                  Lee County            4,840,000  Yes
  110              Westbrook Apartments                     Platte                4,450,000  Yes
  111              Southern Oaks                            Harris County         4,400,000  Yes
  115              Lakewood Apartment Portfolio             Cuyahoga              4,100,000  Yes
 115A1             Belvidere Apartments                     Cuyahoga              2,273,000  Yes
 115A2             Adriana Apartments                       Cuyahoga              1,075,000  Yes
 115A3             Riverside Apartments                     Cuyahoga                752,000  Yes
  120              504 Esplanade Apartments                 Los Angeles           3,996,579  Yes
  125              Edgewater & Westcourt Apartments         Cuyahoga              3,750,000  Yes
 125A1             Edgewater Apartments                     Cuyahoga              2,250,000  Yes
 125A2             Westcourt Apartments                     Cuyahoga              1,500,000  Yes
  132              Maplewood Village Mobile Home Community  Brevard               3,593,574  N/A
  135              Hidden Pines                             Harris County         3,475,000  Yes
  143              Parkview Apartments                      Grayson County        3,200,000  Yes
  162              Unity Pointe                             Harris County         2,440,000  Yes
  164              Ashley Square                            Harris County         2,420,000  Yes
  166       (1)    Saddle Vineyards Apartments              Shelby                2,358,235  Yes
  167              Inglewood Village                        Harris County         2,300,000  Yes
  182              Cleveland Ridge Apartments               Durham County         1,200,000  Yes


CONTROL         UTILITIES PAID         # OF  AVG. RENT  MAX. RENT   # OF     AVG. RENT    MAX. RENT    # OF 1      AVG. RENT
  NO.             BY TENANT            PADS   PADS ($)   PADS ($)  STUDIOS  STUDIOS ($)  STUDIOS ($)  BEDROOMS  1 BEDROOMS ($)
------------------------------------------------------------------------------------------------------------------------------

   11    Various                      1,649        393        466        0            0            0         0               0
  11A1   Electric, Gas, Water, Sewer    211        466        466        0            0            0         0               0
  11A2   Electric, Gas, Water, Sewer    238        357        360        0            0            0         0               0
  11A3   Electric, Gas                  161        434        434        0            0            0         0               0
  11A4   Electric, Gas, Water, Sewer    227        420        421        0            0            0         0               0
  11A5   Electric, Gas, Water, Sewer    194        408        423        0            0            0         0               0
  11A6   Electric, Gas, Water, Sewer    150        364        367        0            0            0         0               0
  11A7   Electric, Gas, Water, Sewer    233        349        349        0            0            0         0               0
  11A8   Electric, Water                 92        319        319        0            0            0         0               0
  11A9   Electric                        60        389        389        0            0            0         0               0
 11A10   Electric                        83        352        352        0            0            0         0               0
   15    Electric, Gas                    0          0          0        0            0            0       410             544
   18    Electric, Water                  0          0          0        0            0            0       178             889
   20    Various                      1,150        344        380        0            0            0         0               0
  20A1   Electric, Gas, Water, Sewer    612        341        354        0            0            0         0               0
  20A2   Electric, Gas                  343        361        380        0            0            0         0               0
  20A3   Electric, Gas, Water, Sewer    195        321        331        0            0            0         0               0
   21    Electric, Water, Sewer           0          0          0        0            0            0        94             703
   26    Electric, Water                  0          0          0        0            0            0       186             836
   31    Electric, Water, Sewer           0          0          0        0            0            0        58             750
   32    Electric, Water, Sewer           0          0          0        0            0            0        72             758
   33    Electric, Gas                    0          0          0        0            0            0        64             489
   38    Electric, Water, Sewer           0          0          0        0            0            0        48             638
   39    Electric                         0          0          0        0            0            0       240             513
   42    Electric, Gas, Water, Sewer      0          0          0        0            0            0        16             601
   43    Electric                         0          0          0        0            0            0       168             491
   47    Electric, Gas, Water, Sewer      0          0          0        0            0            0        58             627
   48    Electric, Water                  0          0          0       72          437          650       109             478
   51    Electric, Water, Sewer           0          0          0        0            0            0       300             489
   62    Electric                         0          0          0        0            0            0        36             515
   63    Various                        629        256        340        0            0            0         0               0
  63A1   Electric                       260        269        270        0            0            0         0               0
  63A2   Electric, Water, Sewer         212        228        340        0            0            0         0               0
  63A3   Electric                        94        263        266        0            0            0         0               0
  63A4   Electric                        63        250        250        0            0            0         0               0
   66    Electric                       287        412        419        0            0            0         0               0
   68    Electric                         0          0          0       44        1,063        1,635        15           1,119
   78    Electric, Water, Sewer           0          0          0        0            0            0        36             644
   79    Electric, Water, Sewer           0          0          0        0            0            0         0               0
   80    Electric                         0          0          0        0            0            0        44             501
   82    Electric, Water, Sewer           0          0          0        0            0            0        15             556
   83    Electric, Water, Sewer           0          0          0        0            0            0        32             537
   87    Electric                         0          0          0        0            0            0        52             486
   91    Electric, Gas                    0          0          0        0            0            0         0               0
   92    Various                          0          0          0        0            0            0         0               0
  92A1   None                             0          0          0        0            0            0        18             480
  92A2   Electric, Gas                    0          0          0       12          276          299        16             331
   94    Electric, Water, Sewer           0          0          0        0            0            0       144             472
  101    Electric, Water, Gas, Sewer      0          0          0       92          628        1,000         0               0
 101A1   Electric, Water, Gas, Sewer      0          0          0       30          601          625         0               0
 101A2   Electric, Water, Gas, Sewer      0          0          0        8          700          950         0               0
 101A3   Electric, Water, Gas, Sewer      0          0          0        9          583          600         0               0
 101A4   Electric, Water, Gas, Sewer      0          0          0        7          721        1,000         0               0
 101A5   Electric, Water, Gas, Sewer      0          0          0        7          686          920         0               0
 101A6   Electric, Water, Gas, Sewer      0          0          0        5          760          760         0               0
 101A7   Electric, Water, Gas, Sewer      0          0          0        5          720          900         0               0
 101A8   Electric, Water, Gas, Sewer      0          0          0        6          500          500         0               0
 101A9   Electric, Water, Gas, Sewer      0          0          0        6          500          500         0               0
 101A10  Electric, Water, Gas, Sewer      0          0          0        5          570          570         0               0
 101A11  Electric, Water, Gas, Sewer      0          0          0        4          700          700         0               0
  105    Electric, Water, Gas, Sewer      0          0          0        0            0            0        64             385
  110    Electric, Gas                    0          0          0        0            0            0         0               0
  111    Electric, Water, Sewer           0          0          0        0            0            0       165             501
  115    Electric                         0          0          0        0            0            0        66             565
 115A1   Electric                         0          0          0        0            0            0        34             609
 115A2   Electric                         0          0          0        0            0            0         7             651
 115A3   Electric                         0          0          0        0            0            0        25             481
  120    Electric                         0          0          0        0            0            0        18           1,542
  125    Electric                         0          0          0        4          586          675        67             659
 125A1   Electric                         0          0          0        3          603          675        47             666
 125A2   Electric                         0          0          0        1          535          535        20             642
  132    None                           175        343      1,005        0            0            0         0               0
  135    Electric, Water, Sewer           0          0          0        0            0            0       119             509
  143    Electric, Water, Sewer           0          0          0        0            0            0        88             430
  162    Electric, Water, Sewer           0          0          0        0            0            0        80             530
  164    Electric, Water, Sewer           0          0          0        0            0            0        77             519
  166    Gas                              0          0          0        0            0            0        12             375
  167    Electric, Water, Sewer           0          0          0        0            0            0        34             505
  182    Electric                         0          0          0        0            0            0         0               0


CONTROL     MAX. RENT     # OF 2      AVG. RENT       MAX. RENT      # OF 3     AVG. RENT       MAX. RENT     # OF 4
  NO.    1 BEDROOMS ($)  BEDROOMS  2 BEDROOMS ($)  2 BEDROOMS ($)  BEDROOMS  3 BEDROOMS ($)  3 BEDROOMS ($)  BEDROOMS
---------------------------------------------------------------------------------------------------------------------

   11                 0         0               0               0         0               0               0         0
  11A1                0         0               0               0         0               0               0         0
  11A2                0         0               0               0         0               0               0         0
  11A3                0         0               0               0         0               0               0         0
  11A4                0         0               0               0         0               0               0         0
  11A5                0         0               0               0         0               0               0         0
  11A6                0         0               0               0         0               0               0         0
  11A7                0         0               0               0         0               0               0         0
  11A8                0         0               0               0         0               0               0         0
  11A9                0         0               0               0         0               0               0         0
 11A10                0         0               0               0         0               0               0         0
   15               795       234             710             940         0               0               0         0
   18             1,167       142           1,160           1,395        18           1,544           1,575         0
   20                 0         0               0               0         0               0               0         0
  20A1                0         0               0               0         0               0               0         0
  20A2                0         0               0               0         0               0               0         0
  20A3                0         0               0               0         0               0               0         0
   21               760       144             909           1,190        55           1,111           1,330         0
   26             1,390       138           1,127           1,395        12           1,405           1,510         0
   31               805        90             916           1,110        54           1,124           1,245         0
   32               795       114             904             935        30           1,024           1,045         0
   33               565       177             544           1,160        79             642           1,425         0
   38               690       192             742             900        12             878             915         0
   39               529       192             641             679         0               0               0         0
   42               650       200             751             919         0               0               0         0
   43               575       136             622             860        32             738           1,030         0
   47               709        76             762             899        66             835           1,043         0
   48             1,040        89             607           1,239         9             978           1,090         0
   51               535       108             648             680         0               0               0         0
   62               564       136             696             887         0               0               0         0
   63                 0         0               0               0         0               0               0         0
  63A1                0         0               0               0         0               0               0         0
  63A2                0         0               0               0         0               0               0         0
  63A3                0         0               0               0         0               0               0         0
  63A4                0         0               0               0         0               0               0         0
   66                 0         0               0               0         0               0               0         0
   68             1,275         0               0               0         0               0               0         0
   78               685        85             762             815         0               0               0         0
   79                 0        63             764             895        42             870             995         0
   80               525       140             604             625         0               0               0         0
   82               650        88             776             890         8             821             850         0
   83               570       132             586             650         8             713             740         0
   87               515       114             571             650        32             735             735         0
   91                 0        88             516             695        44             655             745         0
   92                 0         0               0               0         0               0               0         0
  92A1              600        66             504             625         8             529             557         0
  92A2              341        32             420             490        20             464             495         4
   94               935        88             577             605         0               0               0         0
  101                 0         0               0               0         0               0               0         0
 101A1                0         0               0               0         0               0               0         0
 101A2                0         0               0               0         0               0               0         0
 101A3                0         0               0               0         0               0               0         0
 101A4                0         0               0               0         0               0               0         0
 101A5                0         0               0               0         0               0               0         0
 101A6                0         0               0               0         0               0               0         0
 101A7                0         0               0               0         0               0               0         0
 101A8                0         0               0               0         0               0               0         0
 101A9                0         0               0               0         0               0               0         0
 101A10               0         0               0               0         0               0               0         0
 101A11               0         0               0               0         0               0               0         0
  105               435        80             530             575        16             582             590         0
  110                 0        80             433             490        40             561             610         0
  111               601        33             689             775         0               0               0         0
  115               690        21             775             865         0               0               0         1
 115A1              665         7             696             765         0               0               0         1
 115A2              690        14             814             865         0               0               0         0
 115A3              560         0               0               0         0               0               0         0
  120             1,850         6           1,845           2,050         1           2,495           2,495         0
  125               735         8             839             925         0               0               0         0
 125A1              735         0               0               0         0               0               0         0
 125A2              715         8             839             925         0               0               0         0
  132                 0         0               0               0         0               0               0         0
  135               540        62             632             940         4             893             900         0
  143               530       112             491             585         0               0               0         0
  162               509        27             700             755         2             930             950         0
  164               700        39             634             940         1           1,150           1,150         0
  166               430        12             465             485        42             564             590        36
  167               601        57             654             733         2             928             980         0
  182                 0        28             525             535         4             615             615         0


CONTROL     AVG. RENT       MAX. RENT    # OF COMMERCIAL        AVG. RENT             MAX. RENT                 TOTAL
  NO.    4 BEDROOMS ($)  4 BEDROOMS ($)       UNITS       COMMERCIAL UNITS ($)  COMMERCIAL UNITS ($)  ELEVATOR  UNITS
---------------------------------------------------------------------------------------------------------------------

   11                 0               0                0                     0                     0  N/A       1,649
  11A1                0               0                0                     0                     0  N/A         211
  11A2                0               0                0                     0                     0  N/A         238
  11A3                0               0                0                     0                     0  N/A         161
  11A4                0               0                0                     0                     0  N/A         227
  11A5                0               0                0                     0                     0  N/A         194
  11A6                0               0                0                     0                     0  N/A         150
  11A7                0               0                0                     0                     0  N/A         233
  11A8                0               0                0                     0                     0  N/A          92
  11A9                0               0                0                     0                     0  N/A          60
 11A10                0               0                0                     0                     0  N/A          83
   15                 0               0                0                     0                     0  N/A         644
   18                 0               0                0                     0                     0  N/A         338
   20                 0               0                0                     0                     0  N/A       1,150
  20A1                0               0                0                     0                     0  N/A         612
  20A2                0               0                0                     0                     0  N/A         343
  20A3                0               0                0                     0                     0  N/A         195
   21                 0               0                0                     0                     0  N/A         293
   26                 0               0                0                     0                     0  N/A         336
   31                 0               0                0                     0                     0  N/A         202
   32                 0               0                0                     0                     0  N/A         216
   33                 0               0                0                     0                     0  N/A         320
   38                 0               0                0                     0                     0  N/A         252
   39                 0               0                0                     0                     0  N/A         432
   42                 0               0                0                     0                     0  N/A         216
   43                 0               0                0                     0                     0  N/A         336
   47                 0               0                0                     0                     0  N/A         200
   48                 0               0                0                     0                     0  N/A         279
   51                 0               0                0                     0                     0  N/A         408
   62                 0               0                0                     0                     0  N/A         172
   63                 0               0                0                     0                     0  N/A         629
  63A1                0               0                0                     0                     0  N/A         260
  63A2                0               0                0                     0                     0  N/A         212
  63A3                0               0                0                     0                     0  N/A          94
  63A4                0               0                0                     0                     0  N/A          63
   66                 0               0                0                     0                     0  N/A         287
   68                 0               0                3                 4,955                 8,750  Yes          62
   78                 0               0                0                     0                     0  N/A         121
   79                 0               0                0                     0                     0  N/A         105
   80                 0               0                0                     0                     0  N/A         184
   82                 0               0                0                     0                     0  N/A         111
   83                 0               0                0                     0                     0  N/A         172
   87                 0               0                0                     0                     0  N/A         198
   91                 0               0                0                     0                     0  N/A         132
   92                 0               0                0                     0                     0  N/A         176
  92A1                0               0                0                     0                     0  N/A          92
  92A2              493             510                0                     0                     0  N/A          84
   94                 0               0                0                     0                     0  N/A         232
  101                 0               0                0                     0                     0  N/A          92
 101A1                0               0                0                     0                     0  N/A          30
 101A2                0               0                0                     0                     0  N/A           8
 101A3                0               0                0                     0                     0  N/A           9
 101A4                0               0                0                     0                     0  N/A           7
 101A5                0               0                0                     0                     0  N/A           7
 101A6                0               0                0                     0                     0  N/A           5
 101A7                0               0                0                     0                     0  N/A           5
 101A8                0               0                0                     0                     0  N/A           6
 101A9                0               0                0                     0                     0  N/A           6
 101A10               0               0                0                     0                     0  N/A           5
 101A11               0               0                0                     0                     0  N/A           4
  105                 0               0                0                     0                     0  N/A         160
  110                 0               0                0                     0                     0  N/A         120
  111                 0               0                0                     0                     0  N/A         198
  115             1,025           1,025                0                     0                     0  Yes          88
 115A1            1,025           1,025                0                     0                     0  Yes          42
 115A2                0               0                0                     0                     0  Yes          21
 115A3                0               0                0                     0                     0  Yes          25
  120                 0               0                0                     0                     0  Yes          25
  125                 0               0                0                     0                     0  Yes          79
 125A1                0               0                0                     0                     0  Yes          50
 125A2                0               0                0                     0                     0  Yes          29
  132                 0               0                0                     0                     0  N/A         175
  135                 0               0                0                     0                     0  N/A         185
  143                 0               0                0                     0                     0  N/A         200
  162                 0               0                0                     0                     0  N/A         109
  164                 0               0                0                     0                     0  N/A         117
  166               659             750                0                     0                     0  N/A         102
  167                 0               0                0                     0                     0  N/A          93
  182                 0               0                0                     0                     0  N/A          32

Annex B Footnotes

(1)    Saddle Vineyard Apartments Included in the number of total units are ten, 5 bedroom units with a minimum, maximum and average rental rate of $690, $740 and $700, respectfully. Additionally there are two 6 bedroom units with a minimum, maximum and average rental rate of $750. 




                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

ANNEX C-1

PRICE/YIELD TABLES





   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-1 CERTIFICATES



                           0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR
                -------------------------------------------------------------------------------------------
PRICE (32NDS)         0% CPR             25% CPR             50% CPR             75% CPR           100% CPR
-------------   ----------------   ----------------   ----------------   ----------------  -----------------
                 CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified   CBE    Modified
                Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration  Yield   Duration
                 (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)   (%)     (Years)
                ------  --------   ------  --------   ------  --------   ------  --------  ------  --------

     99-12      5.539%    2.81     5.542%    2.77     5.542%    2.76     5.542%    2.76    5.542%    2.76
     99-16      5.494%    2.81     5.496%    2.77     5.497%    2.77     5.497%    2.77    5.497%    2.77
     99-20      5.450%    2.81     5.451%    2.77     5.451%    2.77     5.451%    2.77    5.451%    2.77
     99-24      5.405%    2.81     5.406%    2.77     5.406%    2.77     5.406%    2.77    5.406%    2.77
     99-28      5.361%    2.82     5.361%    2.78     5.361%    2.77     5.361%    2.77    5.361%    2.77
    100-00      5.317%    2.82     5.316%    2.78     5.316%    2.77     5.316%    2.77    5.316%    2.77
    100-04      5.272%    2.82     5.271%    2.78     5.271%    2.77     5.271%    2.77    5.271%    2.77
    100-08      5.228%    2.82     5.227%    2.78     5.226%    2.77     5.226%    2.77    5.226%    2.77
    100-12      5.184%    2.82     5.182%    2.78     5.182%    2.78     5.182%    2.78    5.182%    2.78
    100-16      5.140%    2.82     5.137%    2.78     5.137%    2.78     5.137%    2.78    5.137%    2.78
    100-20      5.096%    2.82     5.093%    2.78     5.092%    2.78     5.092%    2.78    5.092%    2.78
WEIGHTED
AVERAGE LIFE
(YRS.)                3.19               3.14                3.13              3.13              3.13
FIRST
PRINCIPAL
PAYMENT DATE       12/15/2006         12/15/2006         12/15/2006         12/15/2006         12/15/2006
LAST
PRINCIPAL
PAYMENT DATE        8/15/2011          5/15/2011          4/15/2011          4/15/2011          4/15/2011




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-2 CERTIFICATES



                          0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR
                --------------------------------------------------------------------------------------------
PRICE (32NDS)         0% CPR            25% CPR            50% CPR           75% CPR            100% CPR
-------------   ----------------   ----------------   ----------------   ----------------   ----------------
                 CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                 (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)
                ------  --------   ------  --------   ------  --------   ------  --------   -----  ---------

     99-12      5.494%    4.19     5.494%    4.18     5.495%    4.16     5.496%    4.14     5.501%    3.97
     99-16      5.464%    4.19     5.464%    4.18     5.465%    4.16     5.465%    4.14     5.470%    3.97
     99-20      5.434%    4.19     5.434%    4.18     5.435%    4.16     5.435%    4.14     5.438%    3.97
     99-24      5.404%    4.19     5.404%    4.18     5.405%    4.16     5.405%    4.14     5.407%    3.97
     99-28      5.375%    4.19     5.375%    4.18     5.375%    4.17     5.375%    4.14     5.375%    3.97
    100-00      5.345%    4.20     5.345%    4.18     5.345%    4.17     5.345%    4.14     5.344%    3.98
    100-04      5.315%    4.20     5.315%    4.19     5.315%    4.17     5.315%    4.14     5.313%    3.98
    100-08      5.286%    4.20     5.285%    4.19     5.285%    4.17     5.285%    4.14     5.281%    3.98
    100-12      5.256%    4.20     5.256%    4.19     5.255%    4.17     5.255%    4.14     5.250%    3.98
    100-16      5.226%    4.20     5.226%    4.19     5.226%    4.17     5.225%    4.15     5.219%    3.98
    100-20      5.197%    4.20     5.196%    4.19     5.196%    4.17     5.195%    4.15     5.188%    3.98
WEIGHTED
AVERAGE LIFE
(YRS.)                4.89               4.88               4.85                4.82             4.60
FIRST
PRINCIPAL
PAYMENT DATE       8/15/2011           5/15/2011          4/15/2011         4/15/2011          4/15/2011
LAST
PRINCIPAL
PAYMENT DATE       11/15/2011         11/15/2011         11/15/2011         11/15/2011         10/15/2011




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-AB CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



                         0% CPR             25% CPR           50% CPR             75% CPR           100% CPR
                   ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
PRICE (32NDS)       (%)     (Years)    (%)     (Years)    (%)    (Years)     (%)     (Years)    (%)     (Years)
----------------   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

     99-12         5.475%    5.74     5.477%     5.62    5.478%    5.54     5.479%     5.50    5.480%     5.44
     99-16         5.453%    5.74     5.455%     5.62    5.456%    5.54     5.456%     5.50    5.457%     5.44
     99-20         5.431%    5.74     5.432%     5.62    5.433%    5.55     5.434%     5.50    5.434%     5.44
     99-24         5.409%    5.74     5.410%     5.62    5.411%    5.55     5.411%     5.50    5.411%     5.45
     99-28         5.388%    5.74     5.388%     5.62    5.388%    5.55     5.388%     5.50    5.388%     5.45
    100-00         5.366%    5.75     5.366%     5.62    5.366%    5.55     5.366%     5.50    5.365%     5.45
    100-04         5.344%    5.75     5.344%     5.63    5.343%    5.55     5.343%     5.51    5.343%     5.45
    100-08         5.323%    5.75     5.322%     5.63    5.321%    5.55     5.320%     5.51    5.320%     5.45
    100-12         5.301%    5.75     5.299%     5.63    5.298%    5.56     5.298%     5.51    5.297%     5.45
    100-16         5.280%    5.75     5.277%     5.63    5.276%    5.56     5.275%     5.51    5.274%     5.46
    100-20         5.258%    5.75     5.255%     5.63    5.254%    5.56     5.253%     5.51    5.252%     5.46
WEIGHTED AVERAGE
LIFE (YRS.)              7.12               6.93              6.82               6.76               6.68
FIRST PRINCIPAL
PAYMENT DATE          11/15/2011         11/15/2011        11/15/2011         11/15/2011         10/15/2011
LAST PRINCIPAL
PAYMENT DATE          12/15/2015          9/15/2015         8/15/2015          8/15/2015          8/15/2015




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-3 CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



                         0% CPR             25% CPR            50% CPR            75% CPR           100% CPR
                   -----------------   ----------------   ----------------   ----------------   ----------------
                     CBE    Modified     CBE   Modified     CBE   Modified     CBE   Modified     CBE   Modified
                    Yield   Duration    Yield  Duration    Yield  Duration    Yield  Duration    Yield  Duration
PRICE (32NDS)        (%)     (Years)     (%)    (Years)     (%)    (Years)     (%)    (Years)     (%)    (Years)
----------------   ------   --------   ------  --------   ------  --------   ------  --------   -----   --------

     99-12         5.483%     7.40     5.483%    7.38     5.484%    7.36     5.484%    7.34     5.485%    7.22
     99-16         5.466%     7.40     5.466%    7.38     5.467%    7.37     5.467%    7.34     5.468%    7.23
     99-20         5.449%     7.40     5.450%    7.39     5.450%    7.37     5.450%    7.34     5.450%    7.23
     99-24         5.433%     7.40     5.433%    7.39     5.433%    7.37     5.433%    7.34     5.433%    7.23
     99-28         5.416%     7.41     5.416%    7.39     5.416%    7.37     5.416%    7.34     5.416%    7.23
    100-00         5.399%     7.41     5.399%    7.39     5.399%    7.37     5.399%    7.35     5.399%    7.23
    100-04         5.382%     7.41     5.382%    7.40     5.382%    7.38     5.382%    7.35     5.381%    7.24
    100-08         5.365%     7.41     5.365%    7.40     5.365%    7.38     5.365%    7.35     5.364%    7.24
    100-12         5.349%     7.42     5.348%    7.40     5.348%    7.38     5.348%    7.35     5.347%    7.24
    100-16         5.332%     7.42     5.332%    7.40     5.331%    7.38     5.331%    7.35     5.330%    7.24
    100-20         5.315%     7.42     5.315%    7.40     5.315%    7.38     5.314%    7.36     5.313%    7.24
WEIGHTED AVERAGE
LIFE (YRS.)              9.77               9.74              9.71               9.66              9.47
FIRST PRINCIPAL
PAYMENT DATE          12/15/2015          9/15/2015        8/15/2015           8/15/2015         8/15/2015
LAST PRINCIPAL
PAYMENT DATE          10/15/2016         10/15/2016        10/15/2016         10/15/2016         7/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
                                     DATE,
   PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-1A CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



  PRICE (32NDS)         0% CPR             25% CPR            50% CPR            75% CPR           100% CPR
----------------   ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)
                   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

      99-12        5.482%    6.49     5.482%    6.48     5.482%    6.48     5.482%    6.47     5.484%    6.35
      99-16        5.462%    6.49     5.462%    6.48     5.463%    6.48     5.463%    6.47     5.464%    6.36
      99-20        5.443%    6.49     5.443%    6.49     5.443%    6.48     5.443%    6.47     5.444%    6.36
      99-24        5.424%    6.49     5.424%    6.49     5.424%    6.48     5.424%    6.48     5.425%    6.36
      99-28        5.405%    6.50     5.405%    6.49     5.405%    6.49     5.405%    6.48     5.405%    6.36
     100-00        5.386%    6.50     5.386%    6.49     5.386%    6.49     5.385%    6.48     5.385%    6.37
     100-04        5.366%    6.50     5.366%    6.50     5.366%    6.49     5.366%    6.48     5.366%    6.37
     100-08        5.347%    6.50     5.347%    6.50     5.347%    6.49     5.347%    6.49     5.346%    6.37
     100-12        5.328%    6.51     5.328%    6.50     5.328%    6.50     5.328%    6.49     5.327%    6.37
     100-16        5.309%    6.51     5.309%    6.50     5.309%    6.50     5.309%    6.49     5.307%    6.38
     100-20        5.290%    6.51     5.290%    6.51     5.290%    6.50     5.290%    6.49     5.288%    6.38

WEIGHTED AVERAGE
LIFE (YRS.)              8.39               8.38               8.37               8.36               8.17
FIRST PRINCIPAL
PAYMENT DATE          12/15/2006         12/15/2006         12/15/2006         12/15/2006         12/15/2006
LAST PRINCIPAL
PAYMENT DATE          10/15/2016         10/15/2016         10/15/2016         10/15/2016          7/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
                                      DATE,
    PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-M CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



  PRICE (32NDS)         0% CPR             25% CPR            50% CPR            75% CPR           100% CPR
----------------   ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)
                   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

      99-12        5.515%    7.44     5.515%    7.44     5.515%    7.44     5.515%     7.44    5.516%    7.30
      99-16        5.498%    7.44     5.498%    7.44     5.498%    7.44     5.498%     7.44    5.499%    7.30
      99-20        5.481%    7.44     5.481%    7.44     5.481%    7.44     5.481%     7.44    5.482%    7.30
      99-24        5.464%    7.45     5.464%    7.45     5.464%    7.45     5.464%     7.45    5.465%    7.30
      99-28        5.447%    7.45     5.447%    7.45     5.447%    7.45     5.447%     7.45    5.447%    7.30
     100-00        5.431%    7.45     5.431%    7.45     5.431%    7.45     5.431%     7.45    5.430%    7.31
     100-04        5.414%    7.45     5.414%    7.45     5.414%    7.45     5.414%     7.45    5.413%    7.31
     100-08        5.397%    7.45     5.397%    7.45     5.397%    7.45     5.397%     7.45    5.396%    7.31
     100-12        5.381%    7.46     5.381%    7.46     5.381%    7.46     5.381%     7.46    5.379%    7.31
     100-16        5.364%    7.46     5.364%    7.46     5.364%    7.46     5.364%     7.46    5.362%    7.31
     100-20        5.347%    7.46     5.347%    7.46     5.347%    7.46     5.347%     7.46    5.346%    7.32

WEIGHTED AVERAGE
LIFE (YRS.)              9.86               9.86               9.86               9.86               9.61
FIRST PRINCIPAL
PAYMENT DATE          10/15/2016         10/15/2016         10/15/2016         10/15/2016         7/15/2016
LAST PRINCIPAL
PAYMENT DATE          10/15/2016         10/15/2016         10/15/2016         10/15/2016         8/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS A-J CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



PRICE (32NDS)         0% CPR             25% CPR             50% CPR             75% CPR             100% CPR
-------------   -----------------   -----------------   -----------------   -----------------   -----------------
                 CBE     Modified    CBE     Modified    CBE     Modified    CBE     Modified    CBE     Modified
                Yield    Duration   Yield    Duration   Yield    Duration   Yield    Duration   Yield    Duration
                 (%)      (Years)    (%)     (Years)     (%)     (Years)     (%)     (Years)     (%)     (Years)
                ------   --------   ------   --------   ------   --------   ------   --------   ------   --------

      99-12     5.544%     7.44     5.544%     7.44     5.544%     7.43     5.544%     7.43     5.545%     7.34
      99-16     5.527%     7.44     5.527%     7.44     5.527%     7.44     5.527%     7.43     5.528%     7.34
      99-20     5.510%     7.45     5.510%     7.44     5.510%     7.44     5.511%     7.43     5.511%     7.35
      99-24     5.494%     7.45     5.494%     7.45     5.494%     7.44     5.494%     7.44     5.494%     7.35
      99-28     5.477%     7.45     5.477%     7.45     5.477%     7.44     5.477%     7.44     5.477%     7.35
     100-00     5.460%     7.45     5.460%     7.45     5.460%     7.45     5.460%     7.44     5.460%     7.35
     100-04     5.444%     7.46     5.444%     7.45     5.443%     7.45     5.443%     7.44     5.443%     7.36
     100-08     5.427%     7.46     5.427%     7.45     5.427%     7.45     5.427%     7.44     5.426%     7.36
     100-12     5.410%     7.46     5.410%     7.46     5.410%     7.45     5.410%     7.45     5.409%     7.36
     100-16     5.394%     7.46     5.394%     7.46     5.394%     7.46     5.393%     7.45     5.393%     7.36
     100-20     5.377%     7.46     5.377%     7.46     5.377%     7.46     5.377%     7.45     5.376%     7.36
WEIGHTED AVERAGE
LIFE (YRS.)            9.89                9.88                9.87                9.86                9.71
FIRST PRINCIPAL
PAYMENT DATE        10/15/2016          10/15/2016          10/15/2016          10/15/2016          8/15/2016
LAST PRINCIPAL
PAYMENT DATE        11/15/2016          11/15/2016          11/15/2016          11/15/2016          9/15/2016




  WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS B CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



PRICE (32NDS)         0% CPR             25% CPR             50% CPR             75% CPR                100% CPR
-------------   -----------------   -----------------   -----------------   -----------------   -----------------------
                 CBE     Modified    CBE     Modified    CBE     Modified    CBE     Modified          CBE     Modified
                Yield    Duration   Yield    Duration   Yield    Duration   Yield    Duration         Yield    Duration
                 (%)     (Years)     (%)     (Years)     (%)     (Years)     (%)     (Years)           (%)     (Years)
                ------   --------   ------   --------   ------   --------   ------   --------   ---   ------   --------

 99-12          5.585%     7.46     5.585%     7.46     5.585%     7.46     5.585%     7.46     5.6   5.586%     7.37
 99-16          5.568%     7.46     5.568%     7.46     5.568%     7.46     5.568%     7.46     5.6   5.569%     7.37
 99-20          5.551%     7.47     5.551%     7.47     5.551%     7.47     5.551%     7.47     5.6   5.552%     7.37
 99-24          5.534%     7.47     5.534%     7.47     5.534%     7.47     5.534%     7.47     5.5   5.535%     7.37
 99-28          5.518%     7.47     5.518%     7.47     5.518%     7.47     5.518%     7.47     5.5   5.518%     7.37
100-00          5.501%     7.47     5.501%     7.47     5.501%     7.47     5.501%     7.47     5.5   5.501%     7.38
100-04          5.484%     7.47     5.484%     7.47     5.484%     7.47     5.484%     7.47     5.5   5.484%     7.38
100-08          5.468%     7.48     5.468%     7.48     5.468%     7.48     5.468%     7.48     5.5   5.467%     7.38
100-12          5.451%     7.48     5.451%     7.48     5.451%     7.48     5.451%     7.48     5.5   5.450%     7.38
100-16          5.435%     7.48     5.435%     7.48     5.435%     7.48     5.435%     7.48     5.4   5.434%     7.39
100-20          5.418%     7.48     5.418%     7.48     5.418%     7.48     5.418%     7.48     5.4   5.417%     7.39
WEIGHTED AVERAGE
LIFE (YRS.)            9.94                9.94                9.94                9.94                   9.78
FIRST PRINCIPAL
PAYMENT DATE        11/15/2016          11/15/2016          11/15/2016          11/15/2016             9/15/2016
LAST PRINCIPAL
PAYMENT DATE        11/15/2016          11/15/2016          11/15/2016          11/15/2016             9/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
  DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS C CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



  PRICE (32NDS)         0% CPR             25% CPR              50% CPR             75% CPR             100% CPR
----------------   -----------------   -----------------   -----------------   -----------------   -----------------
                     CBE    Modified    CBE     Modified    CBE     Modified    CBE     Modified    CBE     Modified
                    Yield   Duration   Yield    Duration   Yield    Duration   Yield    Duration   Yield    Duration
                     (%)     (Years)    (%)     (Years)     (%)      (Years)    (%)      (Years)    (%)      (Years)
                   ------   --------   ------   --------   ------   --------   ------   --------   ------   --------

        99-12      5.616%     7.45     5.616%     7.45     5.616%     7.45     5.616%     7.45     5.616%     7.35
        99-16      5.599%     7.45     5.599%     7.45     5.599%     7.45     5.599%     7.45     5.599%     7.36
        99-20      5.582%     7.45     5.582%     7.45     5.582%     7.45     5.582%     7.45     5.582%     7.36
        99-24      5.565%     7.46     5.565%     7.46     5.565%     7.46     5.565%     7.46     5.565%     7.36
        99-28      5.548%     7.46     5.548%     7.46     5.548%     7.46     5.548%     7.46     5.549%     7.36
       100-00      5.532%     7.46     5.532%     7.46     5.532%     7.46     5.532%     7.46     5.532%     7.37
       100-04      5.515%     7.46     5.515%     7.46     5.515%     7.46     5.515%     7.46     5.515%     7.37
       100-08      5.498%     7.47     5.498%     7.47     5.498%     7.47     5.498%     7.47     5.498%     7.37
       100-12      5.482%     7.47     5.482%     7.47     5.482%     7.47     5.482%     7.47     5.481%     7.37
       100-16      5.465%     7.47     5.465%     7.47     5.465%     7.47     5.465%     7.47     5.464%     7.38
       100-20      5.449%     7.47     5.449%     7.47     5.449%     7.47     5.449%     7.47     5.447%     7.38
WEIGHTED AVERAGE
LIFE (YRS.)              9.94               9.94                 9.94                9.94                9.78
FIRST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016           11/15/2016          11/15/2016          9/15/2016
LAST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016           11/15/2016          11/15/2016          9/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
  DATE, PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS D CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



  PRICE (32NDS)         0% CPR             25% CPR              50% CPR             75% CPR             100% CPR
----------------   -----------------   -----------------   -----------------   -----------------   -----------------
                     CBE    Modified     CBE    Modified     CBE    Modified     CBE    Modified     CBE    Modified
                    Yield   Duration    Yield   Duration    Yield   Duration    Yield   Duration    Yield   Duration
                     (%)     (Years)     (%)     (Years)     (%)     (Years)     (%)     (Years)     (%)     (Years)
                   ------   --------   ------   --------   ------   --------   ------   --------   ------   --------

        99-12      5.635%     7.44     5.635%     7.44     5.635%     7.44     5.635%     7.44     5.636%     7.35
        99-16      5.618%     7.44     5.618%     7.44     5.618%     7.44     5.618%     7.44     5.619%     7.35
        99-20      5.601%     7.45     5.601%     7.45     5.601%     7.45     5.601%     7.45     5.602%     7.35
        99-24      5.585%     7.45     5.585%     7.45     5.585%     7.45     5.585%     7.45     5.585%     7.35
        99-28      5.568%     7.45     5.568%     7.45     5.568%     7.45     5.568%     7.45     5.568%     7.36
       100-00      5.551%     7.45     5.551%     7.45     5.551%     7.45     5.551%     7.45     5.551%     7.36
       100-04      5.534%     7.46     5.534%     7.46     5.534%     7.46     5.534%     7.46     5.534%     7.36
       100-08      5.518%     7.46     5.518%     7.46     5.518%     7.46     5.518%     7.46     5.517%     7.36
       100-12      5.501%     7.46     5.501%     7.46     5.501%     7.46     5.501%     7.46     5.500%     7.37
       100-16      5.484%     7.46     5.484%     7.46     5.484%     7.46     5.484%     7.46     5.484%     7.37
       100-20      5.468%     7.46     5.468%     7.46     5.468%     7.46     5.468%     7.46     5.467%     7.37
WEIGHTED AVERAGE
LIFE (YRS.)              9.94               9.94                 9.94                9.94                9.78
FIRST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016           11/15/2016          11/15/2016          9/15/2016
LAST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016           11/15/2016          11/15/2016          9/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
                                      DATE,
     PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS E CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



PRICE (32NDS)             0% CPR            25% CPR            50% CPR            75% CPR            100% CPR
-------------      ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                    (%)     (Years)    (%)    (Years)     (%)     (Years)    (%)     (Years)    (%)    (Years)
                   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

     99-12         5.655%    7.43     5.655%    7.43     5.655%    7.43     5.655%    7.43     5.656%    7.34
     99-16         5.639%    7.44     5.639%    7.44     5.639%    7.44     5.639%    7.44     5.639%    7.34
     99-20         5.622%    7.44     5.622%    7.44     5.622%    7.44     5.622%    7.44     5.622%    7.35
     99-24         5.605%    7.44     5.605%    7.44     5.605%    7.44     5.605%    7.44     5.605%    7.35
     99-28         5.588%    7.44     5.588%    7.44     5.588%    7.44     5.588%    7.44     5.588%    7.35
    100-00         5.572%    7.45     5.572%    7.45     5.572%    7.45     5.572%    7.45     5.571%    7.35
    100-04         5.555%    7.45     5.555%    7.45     5.555%    7.45     5.555%    7.45     5.555%    7.35
    100-08         5.538%    7.45     5.538%    7.45     5.538%    7.45     5.538%    7.45     5.538%    7.36
    100-12         5.521%    7.45     5.521%    7.45     5.521%    7.45     5.521%    7.45     5.521%    7.36
    100-16         5.505%    7.46     5.505%    7.46     5.505%    7.46     5.505%    7.46     5.504%    7.36
    100-20         5.488%    7.46     5.488%    7.46     5.488%    7.46     5.488%    7.46     5.487%    7.36
WEIGHTED AVERAGE
LIFE (YRS.)               9.94               9.94               9.94               9.94               9.78
FIRST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016          11/15/2016         11/15/2016          9/15/2016
LAST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016          11/15/2016         11/15/2016          9/15/2016




   WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT DATE, LAST PRINCIPAL PAYMENT
                                      DATE,
     PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS F CERTIFICATES

    0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



PRICE (32NDS)            0% CPR            25% CPR            50% CPR            75% CPR           100% CPR
-------------      ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)
                   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

     99-12         5.686%    7.42     5.686%    7.42     5.686%    7.42     5.686%    7.42     5.687%    7.33
     99-16         5.669%    7.43     5.669%    7.43     5.669%    7.43     5.669%    7.43     5.670%    7.33
     99-20         5.653%    7.43     5.653%    7.43     5.653%    7.43     5.653%    7.43     5.653%    7.33
     99-24         5.636%    7.43     5.636%    7.43     5.636%    7.43     5.636%    7.43     5.636%    7.34
     99-28         5.619%    7.43     5.619%    7.43     5.619%    7.43     5.619%    7.43     5.619%    7.34
    100-00         5.602%    7.43     5.602%    7.43     5.602%    7.43     5.602%    7.43     5.602%    7.34
    100-04         5.585%    7.44     5.585%    7.44     5.585%    7.44     5.585%    7.44     5.585%    7.34
    100-08         5.569%    7.44     5.569%    7.44     5.569%    7.44     5.569%    7.44     5.568%    7.35
    100-12         5.552%    7.44     5.552%    7.44     5.552%    7.44     5.552%    7.44     5.551%    7.35
    100-16         5.535%    7.44     5.535%    7.44     5.535%    7.44     5.535%    7.44     5.534%    7.35
    100-20         5.519%    7.45     5.519%    7.45     5.519%    7.45     5.519%    7.45     5.518%    7.35
WEIGHTED AVERAGE
LIFE (YRS.)              9.94               9.94               9.94               9.94               9.78
FIRST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016         11/15/2016          11/15/2016         9/15/2016
LAST PRINCIPAL
PAYMENT DATE          11/15/2016         11/15/2016         11/15/2016          11/15/2016         9/15/2016




   PRE-TAX YIELD TO MATURITY AND MODIFIED DURATION OF CLASS X-CP CERTIFICATES

   0% CPR DURING LOP, YMP, OR DECLINING PREMIUM - OTHERWISE AT INDICATED CPR



PRICE (32NDS)            0% CPR            25% CPR            50% CPR            75% CPR           100% CPR
-------------      ----------------   ----------------   ----------------   ----------------   ----------------
                    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified    CBE    Modified
                   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration   Yield   Duration
                    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)     (Years)    (%)    (Years)
                   -----   --------   -----   --------   -----   --------   -----   --------   -----   --------

      3-11         7.124%    2.62     7.124%    2.62     7.124%    2.62     7.124%    2.62     7.124%    2.62
      3-12         6.775%    2.64     6.775%    2.64     6.775%    2.64     6.775%    2.64     6.775%    2.64
      3-13         6.431%    2.65     6.431%    2.65     6.431%    2.65     6.431%    2.65     6.431%    2.65
      3-14         6.093%    2.67     6.093%    2.67     6.093%    2.67     6.093%    2.67     6.093%    2.67
      3-15         5.759%    2.68     5.759%    2.68     5.759%    2.68     5.759%    2.68     5.759%    2.68
      3-16         5.430%    2.70     5.430%    2.70     5.430%    2.70     5.430%    2.70     5.430%    2.70
      3-17         5.106%    2.71     5.106%    2.71     5.106%    2.71     5.106%    2.71     5.106%    2.71
      3-18         4.787%    2.73     4.787%    2.73     4.787%    2.73     4.787%    2.73     4.787%    2.73
      3-19         4.472%    2.74     4.472%    2.74     4.472%    2.74     4.472%    2.74     4.472%    2.74
      3-20         4.161%    2.76     4.161%    2.76     4.161%    2.76     4.161%    2.76     4.161%    2.76
      3-21         3.855%    2.77     3.855%    2.77     3.855%    2.77     3.855%    2.77     3.855%    2.77







                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

ANNEX C-2

DECREMENT TABLES





  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-1 CERTIFICATES



                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                 OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage.................     100%     100%      100%      100%       100%
November 2007......................      90       90        90        90         90
November 2008......................      79       79        79        79         79
November 2009......................      65       65        65        65         65
November 2010......................      36       36        36        36         36
November 2011 and thereafter.......       0        0         0         0          0
Weighted Average Life (in years)...    3.19     3.14      3.13      3.13       3.13






  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-2 CERTIFICATES

                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                 OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage ................     100%     100%      100%      100%       100%
November 2007 .....................     100      100       100       100        100
November 2008 .....................     100      100       100       100        100
November 2009 .....................     100      100       100       100        100
November 2010 .....................     100      100       100       100        100
November 2011 and thereafter ......       0        0         0         0          0
Weighted Average Life (in years)...    4.89     4.88      4.85      4.82       4.60




  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-AB CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................      99       98        98        96         88
November 2012.....................      79       76        73        70         68
November 2013.....................      54       49        45        43         43
November 2014.....................      29       23        20        19         18
November 2015.....................       3        0         0         0          0
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    7.12     6.93      6.82      6.76       6.68




  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-3 CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................     100      100       100       100        100
November 2012.....................     100      100       100       100        100
November 2013.....................     100      100       100       100        100
November 2014.....................     100      100       100       100        100
November 2015.....................     100      100        99        99         97
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    9.77     9.74      9.71      9.66       9.47




  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-1A CERTIFICATES



                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                               OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage.................     100%      100%      100%      100%       100%
November 2007......................     100       100       100       100        100
November 2008......................     100       100       100       100        100
November 2009......................      99        99        99        99         99
November 2010......................      99        99        99        99         99
November 2011......................      76        76        76        76         76
November 2012......................      75        75        75        75         75
November 2013......................      71        71        71        71         71
November 2014......................      70        70        70        70         70
November 2015......................      69        69        69        69         69
November 2016 and thereafter.......       0         0         0         0          0
Weighted Average Life (in years)...    8.39      8.38      8.37      8.36       8.17




  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-M CERTIFICATES



                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage.................     100%      100%      100%      100%       100%
November 2007......................     100       100       100       100        100
November 2008......................     100       100       100       100        100
November 2009......................     100       100       100       100        100
November 2010......................     100       100       100       100        100
November 2011......................     100       100       100       100        100
November 2012......................     100       100       100       100        100
November 2013......................     100       100       100       100        100
November 2014......................     100       100       100       100        100
November 2015......................     100       100       100       100        100
November 2016 and thereafter.......       0         0         0         0          0
Weighted Average Life (in years)...    9.86      9.86      9.86      9.86       9.61




  PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-J CERTIFICATES



                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                 OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage ................    100%      100%      100%      100%       100%
November 2007 .....................    100       100       100       100        100
November 2008 .....................    100       100       100       100        100
November 2009 .....................    100       100       100       100        100
November 2010 .....................    100       100       100       100        100
November 2011 .....................    100       100       100       100        100
November 2012 .....................    100       100       100       100        100
November 2013 .....................    100       100       100       100        100
November 2014 .....................    100       100       100       100        100
November 2015 .....................    100       100       100       100        100
November 2016 and thereafter ......      0         0         0         0          0
Weighted Average Life (in years)...    9.89      9.88      9.87      9.86      9.71




   PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES



                                       0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                 OTHERWISE AT INDICATED CPR
                                      -----------------------------------------------
DISTRIBUTION DATE                     0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
-----------------------------------   ------   -------   -------   -------   --------

Initial Percentage ................    100%      100%      100%      100%       100%
November 2007 .....................    100       100       100       100        100
November 2008 .....................    100       100       100       100        100
November 2009 .....................    100       100       100       100        100
November 2010 .....................    100       100       100       100        100
November 2011 .....................    100       100       100       100        100
November 2012 .....................    100       100       100       100        100
November 2013 .....................    100       100       100       100        100
November 2014 .....................    100       100       100       100        100
November 2015 .....................    100       100       100       100        100
November 2016 and thereafter ......      0         0         0         0          0
Weighted Average Life (in years)...    9.94      9.94      9.94      9.94      9.78




   PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS C CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................     100      100       100       100        100
November 2012.....................     100      100       100       100        100
November 2013.....................     100      100       100       100        100
November 2014.....................     100      100       100       100        100
November 2015.....................     100      100       100       100        100
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    9.94     9.94      9.94      9.94       9.78




   PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS D CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................     100      100       100       100        100
November 2012.....................     100      100       100       100        100
November 2013.....................     100      100       100       100        100
November 2014.....................     100      100       100       100        100
November 2015.....................     100      100       100       100        100
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    9.94     9.94      9.94      9.94       9.78




   PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS E CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................     100      100       100       100        100
November 2012.....................     100      100       100       100        100
November 2013.....................     100      100       100       100        100
November 2014.....................     100      100       100       100        100
November 2015.....................     100      100       100       100        100
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    9.94     9.94      9.94      9.94       9.78




   PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS F CERTIFICATES



                                      0% CPR DURING LOP, YMP OR DECLINING PREMIUM -
                                                OTHERWISE AT INDICATED CPR
                                     -----------------------------------------------
DISTRIBUTION DATE                    0% CPR   25% CPR   50% CPR   75% CPR   100% CPR
----------------------------------   ------   -------   -------   -------   --------

Initial Percentage................     100%     100%      100%      100%       100%
November 2007.....................     100      100       100       100        100
November 2008.....................     100      100       100       100        100
November 2009.....................     100      100       100       100        100
November 2010.....................     100      100       100       100        100
November 2011.....................     100      100       100       100        100
November 2012.....................     100      100       100       100        100
November 2013.....................     100      100       100       100        100
November 2014.....................     100      100       100       100        100
November 2015.....................     100      100       100       100        100
November 2016 and thereafter......       0        0         0         0          0
Weighted Average Life (in years)..    9.94     9.94      9.94      9.94       9.78

ANNEX D

 FORM OF DISTRIBUTION DATE STATEMENT 







                      [THIS PAGE INTENTIONALLY LEFT BLANK.]















                                    ANNEX D

                       FORM OF DISTRIBUTION DATE STATEMENT






[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
135 S. LaSalle Street, Suite 1625                                      Next Payment: 18-Jan-07
Chicago, IL 60603                                                      Record Date: 05-Dec-06
USA

Administrator:                              ABN AMRO ACCT:             Analyst:
Kathryn Hawkinson 312.904.6561   REPORTING PACKAGE TABLE OF CONTENTS   Patrick Gong 714.259.6253
kathryn.hawkinson@abnamro.com                                          patrick.gong@abnamro.com


Issue Id:                        LUBS06C7

Monthly Data File
Name:               LUBS06C7_200612_3.ZIP

                                                          Page(s)
                                                         ---------
Statements to Certificateholders                         Page 2
Cash Recon                                               Page 3
Bond Interest Reconciliation                             Page 4
Bond Interest Reconciliation                             Page 5
Shortfall Summary Report                                 Page 6
Asset-Backed Facts ~ 15 Month Loan Status Summary        Page 7
Asset-Backed Facts ~ 15 Month Loan Payoff/Loss Summary   Page 8
Mortgage Loan Characteristics                            Page 9-11
Delinquent Loan Detail                                   Page 12
Loan Level Detail                                        Page 13
Realized Loss Detail                                     Page 14
Collateral Realized Loss                                 Page 15
Appraisal Reduction Detail                               Page 16
Material Breaches Detail                                 Page 17
Historical Collateral Prepayment                         Page 18
Specially Serviced (Part I) - Loan Detail                Page 19
Specially Serviced (Part II) - Servicer Comments         Page 20
Summary of Loan Maturity Extensions                      Page 21
Rating Information                                       Page 22
Other Related Information                                Page 23

Closing Date:

First Payment Date:         15-Dec-2006

Rated Final Payment Date:

Determination Date:

                             Trust Collection Period

                           PARTIES TO THE TRANSACTION

              Depositor: Structured Asset Securities Corporation II
              Master Servicer: Wachovia Bank, National Association
          Rating Agency: Fitch, Inc./Standard & Poor's Rating Services
                      Special Servicer: LNR Partners, Inc.
 Underwriter: CitiGroup Global Markets Inc./KeyBanc Capital Markets, a division
 of McDonald Investments Inc./Lehman Brothers Inc./UBS Global Asset Management
                                    (US) Inc.

       INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES

LaSalle Web Site      www.etrustee.net
Servicer Web Site     www.wachovia.com
LaSalle Factor Line   800.246.5761


                                                                    PAGE 1 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:



                                                                                                                  PASS-THROUGH
CLASS      ORIGINAL      OPENING   PRINCIPAL     PRINCIPAL      NEGATIVE     CLOSING     INTEREST     INTEREST        RATE
CUSIP   FACE VALUE (1)   BALANCE    PAYMENT    ADJ. OR LOSS   AMORTIZATION   BALANCE   PAYMENT (2)   ADJUSTMENT   Next Rate(3)
------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------------
Total
==============================================================================================================================


                                Total P&I Payment


                                                                    PAGE 2 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                           CASH RECONCILIATION SUMMARY

                                INTEREST SUMMARY

Current Scheduled Interest                 0.00
Less Deferred Interest                     0.00
Less PPIS Reducing Scheduled Int           0.00
Plus Gross Advance Interest                0.00
Less ASER Interest Adv Reduction           0.00
Less Other Interest Not Advanced           0.00
Less Other Adjustment                      0.00
-----------------------------------------------
Total                                      0.00
===============================================
UNSCHEDULED INTEREST:
Prepayment Penalties                       0.00
Yield Maintenance Penalties                0.00
Other Interest Proceeds                    0.00
-----------------------------------------------
Total                                      0.00
===============================================
Less Fee Paid To Servicer                  0.00
Less Fee Strips Paid by Servicer           0.00
LESS FEES & EXPENSES PAID BY/TO SERVICER
Special Servicing Fees                     0.00
Workout Fees                               0.00
Liquidation Fees                           0.00
Interest Due Serv on Advances              0.00
Non Recoverable Advances                   0.00
Misc. Fees & Expenses                      0.00
-----------------------------------------------
Total Unscheduled Fees & Expenses          0.00
===============================================
Total Interest Due Trust                   0.00
===============================================
LESS FEES & EXPENSES PAID BY/TO TRUST
Trustee Fee                                0.00
Fee Strips                                 0.00
Misc. Fees                                 0.00
Interest Reserve Withholding               0.00
Plus Interest Reserve Deposit              0.00
-----------------------------------------------
Total                                      0.00
===============================================

                                PRINCIPAL SUMMARY

SCHEDULED PRINCIPAL:
Current Scheduled Principal                0.00
Advanced Scheduled Principal               0.00
-----------------------------------------------
Scheduled Principal                        0.00
-----------------------------------------------
UNSCHEDULED PRINCIPAL:
Curtailments                               0.00
Prepayments in Full                        0.00
Liquidation Proceeds                       0.00
Repurchase Proceeds                        0.00
Other Principal Proceeds                   0.00
-----------------------------------------------
Total Unscheduled Principal                0.00
===============================================
Remittance Principal                       0.00
-----------------------------------------------
Remittance P&I Due Trust                   0.00
-----------------------------------------------
Remittance P&I Due Certs                   0.00
-----------------------------------------------

                              POOL BALANCE SUMMARY

                                           Balance   Count
----------------------------------------------------------
Beginning Pool                               0.00      0
Scheduled Principal                          0.00      0
Unscheduled Principal                        0.00      0
Deferred Interest                            0.00
Liquidations                                 0.00      0
Repurchases                                  0.00      0
----------------------------------------------------------
Ending Pool                                  0.00      0
----------------------------------------------------------

                            Servicing Advance Summary

                                           Amount
-------------------------------------------------
Prior Outstanding
Plus Current Period
Less Recovered
Less Non Recovered
Ending Outstanding

                              SERVICING FEE SUMMARY

Current Servicing Fees                     0.00
Plus Fees Advanced for PPIS                0.00
Less Reduction for PPIS                    0.00
Plus Delinquent Servicing Fees             0.00
-----------------------------------------------
Total Servicing Fees                       0.00
===============================================

                               CAP LEASE ACCRETION

Accretion Amt                              0.00
Distributable Interest                     0.00
Distributable Principal                    0.00

                                  PPIS SUMMARY

Gross PPIS                                 0.00
Reduced by PPIE                            0.00
Reduced by Shortfalls in Fees              0.00
Reduced by Other Amounts                   0.00
-----------------------------------------------
PPIS Reducing Scheduled Interest           0.00
-----------------------------------------------
PPIS Reducing Servicing Fee                0.00
-----------------------------------------------
PPIS Due Certificate                       0.00
-----------------------------------------------

                   ADVANCE SUMMARY (ADVANCE MADE BY SERVICER)

                                           Principal   Interest
---------------------------------------------------------------
Prior Outstanding                             0.00       0.00
Plus Current Period                           0.00       0.00
Less Recovered                                0.00       0.00
Less Non Recovered                            0.00       0.00
Ending Outstanding                            0.00       0.00


                                                                    PAGE 3 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                       BOND INTEREST RECONCILIATION DETAIL



                                                                                                           Current    Remaining
          Accrual                              Accrued      Total       Total    Distributable  Interest    Period   Outstanding
       -------------  Opening  Pass-Through  Certificate   Interest   Interest    Certificate    Payment  Shortfall    Interest
Class   Method  Days  Balance      Rate        Interest   Additions  Deductions     Interest     Amount    Recovery   Shorfalls
--------------------------------------------------------------------------------------------------------------------------------



              Credit
              Support
       ---------------------
Class  Original  Current (1)
-----  ---------------------




(1)  Determined as follows: (A) the ending balance of all the classes less (B)
     the sum of (i) the ending balance of the class and (ii) the ending balance
     of all classes which are not subordinate to the class divided by (A).


                                                                    PAGE 4 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                       BOND INTEREST RECONCILIATION DETAIL



                                                           Additions
                           -------------------------------------------------------------------------
         Prior    Current                                                                   Other
       Interest  Interest  Prior Interest   Interest Accrual   Prepayment     Yield       Interest
Class  Due Date  Due Date   Shortfall Due  on Prior Shortfall   Premiums   Maintenance  Proceeds (1)
----------------------------------------------------------------------------------------------------



                    Deductions
       -----------------------------------
                  Deferred &                Distributable  Interest
       Allocable   Accretion    Interest     Certificate    Payment
Class     PPIS     Interest   Loss Expense     Interest     Amount
-------------------------------------------------------------------




(1)  Other Interest Proceeds are additional interest amounts specifically
     allocated to the bond(s) and used in determining the Bondholder's
     Distributable Interest.


                                                                    PAGE 5 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                          INTEREST ADJUSTMENTS SUMMARY

SHORTFALL ALLOCATED TO THE BONDS:
---------------------------------
Net Prepayment Int. Shortfalls Allocated to the Bonds                       0.00
Special Servicing Fees                                                      0.00
Workout Fees                                                                0.00
Liquidation Fees                                                            0.00
Legal Fees                                                                  0.00
Misc. Fees & Expenses Paid by/to Servicer                                   0.00
Interest Paid to Servicer on Outstanding Advances                           0.00
ASER Interest Advance Reduction                                             0.00
Interest Not Advanced (Current Period)                                      0.00
Recoup of Prior Advances by Servicer                                        0.00
Servicing Fees Paid Servicer on Loans Not Advanced                          0.00
Misc. Fees & Expenses Paid by Trust                                         0.00
Shortfall Due to Rate Modification                                          0.00
Other Interest Loss                                                         0.00
                                                                            ----
Total Shortfall Allocated to the Bonds                                      0.00
                                                                            ====

EXCESS ALLOCATED TO THE BONDS:
------------------------------
Other Interest Proceeds Due the Bonds                                       0.00
Prepayment Interest Excess Due the Bonds                                    0.00
Interest Income                                                             0.00
Yield Maintenance Penalties Due the Bonds                                   0.00
Prepayment Penalties Due the Bonds                                          0.00
Recovered ASER Interest Due the Bonds                                       0.00
Recovered Interest Due the Bonds                                            0.00
ARD Excess Interest                                                         0.00
                                                                            ----
Total Excess Allocated to the Bonds                                         0.00
                                                                            ====

              AGGREGATE INTEREST ADJUSTMENT ALLOCATED TO THE BONDS

Total Excess Allocated to the Bonds                                         0.00
Less Total Shortfall Allocated to the Bonds                                 0.00
                                                                            ----
Total Interest Adjustment to the Bonds                                      0.00
                                                                            ====


                                                                    PAGE 6 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

          ASSET-BACKED FACTS ~ 15 MONTH HISTORICAL LOAN STATUS SUMMARY



                                           Delinquency Aging Categories
----------------------------------------------------------------------------------------------
              Delinq 1 Month  Delinq 2 Months  Delinq 3+ Months   Foreclosure         REO
Distribution  --------------------------------------------------------------------------------
    Date        #    Balance    #    Balance     #     Balance     #   Balance    #   Balance
----------------------------------------------------------------------------------------------

                 0      0.00     0      0.00      0           0     0     0.00     0     0.00
 6/16/2006
              0.00%     0.00% 0.00%     0.00%  0.00%       0.00% 0.00%    0.00% 0.00%    0.00%
----------------------------------------------------------------------------------------------
                 0      0.00     0      0.00      0           0     0     0.00     0     0.00
 3/17/2006
              0.00%     0.00% 0.00%     0.00%  0.00%       0.00% 0.00%    0.00% 0.00%    0.00%
----------------------------------------------------------------------------------------------
                 0      0.00     0      0.00      0           0     0     0.00     0     0.00
 2/17/2006
              0.00%     0.00% 0.00%     0.00%  0.00%       0.00% 0.00%    0.00% 0.00%    0.00%
----------------------------------------------------------------------------------------------


                        Special Event Categories (1)
--------------------------------------------------------------
              Modifications  Specially Serviced    Bankruptcy
Distribution  ------------------------------------------------
    Date        #   Balance      #   Balance       #   Balance
--------------------------------------------------------------

                 0     0.00       0     0.00        0     0.00
 6/16/2006
              0.00%    0.00%   0.00%    0.00%    0.00%    0.00%
--------------------------------------------------------------
                 0     0.00       0     0.00        0     0.00
 3/17/2006
              0.00%    0.00%   0.00%    0.00%    0.00%    0.00%
--------------------------------------------------------------
                 0     0.00       0     0.00        0     0.00
 2/17/2006
              0.00%    0.00%   0.00%    0.00%    0.00%    0.00%
--------------------------------------------------------------


(1)  Note: Modification, Specially Serviced & Bankruptcy Totals are Included in
     the Appropriate Delinquency Aging Category


                                                                    PAGE 7 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

          ASSET-BACKED FACTS ~ 15 MONTH HISTORICAL PAYOFF/LOSS SUMMARY



----------------------------------------------------------------------------------------------------------------------
              Ending Pool (1)   Payoffs (2)    Penalties  Appraisal Reduct. (2)  Liquidations (2)  Realized Losses (2)
Distribution  --------------------------------------------------------------------------------------------------------
    Date         #   Balance     #   Balance   #  Amount        #   Balance         #   Balance         #   Amount
----------------------------------------------------------------------------------------------------------------------

16-Jun-06        1         1      0        0   0       0         0        0          0        0          0       0
                               0.00%    0.00%                 0.00%    0.00%      0.00%    0.00%      0.00%   0.00%
----------------------------------------------------------------------------------------------------------------------
17-Mar-06        1         1      0        0   0       0         0        0          0        0          0       0
                               0.00%    0.00%                 0.00%    0.00%      0.00%    0.00%      0.00%   0.00%
----------------------------------------------------------------------------------------------------------------------
17-Feb-06        1         1      0        0   0       0         0        0          0        0          0       0
                               0.00%    0.00%                 0.00%    0.00%      0.00%    0.00%      0.00%   0.00%
----------------------------------------------------------------------------------------------------------------------


------------------------------------------------
              Remaining Term  Curr Weighted Avg.
Distribution  ----------------------------------
    Date        Life  Amort     Coupon  Remit
------------------------------------------------

16-Jun-06          0              0.00%  0.00%

------------------------------------------------
17-Mar-06          0              0.00%  0.00%

------------------------------------------------
17-Feb-06          0              0.00%  0.00%

------------------------------------------------


(1)  Percentage based on pool as of cutoff.

(2)  Percentage based on pool as of beginning of period.


                                                                    PAGE 8 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                          MORTGAGE LOAN CHARACTERISTICS

              DISTRIBUTION OF PRINCIPAL BALANCES

                                                           Weighted Average
Current Scheduled    # of      Scheduled       % of    ------------------------
    Balance         Loans       Balance      Balance   Term   Coupon   PFY DSCR
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
                      0            0          0.00%
-------------------------------------------------------------------------------

Average Schedule Balance                 0
Maximum Schedule Balance    (9,999,999,999)
Minimum Schedule Balance     9,999,999,999

                DISTRIBUTION OF REMAINING TERM (FULLY AMORTIZING)

                                                           Weighted Average
Fully Amortizing     # of      Scheduled       % of    ------------------------
 Mortgage Loans     Loans       Balance      Balance   Term   Coupon   PFY DSCR
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
                      0            0          0.00%
-------------------------------------------------------------------------------

                     DISTRIBUTION OF MORTGAGE INTEREST RATES

                                                           Weighted Average
 Current Mortgage    # of      Scheduled       % of    ------------------------
  Interest Rate     Loans       Balance      Balance   Term   Coupon   PFY DSCR
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
                      0            0          0.00%
-------------------------------------------------------------------------------

Minimum Mortgage Interest Rate    ,900.000%
Maximum Mortgage Interest Rate    ,900.000%

                    DISTRIBUTION OF REMAINING TERM (BALLOON)

                                                           Weighted Average
     Balloon         # of      Scheduled       % of    ------------------------
  Mortgage Loans    Loans       Balance      Balance   Term   Coupon   PFY DSCR
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
                      0            0          0.00%
-------------------------------------------------------------------------------


                                                                    PAGE 9 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                          MORTGAGE LOAN CHARACTERISTICS

                           DISTRIBUTION OF DSCR (PFY)

 Debt Service     # of   Scheduled     % of
Coverage Ratio   Loans    Balance    Balance   WAMM   WAC   PFY DSCR
--------------------------------------------------------------------

--------------------------------------------------------------------
                    0         0       0.00%
--------------------------------------------------------------------

Maximum DSCR   0.000
Minimum DSCR   0.000

                          DISTRIBUTION OF DSCR (CUTOFF)

 Debt Service     # of   Scheduled     % of
Coverage Ratio   Loans    Balance    Balance   WAMM   WAC   PFY DSCR
--------------------------------------------------------------------

--------------------------------------------------------------------
                    0         0       0.00%
--------------------------------------------------------------------

Maximum DSCR   0.000
Minimum DSCR   0.000

                             GEOGRAPHIC DISTRIBUTION

  Geographic      # of   Scheduled     % of
   Location      Loans    Balance    Balance   WAMM   WAC   PFY DSCR
--------------------------------------------------------------------

--------------------------------------------------------------------
                    0         0       0.00%
--------------------------------------------------------------------


                                                                   PAGE 10 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                          MORTGAGE LOAN CHARACTERISTICS

                         DISTRIBUTION OF PROPERTY TYPES

                    # of    Scheduled     % of
Property Types      Loans    Balance    Balance   WAMM   WAC   PFY DSCR
-----------------------------------------------------------------------

-----------------------------------------------------------------------
                      0         0        0.00%
=======================================================================

                        DISTRIBUTION OF AMORTIZATION TYPE

                    # of    Scheduled     % of
Amortization Type   Loans    Balance    Balance   WAMM   WAC   PFY DSCR
-----------------------------------------------------------------------

-----------------------------------------------------------------------
                      0         0        0.00%
=======================================================================

                         DISTRIBUTION OF LOAN SEASONING

                    # of    Scheduled     % of
Number of Months    Loans    Balance    Balance   WAMM   WAC   PFY DSCR
-----------------------------------------------------------------------

-----------------------------------------------------------------------
                      0         0        0.00%
=======================================================================

                       DISTRIBUTION OF YEAR LOANS MATURING

                     # of   Scheduled     % of
    Year            Loans    Balance    Balance   WAMM    WAC   PFY DSCR
-----------------------------------------------------------------------
    2006              0         0        0.00%      0    0.00%    0.00
    2007              0         0        0.00%      0    0.00%    0.00
    2008              0         0        0.00%      0    0.00%    0.00
    2009              0         0        0.00%      0    0.00%    0.00
    2010              0         0        0.00%      0    0.00%    0.00
    2011              0         0        0.00%      0    0.00%    0.00
    2012              0         0        0.00%      0    0.00%    0.00
    2013              0         0        0.00%      0    0.00%    0.00
    2014              0         0        0.00%      0    0.00%    0.00
    2015              0         0        0.00%      0    0.00%    0.00
    2016              0         0        0.00%      0    0.00%    0.00
2017 & Greater        0         0        0.00%      0    0.00%    0.00
-----------------------------------------------------------------------
                      0         0        0.00%
=======================================================================


                                                                   PAGE 11 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                             DELINQUENT LOAN DETAIL



             Paid                 Outstanding   Out. Property                   Special
Disclosure   Thru   Current P&I      P&I          Protection    Loan Status     Servicer      Foreclosure   Bankruptcy    REO
 Control #   Date     Advance     Advances**       Advances       Code (1)    Transfer Date       Date         Date      Date
-----------------------------------------------------------------------------------------------------------------------------


-----------------------------------------------------------------------------------------------------------------------------
TOTAL
=============================================================================================================================


A. IN GRACE PERIOD

B. LATE PAYMENT BUT < 1 MONTH DELINQ.

1. DELINQ. 1 MONTH

2. DELINQ. 2 MONTHS

3. DELINQUENT 3 + MONTHS

4. PERFORMING MATURED BALLOON

5. NON PERFORMING MATURED BALLOON

7. FORECLOSURE

9. REO

**   Outstanding P&I Advances include the current period P&I Advances and may
     include Servicer Advances.


                                                                   PAGE 12 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                                LOAN LEVEL DETAIL



                                             Operating              Ending                                              Loan
Disclosure         Property  Maturity   PFY  Statement    Geo.    Principal  Note  Scheduled  Prepayment  Prepayment   Status
 Control #  Group    Type      Date    DSCR     Date    Location   Balance   Rate     P&I       Amount       Date     Code (1)
------------------------------------------------------------------------------------------------------------------------------




*    NOI and DSCR, if available and reportable under the terms of the trust
     agreement, are based on information obtained from the related borrower, and
     no other party to the agreement shall be held liable for the accuracy or
     methodology used to determine such figures.

(1) Legend:

A. In Grace Period

B. Late Payment but < 1 month delinq

1. Delinquent 1 month

2. Delinquent 2 months

3. Delinquent 3+ months

4. Performing Matured Balloon

5. Non Performing Matured Ballon

7. Foreclosure

9. REO


                                                                   PAGE 13 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                              REALIZED LOSS DETAIL



                                                                        Gross                                 Net
                                                                       Proceeds                            Proceeds
                                                 Beginning            as a % of   Aggregate       Net      as a % of
               Disclosure  Appraisal  Appraisal  Scheduled    Gross     Sched.   Liquidation  Liquidation    Sched.   Realized
Period          Control #     Date      Value     Balance   Proceeds   Balance    Expenses *    Proceeds    Balance     Loss
------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------------
CURRENT TOTAL

CUMULATIVE
==============================================================================================================================


*    Aggregate liquidation expenses also include outstanding P&I advances and
     unpaid servicing fees, unpaid trustee fees, etc..


                                                                   PAGE 14 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                  BOND/COLLATERAL REALIZED LOSS RECONCILIATION



                                                                                               Interest      Modification
                       Beginning                                                             (Shortages)/    Adjustments/
                    Balance of the    Aggregate     Prior Realized    Amounts Covered by   Excesses applied    Appraisal
Prospectus              Loan at     Realized Loss  Loss Applied to  Overcollateralization     to Realized      Reduction
    ID      Period    Liquidation      on Loans      Certificates      and other Credit        Losses         Adjustment

                                                          A                   B                    C               D
-------------------------------------------------------------------------------------------------------------------------


CUMULATIVE


               Additional
             (Recoveries)/                                          (Recoveries)/
                Expenses     Current Realized   Recoveries of       Realized Loss
Prospectus     applied to     Loss Applied to  Realized Losses       Applied to
    ID      Realized Losses    Certificates*     paid as Cash   Certificate Interest

                   E
------------------------------------------------------------------------------------

CUMULATIVE


*    In the Initial Period the Current Realized Loss Applied to Certificates
     will equal Aggregate Realized Loss on Loans - B - C - D + E instead of A -
     C - D + E

Description of Fields
---------------------
        A               Prior Realized Loss Applied to Certificates

        B               Reduction to Realized Loss applied to bonds (could
                        represent OC, insurance policies, reserve accounts, etc)

        C               Amounts classified by the Master as interest adjustments
                        from general collections on a loan with a Realized Loss

        D               Adjustments that are based on principal haircut or
                        future interest foregone due to modification

        E               Realized Loss Adjustments, Supplemental Recoveries or
                        Expenses on a previously liquidated loan


                                                                   PAGE 15 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                           APPRAISAL REDUCTION DETAIL



                                                                             Remaining Term                               Appraisal
Disclosure  Appraisal  Scheduled    AR    Current P&I        Note  Maturity  --------------  Property  Geographic        -----------
 Control#   Red. Date   Balance   Amount    Advance    ASER  Rate    Date    Life              Type     Location   DSCR  Value  Date
------------------------------------------------------------------------------------------------------------------------------------


            --------   ------------------------------------

            ========   ====================================



                                                                   PAGE 16 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

              MATERIAL BREACHES AND MATERIAL DOCUMENT DEFECT DETAIL

               Ending    Material
Disclosure   Principal    Breach    Material Breach and Material Document Defect
 Control #    Balance      Date                       Description
--------------------------------------------------------------------------------

                Material breaches of pool asset representation or
                      warranties or transaction covenants.


                                                                   PAGE 17 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                  HISTORICAL COLLATERAL LEVEL PREPAYMENT REPORT



Disclosure   Payoff   Initial                Payoff   Penalty   Prepayment   Maturity   Property   Geographic
Control #    Period   Balance      Type      Amount    Amount     Date         Date       Type      Location
-------------------------------------------------------------------------------------------------------------


                                             ----------------
                                CURRENT
                                CUMULATIVE
                                             ================



                                                                   PAGE 18 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

            SPECIALLY SERVICED (PART I) ~ LOAN DETAIL (END OF PERIOD)



                         Loan        Balance                      Remaining
Disclosure  Servicing   Status  ----------------  Note  Maturity  ---------  Property    Geo.                             NOI
 Control #  Xfer Date  Code(1)  Schedule  Actual  Rate    Date    Life         Type    Location     NOI        DSCR       Date
--------------------------------------------------------------------------------------------------------------------------------

                                                                                                 Not Avail  Not Avail  Not Avail

            ---------           ----------------

            =========           ================


(1) Legend:

A. P&I Adv - in Grace Period

B. P&I Adv - < one month delinq

1. P&I Adv - delinquent 1 month

2. P&I Adv - delinquent 2 months

3. P&I Adv - delinquent 3+ months

4. Mat. Balloon/Assumed P&I

5. Non Performing Mat. Balloon

7. Foreclosure

9. REO


                                                                   PAGE 19 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

  SPECIALLY SERVICED LOAN DETAIL (PART II) ~ SERVICER COMMENTS (END OF PERIOD)

Disclosure  Resolution
 Control #   Strategy   Comments
--------------------------------


                                                                   PAGE 20 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                           MATURITY EXTENSION SUMMARY

LOANS WHICH HAVE HAD THEIR MATURITY DATES EXTENDED
   Number of Loans:                                                       0
   Stated Principal Balance outstanding:                               0.00
   Weighted Average Extension Period:                                     0

LOANS IN THE PROCESS OF HAVING THEIR MATURITY DATES EXTENDED
   Number of Loans:                                                       0
   Stated Principal Balance outstanding:                               0.00
   Weighted Average Extension Period:                                     0

LOANS IN THE PROCESS OF HAVING THEIR MATURITY DATES FURTHER EXTENDED
   Number of Loans:                                                       0
   Cutoff Principal Balance:                                           0.00
   Weighted Average Extension Period:                                     0

LOANS PAID-OFF THAT DID EXPERIENCE MATURITY DATE EXTENSIONS
   Number of Loans:                                                       0
   Cutoff Principal Balance:                                           0.00
   Weighted Average Extension Period:                                     0

LOANS PAID-OFF THAT DID NOT EXPERIENCE MATURITY DATE EXTENSIONS
   Number of Loans:                                                       0
   Cutoff Principal Balance:                                           0.00


                                                                   PAGE 21 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                               RATING INFORMATION

                   ORIGINAL RATINGS     RATING CHANGE/CHANGE DATE(1)
                ---------------------   ----------------------------
CLASS   CUSIP   FITCH   MOODY'S   S&P     FITCH     MOODY'S     S&P
--------------------------------------------------------------------

NR - Designates that the class was not rated by the rating agency.

(1)  Changed ratings provided on this report are based on information provided
     by the applicable rating agency via electronic transmission. It shall be
     understood that this transmission will generally have been provided to
     LaSalle within 30 days of the payment date listed on this statement.
     Because ratings may have changed during the 30 day window, or may not be
     being provided by the rating agency in an electronic format and therefore
     not being updated on this report, LaSalle recommends that investors obtain
     current rating information directly from the rating agency.


                                                                   PAGE 22 OF 23





[LaSalle Bank LOGO]      LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C7      Statement Date: 15-Dec-06
ABN AMRO              COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,   Payment Date: 15-Dec-06
                                      SERIES 2006-C7                   Prior Payment: N/A
                                                                       Next Payment: 18-Jan-07
                                                                       Record Date: 05-Dec-06


                                 ABN AMRO ACCT:

                                     LEGEND

Until this statement/report is filed with the Commission with respect to the
Trust pursuant to Section 15(d) of the Securities Exchange Act of 1934, as
amended, the recipient hereof shall be deemed to keep the information contained
herein confidential and such information will not, without the prior consent of
the Master Servicer or the Trustee, be disclosed by such recipient or by its
officers, directors, partners, employees, agents or representatives in any
manner whatsoever, in whole or in part.


                                                                   PAGE 23 OF 23




                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

ANNEX E

REFERENCE RATE SCHEDULE


Months Interest Accrual Period * Reference Rate (%)
1 November-06
6.04886
2 December-06
6.04889
3 January-07
6.04889
4 February-07
6.04887
5 March-07
6.24996
6 April-07
6.04886
7 May-07
6.24996
8 June-07
6.04886
9 July-07
6.24996
10 August-07
6.24996
11 September-07
6.04886
12 October-07
6.24996
13 November-07
6.04886
14 December-07
6.24996
15 January-08
6.04889
16 February-08
6.04886
17 March-08
6.24997
18 April-08
6.04887
19 May-08
6.24999
20 June-08
6.04888
21 July-08
6.25000
22 August-08
6.25000
23 September-08
6.04889
24 October-08
6.25002
25 November-08
6.04889
26 December-08
6.04893
27 January-09
6.04893
28 February-09
6.04894
29 March-09
6.25005
30 April-09
6.04892
31 May-09
6.25007
32 June-09
6.04893
33 July-09
6.25008
34 August-09
6.25009
35 September-09
6.04895
36 October-09
6.25011
37 November-09
6.04896
38 December-09
6.04893
39 January-10
6.04889
40 February-10
6.04894
41 March-10
6.24990
42 April-10
6.04870
43 May-10
6.24980
44 June-10
6.04860
45 July-10
6.24971
* Reflects calendar month in which subject interest accrual period begins.

E-1



ANNEX E

REFERENCE RATE SCHEDULE


Months Interest Accrual Period * Reference Rate (%)
46 August-10
6.24966
47 September-10
6.04845
48 October-10
6.24956
49 November-10
6.04834
50 December-10
6.04832
51 January-11
6.04827
52 February-11
6.04835
53 March-11
6.24929
54 April-11
6.04807
55 May-11
6.24918
56 June-11
6.04796
57 July-11
6.24988
58 August-11
6.21267
59 September-11
6.01227
60 October-11
6.20714
61 November-11
6.00800
62 December-11
6.20713
63 January-12
6.00802
64 February-12
6.00803
65 March-12
6.20711
66 April-12
6.00795
67 May-12
6.20710
68 June-12
6.00793
69 July-12
6.20709
70 August-12
6.20708
71 September-12
6.00791
72 October-12
6.20707
73 November-12
6.00789
74 December-12
6.00792
75 January-13
6.00791
76 February-13
6.00808
77 March-13
6.20704
78 April-13
6.00784
79 May-13
6.20702
80 June-13
6.00805
81 July-13
6.20725
82 August-13
6.20724
83 September-13
6.00802
84 October-13
6.20778
   
 
* Reflects calendar month in which subject interest accrual period begins.

E-2



ANNEX F
    
CLASS A-AB PLANNED PRINCIPAL BALANCE SCHEDULE


Distribution Date Planned Principal Balance
December-06 54,000,000.00
January-07 54,000,000.00
February-07 54,000,000.00
March-07 54,000,000.00
April-07 54,000,000.00
May-07 54,000,000.00
June-07 54,000,000.00
July-07 54,000,000.00
August-07 54,000,000.00
September-07 54,000,000.00
October-07 54,000,000.00
November-07 54,000,000.00
December-07 54,000,000.00
January-08 54,000,000.00
February-08 54,000,000.00
March-08 54,000,000.00
April-08 54,000,000.00
May-08 54,000,000.00
June-08 54,000,000.00
July-08 54,000,000.00
August-08 54,000,000.00
September-08 54,000,000.00
October-08 54,000,000.00
November-08 54,000,000.00
December-08 54,000,000.00
January-09 54,000,000.00
February-09 54,000,000.00
March-09 54,000,000.00
April-09 54,000,000.00
May-09 54,000,000.00
June-09 54,000,000.00
July-09 54,000,000.00
August-09 54,000,000.00
September-09 54,000,000.00
October-09 54,000,000.00
November-09 54,000,000.00
December-09 54,000,000.00
January-10 54,000,000.00
February-10 54,000,000.00
March-10 54,000,000.00
April-10 54,000,000.00
May-10 54,000,000.00
June-10 54,000,000.00
July-10 54,000,000.00
August-10 54,000,000.00
September-10 54,000,000.00

F-1



ANNEX F
    
CLASS A-AB PLANNED PRINCIPAL BALANCE SCHEDULE


Distribution Date Planned Principal Balance
October-10 54,000,000.00
November-10 54,000,000.00
December-10 54,000,000.00
January-11 54,000,000.00
February-11 54,000,000.00
March-11 54,000,000.00
April-11 54,000,000.00
May-11 54,000,000.00
June-11 54,000,000.00
July-11 54,000,000.00
August-11 54,000,000.00
September-11 54,000,000.00
October-11 54,000,000.00
November-11 53,335,459.77
December-11 52,422,000.00
January-12 51,615,000.00
February-12 50,805,000.00
March-12 49,768,000.00
April-12 48,948,000.00
May-12 48,013,000.00
June-12 47,183,000.00
July-12 46,239,000.00
August-12 45,400,000.00
September-12 44,557,000.00
October-12 43,600,000.00
November-12 42,747,000.00
December-12 41,780,000.00
January-13 40,918,000.00
February-13 40,052,000.00
March-13 38,853,000.00
April-13 37,976,000.00
May-13 36,985,000.00
June-13 33,736,000.00
July-13 32,739,000.00
August-13 31,846,000.00
September-13 30,947,000.00
October-13 29,936,000.00
November-13 28,947,000.00
December-13 27,828,000.00
January-14 26,828,000.00
February-14 25,823,000.00
March-14 24,441,000.00
April-14 23,423,000.00
May-14 22,276,000.00
June-14 21,247,000.00

F-2



ANNEX F
    
CLASS A-AB PLANNED PRINCIPAL BALANCE SCHEDULE


Distribution Date   Planned Principal Balance  
July-14   20,089,000.00
 
August-14   19,048,000.00
 
September-14   18,002,000.00
 
October-14   16,828,000.00
 
November-14   15,770,000.00
 
December-14   14,584,000.00
 
January-15   13,515,000.00
 
February-15   12,440,000.00
 
March-15   10,994,000.00
 
April-15   9,906,000.00
 
May-15   8,691,000.00
 
June-15   7,590,000.00
 
July-15   6,363,000.00
 
August-15   5,251,000.00
 
September-15   4,132,000.00
 
October-15   2,888,000.00
 
November-15   1,757,000.00
 
December-15   0.00
 
        and thereafter  
 

F-3





                      [THIS PAGE INTENTIONALLY LEFT BLANK.]

ANNEX G

GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES

Except in limited circumstances, the globally offered LB-UBS Commercial Mortgage Trust 2006-C7, Commercial Mortgage Pass-Through Certificates, Series 2006-C7, Class X-CP, Class A-1, Class A-2, Class A-AB, Class A-3, Class A-1A, Class A-M, Class A-J, 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 and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional Eurobond practice, which is seven calendar days' settlement.

Secondary market trading between investors holding book-entry certificates through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.

Secondary cross-market trading between member organizations of Clearstream or Euroclear and DTC participants holding book-entry certificates will be accomplished on a delivery against payment basis through the respective depositaries of Clearstream and Euroclear, in that capacity, as DTC participants.

As described under ‘‘U.S. Federal Income Tax Documentation Requirements’’ below, non-U.S. holders of book-entry certificates will be subject to U.S. withholding taxes unless those holders meet specific requirements and deliver appropriate U.S. tax documents to the securities clearing organizations of their participants.

Initial Settlement

All certificates of each class of offered certificates will be held in registered form by DTC in the name of Cede & Co. as nominee of DTC. Investors' interests in the book-entry certificates will be represented through financial institutions acting on their behalf as direct and indirect DTC participants. As a result, Clearstream and Euroclear will hold positions on behalf of their member organizations through their respective depositaries, which in turn will hold positions in accounts as 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 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 and/or Euroclear Participants.    Secondary market trading between member organizations of Clearstream or Euroclear will be settled using the procedures applicable to conventional Eurobonds in same-day funds.

Trading between DTC Seller and Clearstream 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 or Euroclear, the purchaser will send instructions to Clearstream or Euroclear through that member organization at least one business day prior to settlement. Clearstream or Euroclear, as the case may be, will instruct the respective depositary to receive the book-entry certificates against payment. Payment will include interest accrued on the book-entry certificates from and including the 11th day of the calendar month in which the last coupon distribution date occurs (or, if no coupon distribution date has occurred, from and including November 11, 2006) to and excluding the settlement date, calculated on a 30/360 Basis. Payment will then be made by the respective depositary to the DTC participant's account against delivery of the book-entry

G-1



certificates. After settlement has been completed, the book-entry certificates will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the account of the member organization of Clearstream or Euroclear, as the case may be. The securities credit will appear the next day, European time, and the cash debit will be back-valued to, and the interest on the book-entry certificates will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date, which means the trade fails, the Clearstream or Euroclear cash debit will be valued instead as of the actual settlement date.

Member organizations of Clearstream and Euroclear will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream or Euroclear. Under this approach, they may take on credit exposure to Clearstream or Euroclear until the book-entry certificates are credited to their accounts one day later.

As an alternative, if Clearstream or Euroclear has extended a line of credit to them, member organizations of Clearstream or Euroclear can elect not to pre-position funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, the member organizations purchasing book-entry certificates would incur overdraft charges for one day, assuming they cleared the overdraft when the book-entry certificates were credited to their accounts. However, interest on the book-entry certificates would accrue from the value date. Therefore, in many cases the investment income on the book-entry certificates earned during that one-day period may substantially reduce or offset the amount of those overdraft charges, although this result will depend on the cost of funds of the respective member organization of Clearstream or Euroclear.

Since the settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending book-entry certificates to the respective depositary for the benefit of member organizations of Clearstream or Euroclear. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant a cross-market transaction will settle no differently than a trade between two DTC participants.

Trading between Clearstream or Euroclear Seller and DTC Purchaser.    Due to time zone differences in their favor, member organizations of Clearstream or Euroclear may employ their customary procedures for transactions in which book-entry certificates are to be transferred by the respective clearing system, through the respective depositary, to a DTC participant. The seller will send instructions to Clearstream or Euroclear through a member organization of Clearstream or Euroclear at least one business day prior to settlement. In these cases, Clearstream or Euroclear, as appropriate, will instruct the respective depositary to deliver the book-entry certificates to the DTC participant's account against payment. Payment will include interest accrued on the book-entry certificates from and including the 11th day of the calendar month in which the last coupon distribution date occurs (or, if no coupon distribution date has occurred, from and including November 11, 2006) to and excluding the settlement date, calculated on a 30/360 Basis. The payment will then be reflected in the account of the member organization of Clearstream or Euroclear the following day, and receipt of the cash proceeds in the account of that member organization of Clearstream or Euroclear would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the member organization of Clearstream or Euroclear have a line of credit with its respective clearing system and elect to be in debt in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over the one-day period. If settlement is not completed on the intended value date, which means the trade fails, receipt of the cash proceeds in the account of the member organization of Clearstream or Euroclear would be valued instead as of the actual settlement date.

Finally, day traders that use Clearstream or Euroclear and that purchase book-entry certificates from DTC participants for delivery to member organizations of Clearstream or Euroclear should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem:

•  borrowing through Clearstream or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream or Euroclear accounts, in accordance with the clearing system's customary procedures;
•  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 or Euroclear accounts in order to settle the sale side of the trade; or
•  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 or Euroclear.

G-2



Certain U.S. Federal Income Tax Documentation Requirements

A holder that is not a ‘‘United States person’’ (a ‘‘U.S. person’’) within the meaning of Section 7701(a)(30) of the Internal Revenue Code (a ‘‘non-U.S. holder’’) holding a book-entry certificate through Clearstream, Euroclear or DTC may be subject to U.S. withholding tax unless such holder provides certain documentation to the issuer of such holder's book-entry certificate, the paying agent or any other entity required to withhold tax (any of the foregoing, a ‘‘U.S. withholding agent’’) establishing an exemption from withholding. A non-U.S. holder may be subject to withholding unless each U.S. withholding agent receives:

1.  from a non-U.S. holder that is classified as a corporation for U.S. federal income tax purposes or is an individual, and is eligible for the benefits of the portfolio interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN (or any successor form);
2.  from a non-U.S. holder that is eligible for an exemption on the basis that the holder's income from the certificate is effectively connected to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any successor form);
3.  from a non-U.S. holder that is classified as a partnership for U.S. federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or any successor form) with all supporting documentation (as specified in the U.S. Treasury Regulations) required to substantiate exemptions from withholding on behalf of its partners; certain partnerships may enter into agreements with the IRS providing for different documentation requirements and it is recommended that such partnerships consult their tax advisors with respect to these certification rules;
4.  from a non-U.S. holder that is an intermediary (i.e., a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of a certificate):
(a)  if the intermediary is a ‘‘qualified intermediary’’ within the meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations (a ‘‘qualified intermediary’’), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—
(i)  stating the name, permanent residence address and qualified intermediary employer identification number of the qualified intermediary and the country under the laws of which the qualified intermediary is created, incorporated or governed,
(ii)  certifying that the qualified intermediary has provided, or will provide, a withholding statement as required under section 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations,
(iii)  certifying that, with respect to accounts it identifies on its withholding statement, the qualified intermediary is not acting for its own account but is acting as a qualified intermediary, and
(iv)  providing any other information, certifications, or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information and certifications described in section 1.1441-1(e)(3)(ii) or 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or
(b)  if the intermediary is not a qualified intermediary (a ‘‘nonqualified intermediary’’), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—
(i)  stating the name and permanent residence address of the nonqualified intermediary and the country under the laws of which the nonqualified intermediary is created, incorporated or governed,
(ii)  certifying that the nonqualified intermediary is not acting for its own account,
(iii)  certifying that the nonqualified intermediary has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of such nonqualified intermediary's beneficial owners, and
(iv)  providing any other information, certifications or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information, certifications, and statements described in section 1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury Regulations; or
5.  from a non-U.S. holder that is a trust, depending on whether the trust is classified for U.S. federal income tax purposes as the beneficial owner of the certificate, either an IRS Form W-8BEN or W-8IMY; any non-U.S. holder that is a trust is encouraged to consult its tax advisors to determine which of these forms it should provide.

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All non-U.S. holders will be required to update the above-listed forms and any supporting documentation in accordance with the requirements under the U.S. Treasury Regulations. These forms generally remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Under certain circumstances, an IRS Form W-8BEN, if furnished with a taxpayer identification number, remains in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect.

In addition, all holders, including holders that are U.S. persons, holding book-entry certificates through Clearstream, Euroclear or DTC may be subject to backup withholding unless the holder—

•  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 an ‘‘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.

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PROSPECTUS

Structured Asset Securities Corporation II,

the Depositor

Mortgage Pass-Through Certificates,
Issuable in Series

We are Structured Asset Securities Corporation II, the depositor with respect to each series of certificates offered by this prospectus. We intend to offer from time to time mortgage pass-through certificates, issuable in series. 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 ‘‘Method of Distribution.’’


The Offered Certificates: The Trust Assets:
The offered certificates will be issuable in series. The issuing entity for each series of offered certificates will be a statutory or common law trust created at our direction. Each series of offered certificates will—
    
•   have its own series designation, and
•   consist of one or more classes with various payment characteristics.
    
No governmental agency or instrumentality will insure or guarantee payment on the offered certificates. The offered certificates will represent interests only in the issuing entity. They will not represent interests in or obligations of us, any sponsor or any of our or their respective affiliates. Neither we nor any of our affiliates are responsible for making payments on the offered certificates if collections on the related trust assets are insufficient.		 The assets of each issuing entity will include—
    
•   mortgage loans secured by first and/or junior liens on, or security interests in, various interests in commercial and multifamily real properties,
•   mortgage-backed securities that directly or indirectly evidence interests in, or are directly or indirectly secured by, those types of mortgage loans, or
•   some combination of those types of mortgage loans and mortgage-backed securities.
    
Trust assets may also include cash, permitted investments, letters of credit, surety bonds, insurance policies, guarantees, reserve funds, guaranteed investment contracts, interest rate exchange agreements, interest rate cap or floor 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 the public for each class of offered certificates or explain the method for determining that price, identify the applicable lead or managing underwriter(s), if any, and provide information regarding the relevant underwriting arrangements and the underwriters’ compensation. We will identify in each prospectus supplement the sponsor or sponsors for the subject securitization transaction.

Structural credit enhancement will be provided for the respective classes of offered certificates through overcollateralization, excess cash flow and/or the subordination of more junior classes of offered and/or non-offered certificates, the use of a letter of credit, a surety bond, an insurance policy or a guarantee, the establishment of one or more reserve funds or any combination of the foregoing. Payments on a class of offered certificates may occur monthly, bi-monthly, quarterly, semi-annually or at any other specified interval, commencing on the distribution date specified in the related prospectus supplement.

You should carefully consider the risk factors beginning on page 18 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 passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is November 13, 2006.



TABLE OF CONTENTS


  Page
IMPORTANT NOTICE ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS 6
AVAILABLE INFORMATION 6
SUMMARY OF PROSPECTUS 7
RISK FACTORS 18
The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable 18
Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance 20
The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks 25
Any Analysis of the Value or Income Producing Ability of a Commercial or Multifamily Property Is Highly Subjective and Subject to Error 43
Borrower Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss 45
Loan Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss 45
Geographic Concentration Within a Trust Exposes Investors to Greater Risk of Default and Loss 45
Changes in Pool Composition Will Change the Nature of Your Investment 46
The Borrower’s Form of Entity May Cause Special Risks and/or Hinder Recovery 46
Borrower Bankruptcy Proceedings Can Delay and Impair Recovery on a Mortgage Loan Underlying Your Offered Certificates 47
Environmental Liabilities Will Adversely Affect the Value and Operation of the Contaminated Property and May Deter a Lender from Foreclosing 48
Lending on Condominium Units Creates Risks for Lenders That Are Not Present When Lending on Non-Condominiums 49
Lending on Ground Leases Creates Risks for Lenders That Are Not Present When Lending on an Actual Ownership Interest in a Real Property 50
Some Provisions in the Mortgage Loans Underlying Your Offered Certificates May Be Challenged as Being Unenforceable 50
Jurisdictions With One Action or Security First Rules and/or Anti-Deficiency Legislation May Limit the Ability of the Special Servicer to Foreclose on a Real Property or to Realize on Obligations Secured by a Real Property 52
Additional Secured Debt Increases the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates; Co-Lender, Intercreditor and Similar Agreements May Limit a Mortgage Lender's Rights 52
Certain Aspects of Co-Lender, Intercreditor and Similar Agreements Executed in Connection with Mortgage Loans Underlying Your Offered Certificates May Be Unenforceable 53
Mezzanine Debt May Reduce the Cash Flow Available to Reinvest in a Mortgaged Real Property and May Increase the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates 53
World Events and Natural Disasters Could Have an Adverse Impact on the Real Properties Securing the Mortgage Loans Underlying Your Offered Certificates and Consequently Could Reduce the Cash Flow Available to Make Payments on the Offered Certificates 54
Lack of Insurance Coverage Exposes a Trust to Risk for Particular Special Hazard Losses 54
Changes in Zoning Laws May Adversely Affect the Use or Value of a Real Property 55

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  Page
Redevelopment and Renovation at the Mortgaged Properties May Have Uncertain and Adverse Results 55
Compliance with the Americans with Disabilities Act of 1990 May Be Expensive 55
Litigation and Other Legal Proceedings May Adversely Affect a Borrower’s Ability to Repay Its Mortgage Loan 55
Taxes on Foreclosure Property Will Reduce Amounts Available to Make Payments on the Offered Certificates 56
Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences 56
Potential Conflicts of Interest Can Affect a Person’s Performance 57
Property Managers and Borrowers May Each Experience Conflicts of Interest in Managing Multiple Properties. 58
With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests 58
Adjustable Rate Mortgage Loans May Entail Greater Risks of Default to Lenders Than Fixed Rate Mortgage Loans 59
Limited Information Causes Uncertainty 59
The Risk of Terrorism in the United States and Military Action May Adversely Affect the Value of the Offered Certificates and Payments on the Mortgage Assets 59
Problems with Book-Entry Registration 59
Lack of Liquidity Will Impair Your Ability to Sell Your Offered Certificates and May Have an Adverse Effect on the Market Value of Your Offered Certificates 60
The Market Value of Your Offered Certificates May Be Adversely Affected by Factors Unrelated to the Performance of Your Offered Certificates and the Underlying Mortgage Assets, such as Fluctuations in Interest Rates and the Supply and Demand of CMBS Generally 60
Certain Classes of the Offered Certificates are Subordinate to, and are Therefore Riskier than, One or More Other Classes of Certificates of the Same Series 61
Payments on the Offered Certificates Will Be Made Solely from the Limited Assets of the Related Trust, and Those Assets May Be Insufficient to Make All Required Payments on Those Certificates 61
Any Credit Support for Your Offered Certificates May Be Insufficient to Protect You Against All Potential Losses 61
The Interests of Certain Certificateholders With Rights and Powers Over Certain Servicing Actions and to Cure and Purchase Certain Mortgage Loans May Be in Conflict with the Interests of the Offered Certificateholders of the Same Series 62
Additional Compensation to the Master Servicer and the Special Servicer and Interest on Advances Will Affect Your Right to Receive Distributions on Your Offered Certificates 62
Inability to Replace the Master Servicer Could Affect Collections and Recoveries on the Mortgage Assets 62
CAPITALIZED TERMS USED IN THIS PROSPECTUS 63
THE TRUST FUND 63
Description of the Trust Assets 63
Mortgage Loans 63
Mortgage-Backed Securities 67
Substitution, Acquisition and Removal of Mortgage Assets 67
Cash, Accounts and Permitted Investments 69
Credit Support 69
Arrangements Providing Reinvestment, Interest Rate and Currency Related Protection 69

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  Page
TRANSACTION PARTICIPANTS 70
The Sponsor 70
The Depositor 76
The Issuing Entity 77
The Originators 78
DESCRIPTION OF THE GOVERNING DOCUMENTS 79
General 79
Assignment of Mortgage Assets 79
Representations and Warranties with Respect to Mortgage Assets 80
Collection and Other Servicing Procedures with Respect to Mortgage Loans 80
Servicing Mortgage Loans That Are Part of a Loan Combination 82
Sub-Servicers 82
Collection of Payments on Mortgage-Backed Securities 83
Advances 83
Matters Regarding the Master Servicer, the Special Servicer, the Manager and Us 84
Events of Default 85
Amendment 86
List of Certificateholders 87
Eligibility Requirements for the Trustee 87
Duties of the Trustee 87
Rights, Protections, Indemnities and Immunities of the Trustee 88
Resignation and Removal of the Trustee 89
DESCRIPTION OF THE CERTIFICATES 91
General 91
Investor Requirements and Transfer Restrictions 92
Payments on the Certificates 92
Allocation of Losses and Shortfalls 96
Incorporation of Certain Documents by Reference; Reports Filed with the SEC 96
Reports to Certificateholders 97
Voting Rights 98
Termination and Redemption 98
Book-Entry Registration 99
YIELD AND MATURITY CONSIDERATIONS 103
General 103
Pass-Through Rate 103
Payment Delays 103
Yield and Prepayment Considerations 103
Weighted Average Life and Maturity 105
Prepayment Models 106
Other Factors Affecting Yield, Weighted Average Life and Maturity 106
DESCRIPTION OF CREDIT SUPPORT 109
General 109
Subordinate Certificates 109
Overcollaterization and Excess Cash Flow 110
Letters of Credit 110
Insurance Policies, Surety Bonds and Guarantees 110
Reserve Funds 110
Credit Support with Respect to MBS 111
LEGAL ASPECTS OF MORTGAGE LOANS 111

4




  Page
General 111
Types of Mortgage Instruments 111
Installment Contracts 112
Leases and Rents 112
Personalty 113
Foreclosure 113
Bankruptcy Laws 117
Environmental Considerations 118
Due-on-Sale and Due-on-Encumbrance Provisions 120
Junior Liens; Rights of Holders of Senior Liens 121
Subordinate Financing 121
Default Interest and Limitations on Prepayments 121
Applicability of Usury Laws 121
Americans with Disabilities Act 122
Servicemembers Civil Relief Act 122
Forfeitures in Drug, RICO and Money Laundering Proceedings 122
FEDERAL INCOME TAX CONSEQUENCES 124
General 124
REMICs 125
Grantor Trusts 145
STATE AND OTHER TAX CONSEQUENCES 155
ERISA CONSIDERATIONS 155
General 155
Plan Asset Regulations 155
Prohibited Transaction Exemptions 156
Underwriter’s Exemption 157
Insurance Company General Accounts 157
Consultation with Counsel 158
Tax Exempt Investors 158
LEGAL INVESTMENT 158
USE OF PROCEEDS 160
METHOD OF DISTRIBUTION 160
LEGAL MATTERS 161
FINANCIAL INFORMATION 162
RATING 162
GLOSSARY 163

5



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

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, with respect to the certificates offered by this prospectus. The Securities Act registration statement number for that registration statement is 333-129844. This prospectus is part of that registration statement, but the registration statement contains additional information. Any materials, including our registration statement and the exhibits to it, that we file with the Securities and Exchange Commission may be read and copied at prescribed rates at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, in addition to copies of these materials, and that internet website is located at http://www.sec.gov.

6



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.

The Depositor We are Structured Asset Securities Corporation II, the depositor with respect to each series of offered certificates. We are a special purpose Delaware corporation. Our principal offices are located at 745 Seventh Avenue, New York, New York 10019. Our main telephone number is 212-526-7000. We will acquire the mortgage assets that are to back each series of offered certificates and transfer them to the issuing entity. See ‘‘Transaction Participants—The Depositor.’’
The Sponsor Lehman Brothers Holdings Inc., which is our affiliate, will be a sponsor with respect to each securitization transaction involving the issuance of a series of offered certificates, unless otherwise specified in the prospectus supplement. If and to the extent there are other sponsors with respect to any securitization transaction involving the issuance of a series of offered certificates, we will identify each of those sponsors and include relevant information with respect thereto in the related prospectus supplement. With respect to any securitization transaction involving the issuance of a series of offered certificates, a sponsor will be a person or entity that organizes and initiates that securitization transaction by selling or transferring assets, either directly or indirectly, including through an affiliate, to the issuing entity. See ‘‘Transaction Participants—The Sponsor.’’
The Issuing Entity The issuing entity with respect to each series of offered certificates will be a statutory trust or common law trust created at our direction. Each such trust will own and hold the related mortgage assets and be the entity in whose name the subject offered certificates are issued. See ‘‘Transaction Participants—The Issuing Entity.’’
The Originators Some or all of the mortgage loans backing a series of offered certificates may be originated by Lehman Brothers Holdings Inc. or by one of our other affiliates. In addition, there may be other third-party originators of the mortgage loans backing a series of offered certificates. See ‘‘Transaction Participants—The Originators’’ and ‘‘Transaction Participants—The Sponsor.’’ We will identify in the prospectus supplement for each series of offered certificates any originator or group of affiliated originators—apart from a sponsor and/or its affiliates—that originated or is expected to originate mortgage loans representing 10% or more of the related mortgage asset pool, by balance.

7



The Securities Being Offered The securities that will be offered by this prospectus and the related prospectus supplements consist of 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. We will identify in the related prospectus supplement, with respect to each class of offered certificates, each applicable rating agency and the minimum rating to be assigned. 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 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, to place some with investors outside the United States 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 issuing entity, 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 issuing entity for each series of offered certificates. In addition, we will transfer or arrange for the transfer of the initial trust assets to each issuing entity. 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.
If the trust assets for a series of offered certificates include mortgage loans, the parties to the applicable governing document(s) will also include—

8



• one or more master servicers that will generally be responsible for performing customary servicing duties with respect to those mortgage loans that are not defaulted, nonperforming or otherwise problematic in any material respect, and
• one or more special servicers that will generally be responsible for servicing and administering (a) those mortgage loans that are defaulted, nonperforming or otherwise problematic in any material respect, including the performance of work-outs and foreclosures with respect to those mortgage loans, and (b) 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 one of our trusts.
If the trust assets for a series of offered certificates include mortgage-backed securities, the parties to the applicable 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.
Compensation arrangements for a trustee, master servicer, special servicer or manager for one of our trusts may vary from securitization transaction to securitization transaction. In general, that compensation will be payable out of the related trust assets.
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 will describe their respective duties and compensation in further detail. See ‘‘Description of the Governing Documents.’’
Any servicer, master servicer or special servicer for one of our trusts may perform any or all of its servicing duties under the applicable governing document(s) through one or more sub-servicers. In the related prospectus supplement, we will identify any such sub-servicer that, at the time of initial issuance of the subject offered certificates, is (a) affiliated with us or with the issuing entity or any sponsor for the subject securitization transaction or (b) services 10% or more of the related mortgage assets, by balance.
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 fee, leasehold or other interest(s) of the related borrower or another person in or with respect to

9



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;
• 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

10



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;
• 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.
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.
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 participation, mortgage pass-through certificate, collateralized mortgage obligation or other 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

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• we would be free to publicly resell the security without registration.
In addition to the asset classes described above in this ‘‘—Characteristics of the Mortgage Assets’’ subsection, we may include in the trust with respect to any series of offered certificates other asset classes, provided that such other asset classes in the aggregate will not exceed 10% by principal balance of the related asset pool.
We will describe the specific characteristics of the mortgage assets underlying a series of offered certificates in the related prospectus supplement.
The trust assets with respect to a series of offered certificates will also include cash, including in the form of initial deposits and collections on the related mortgage assets and other related trust assets, bank accounts, permitted investments and, following foreclosure, acceptance of a deed in lieu of foreclosure or any other enforcement action, real property and other collateral for defaulted mortgage loans.
See ‘‘The Trust Fund.’’
Substitution, Acquisition and Removal of Mortgage Assets We will generally acquire the mortgage assets to be included in our trusts from Lehman Brothers Holdings Inc. or another of our affiliates or from another seller of commercial and multifamily mortgage loans. We will then transfer those mortgage assets to the issuing entity for the related securitization transaction.
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. If 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, and if the subject securitization transaction contemplates a prefunding period, then we will 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—or such other period as may be specified in the related prospectus supplement—following the date of initial issuance of that series of certificates, which 90-day or other period will be the prefunding period, we or our designee 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

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series of certificates, as described in the related prospectus supplement.
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, a special servicer or other specified party for one of our trusts may be obligated, under the circumstances described in that prospectus supplement, to sell on behalf of the trust a delinquent or defaulted mortgage asset.
Further, if so specified under circumstances described in the related prospectus supplement, following the date on which the total principal balances of the offered certificates are reduced to zero, all of the remaining certificateholders (which may exclude any holders of a class of certificates evidencing a residual interest in a REMIC) of a given series of certificates, acting together, may exchange those certificates for all of the mortgage loans, foreclosure properties and mortgage-backed securities remaining in the mortgage pool underlying those certificates.
If and to the extent described in the related prospectus supplement, we, a mortgage asset seller and/or another specified person or entity may make or assign to or for the benefit of one of our trusts various representations and warranties, or may be obligated to deliver to one of our trusts various documents, in either case relating to some or all of the mortgage assets transferred to that trust. Upon the discovery of a material breach of any such representation or warranty or a material defect with repect to those documents, in each case that is material and adverse in accordance with a standard set forth in the related prospectus supplement, we or such other party may be required, at our or its option, to either repurchase the affected mortgage asset(s) out of the related trust or to replace the affected mortgage asset(s) with other mortgage asset(s) that satisfy the criteria set forth in the related prospectus supplement.

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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.
Characteristics of the Offered Certificates As more particularly described under ‘‘Description of the Certificates—General’’ and ‘‘—Payments on the Certificates,’’ an offered certificate may entitle the holder to receive:
• payments of interest;
• payments of principal;
• payments of all or part of the prepayment or repayment premiums, fees and charges, equity participation payments or any other specific items or amounts received on the related mortgage assets; and/or
• payments of residual amounts remaining after required payments have been made with respect to other classes of certificates of the same series.
Any class of offered certificates may be senior or subordinate to or pari passu with 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.
Payments on a class of offered certificates may occur monthly, bi-monthly, quarterly, semi-annually or at any other specified interval, commencing on the distribution date specified in the related prospectus supplement.
We will describe the specific characteristics of each class of offered certificates in the related prospectus supplement, including payment characteristics and authorized denominations. Among other things, in the related prospectus supplement, we will summarize the flow of funds, payment priorities and allocations among the respective classes of offered certificates of any particular series, the respective classes of non-offered certificates of that series, and fees and expenses, to the extent necessary to understand the payment characteristics of those classes of offered certificates, and we will identify any events in the applicable governing document(s) that would alter the transaction structure or flow of funds. See ‘‘Description of the Certificates.’’

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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 by overcollateralization and/or excess cash flow or 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 or a reserve fund. We will describe the credit support, if any, for each class of offered certificates and, if applicable, we will identify the provider of that credit support, in the related prospectus supplement. In addition, we will summarize in the related prospectus supplement how losses not covered by credit enhancement or support will be allocated to the subject series of offered certificates.
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 agreements and interest rate floor agreements; and
• currency exchange agreements.
We will describe the types of reinvestment, interest rate and currency related protection, if any, for each class of offered certificates and, if applicable, we will identify the provider of that protection, in the related prospectus supplement.
See ‘‘Risk Factors,’’ ‘‘The Trust Fund’’ 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.

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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 Governing Documents—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 or Mandatory Redemption or 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 and Redemption.’’
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.’’
ERISA Considerations If you are a fiduciary or any other person investing assets of an employee benefit plan or other retirement plan or arrangement, you are encouraged to review with your legal advisor whether the purchase or holding of offered certificates could give rise to a transaction that is prohibited under the Employee Retirement Income Security Act of 1974, as amended, or the Internal Revenue Code of 1986. See ‘‘ERISA Considerations.’’
Legal Investment If your investment authority is subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You are

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encouraged to 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, if any, will constitute mortgage related securities for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. See ‘‘Legal Investment.’’

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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 offered certificates.

The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable

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 to be used. If the trust assets underlying your offered certificates include mortgage-backed securities, the terms of those securities may soften or enhance 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

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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.

Prepayments on the Underlying Mortgage Loans Will Affect the Yield on Your Offered Certificates; and the Rate and Timing of Those Prepayments May Be Highly Unpredictable.    If you purchase your offered certificates at a discount or premium, the yield on your offered certificates will be sensitive to prepayments on the underlying mortgage loans. 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 your actual yield being lower than your anticipated yield. Alternatively, 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 your actual yield being lower than your anticipated yield. The potential effect that prepayments may have on the yield of your offered certificates will increase as the discount deepens or the premium increases. If the amount of interest payable on your offered certificates is disproportionately large as compared to the amount of principal payable on your offered certificates, or if your offered certificates entitle you to receive payments of interest but no payments of principal, then you may fail to recover your original investment under some prepayment scenarios. 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.

Delinquencies, Defaults and Losses on the Underlying Mortgage Loans May Affect the Amount and Timing of Payments on Your Offered Certificates; and the Rate and Timing of Those Delinquencies and Defaults, and the Severity of Those Losses, Are Highly Unpredictable.    The rate and timing of delinquencies and defaults, and the severity of losses, on the underlying mortgage loans will impact the amount and timing of payments on a series of offered certificates to the extent that their effects are not offset by delinquency advances or some form of credit support.

Unless otherwise covered by delinquency advances or some form of credit support, defaults on the underlying mortgage loans may delay payments on a series of offered certificates while the defaulted mortgage loans are worked-out or liquidated. However, liquidations of defaulted mortgage loans prior to maturity could affect the yield and average life of an offered certificate in a manner similar to a voluntary prepayment.

If you calculate your anticipated yield to maturity based on an assumed rate of default and amount of losses on the underlying mortgage loans that is lower than the default rate and amount of losses actually experienced, then, to the extent that you are required to bear the additional losses, your actual yield to

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maturity will be lower than you calculated and could, under some scenarios, be negative. Furthermore, the timing of losses on the underlying mortgage loans can affect your yield. In general, the earlier you bear any loss on an underlying mortgage loan, the greater the negative effect on your yield.

See ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance’’ below.

There Is an Increased Risk of Default Associated with 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;
•  occupancy levels at or near the time of refinancing;
•  the operating history of the underlying real property;
•  changes in zoning and tax laws;
•  changes in competition in the relevant geographic 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.

See ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance’’ below.

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 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.

Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance

Most 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

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securing the defaulted mortgage loan. If the income generated by a real property were to decline as a result of the poor economic performance of that property, and as a result the property could not support debt service payments on the related mortgage loan, neither the related borrower nor any other person would be obligated to remedy the situation by making payments out of their own funds. In such a situation, the borrower could choose instead to surrender the related mortgaged property to the lender or let it be foreclosed upon. 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, among other reasons, multifamily rental and commercial real estate lending generally involves larger loans and, as described above, repayment is dependent upon:

•  the successful operation and value of the related mortgaged property, and
•  the related borrower’s ability to refinance the mortgage loan or sell the related mortgaged property.

See ‘‘—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks’’ below.

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 location, age, functionality, design and construction quality of the subject property;
•  perceptions regarding the safety, convenience and attractiveness of the property;
•  the characteristics of the neighborhood where the property is located;
•  the degree to which the subject property competes with other properties in the area;
•  the proximity and attractiveness of competing properties;
•  the existence and construction of competing properties;
•  the adequacy of the property’s management and maintenance;
•  tenant mix and concentration;
•  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 confidence, tastes and preferences;

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•  retroactive changes in building codes and other applicable laws;
•  changes in governmental rules, regulations and fiscal policies, including environmental legislation; and
•  vulnerability to litigation by tenants and patrons.

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;
•  natural disasters and civil disturbances such as earthquakes, hurricanes, floods, eruptions, terrorist attacks or riots; and
•  environmental contamination.

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.

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.

Accordingly, mortgage loans secured by income-producing properties will be affected by the expiration of leases and the ability of the respective borrowers to renew the leases or relet the space on comparable terms and on a timely basis.

Factors that may adversely affect the ability of an income-producing property to generate net operating income from lease and rental payments include:

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•  a general inability to lease space;
•  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 or any other inability to collect rental payments;
•  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;
•  a decline in the financial condition and/or bankruptcy or insolvency of a significant or sole tenant; and
•  an increase in leasing costs and/or the costs of performing landlord obligations under existing leases.

With respect to any mortgage loan backing a series of offered certificates, you should anticipate that, unless the related mortgaged real property is owner occupied, one or more—and possibly all—of the leases at the related mortgaged real property will expire at varying rates during the term of that mortgage loan and some tenants will have, and may exercise, termination options. In addition, some government-sponsored tenants will have the right as a matter of law to cancel their leases for lack of appropriations.

Additionally, in some jurisdictions, if tenant leases are subordinated to the lien created by the related mortgage instrument but do not contain attornment provisions, which are provisions requiring the tenant to recognize as landlord under the lease a successor owner following foreclosure, the leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, if a mortgaged real property is located in such a jurisdiction and is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, that mortgaged real property could experience a further decline in value if such tenants’ leases were terminated.

Some mortgage loans that back offered certificates may be secured by mortgaged real properties with tenants that are related to or affiliated with a borrower. In those cases a default by the borrower may coincide with a default by the affiliated tenants. Additionally, even if the property becomes a foreclosure property, it is possible that an affiliate of the borrower may remain as a tenant.

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.

Accordingly, 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.

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:

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•  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.

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, could be substantial, could exceed any reserves maintained for that purpose 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.

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Maintaining a Property in Good Condition Is Expensive.    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.

The Prospective Performance of the Multifamily and Commercial Mortgage Loans to be Included in Any of Our Trusts Should be Evaluated Separately from the Performance of the Multifamily and Commercial Mortgage Loans in Any of Our Other Trusts.    Notwithstanding that there are many common factors affecting the profitability and value of income producing properties in general, those factors do not apply equally to all income producing properties and, in many cases, there are special factors that will affect the profitability and/or value of a particular income producing property. See, for example, ‘‘—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks’’ below. Each income producing property represents a separate and distinct business venture; and, as a result, each of the multifamily and commercial mortgage loans included in one of our trusts requires a unique underwriting analysis. Furthermore, economic conditions, whether worldwide, national, regional or local, vary over time. The performance of a mortgage pool originated and outstanding under one set of economic conditions may vary dramatically from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions. Accordingly, investors should evaluate the mortgage loans underlying a series of offered certificates independently from the performance of the mortgage loans underlying any other series of offered certificates.

The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks

General.    The mortgage loans underlying a series of offered certificates may be secured by numerous types of multifamily and commercial properties. As discussed under ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends on the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There is No Assurance’’ above, 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. The relative

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importance of any factor affecting the value or operation of an income-producing property will depend on the type and use of the property and the type and use of a particular income-producing property may present special risks. 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. As a result, the liquidation value of any of those types of property would be substantially less than would otherwise be the case. 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 in relation to competing buildings;
•  the types of services or amenities offered at the property;
•  the location of the property;
•  distance from employment centers and shopping areas;
•  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 in the local market, including other apartment buildings and complexes, manufactured housing communities, mobile home parks and single-family housing;
•  compliance with and continuance of any government housing rental subsidy programs and/or low income housing tax credit or incentive programs from which the property receives benefits;
•  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;
•  in the case of student housing facilities, the reliance on the financial well-being of the college or university to which it relates, competition from on-campus housing units, and the relatively higher turnover rate compared to other types of multifamily tenants;
•  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;
•  local factory or other large employer closings;
•  state and local regulations, which may affect the property owner’s ability to evict tenants or 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;
•  the extent to which increases in operating costs may be passed through to tenants; and
•  the financial condition of the owner of the property.

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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.

In addition, multifamily rental properties are typically in markets that, in general, are 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 at a particular property may easily move to alternative multifamily rental properties with more desirable amenities or locations or to single family housing.

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 and/or rent stabilization 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 or rent stabilization 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 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. In addition, the differences in rents between subsidized or supported properties and other multifamily rental properties in the same area may not be a sufficient economic incentive for some eligible tenants to reside at a subsidized or supported property that may have fewer amenities or be less attractive as a residence. As a result, occupancy levels at a subsidized or supported property may decline, which may adversely affect the value and successful operation of the property.

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.

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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. Additional factors likely to affect the economic performance of a cooperative corporation include—

•  the failure of the corporation to qualify for favorable tax treatment as a ‘‘cooperative housing corporation’’ each year, which may reduce the cash flow available to make debt service payments on a mortgage loan secured by cooperatively owned property; and
•  the possibility that, upon foreclosure, if the cooperatively owned property becomes a rental property, certain units could be subject to rent control, stabilization and tenants’ rights laws, at below market rents, which may affect rental income levels and the marketability and sale proceeds of the ensuing rental property as a whole.

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 of the cooperative corporation 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 that sponsor.

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.

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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.

A number of factors may affect the value and 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 property is in a desirable location;
•  the physical condition and amenities of the building in relation to competing buildings;
•  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 property.

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,
•  grant a potential tenant a free rent or reduced rent period,
•  improve the condition of the property generally, or
•  make at its own expense, or grant a rent abatement to cover, tenant improvements for a potential tenant.

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:

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•  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.

With respect to some retail properties, one or more tenants may have the option, at any time or after the expiration of a specified period, to terminate their leases at the subject property. In many cases, the tenant is required to provide notice and/or pay penalties in connection with the exercise of its termination option. Generally, the full rental income generated by the related leases will be taken into account in the underwriting of the related underlying mortgage loan. Notwithstanding any disincentives with respect to a termination option, there can be no assurance a tenant will not exercise such an option, especially if the rent paid by that tenant is in excess of market rent. In such event, there may be a decrease in the cash flow generated by such mortgaged properties and available to make payments on the related offered certificates.

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. 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, in general, materially larger in size than the space occupied by other tenants at the same retail property and is important in attracting customers to the retail property.

A retail property may also benefit from a shadow anchor. A shadow anchor is a store or business that satisfies the criteria for an anchor store or business, 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. A shadow anchor may own the space it occupies. In those cases where the property owner does not control the space occupied by the anchor store or business, 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 or a shadow anchor may cease to operate at the property, thereby leaving its space unoccupied even though it continues to pay rent on or even own the vacant space. If an

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anchor tenant or a shadow anchor ceases operations at a retail property or if its sales do not reach a specified threshold, other tenants at the property may be entitled to terminate their leases prior to the scheduled expiration date or to pay rent at a reduced rate for the remaining term of the lease.

Accordingly, the following factors, among others, 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 shadow anchor;
•  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;
•  home shopping networks and programs;
•  internet web sites and electronic media shopping; 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.

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Office Properties.    Factors affecting the value and operation of an office property include:

•  the strength, stability, number and quality of the tenants, particularly significant tenants, at the property;
•  the physical attributes and amenities of the building in relation to competing buildings, including the condition of the HVAC system, parking and the building’s compatibility with current business wiring requirements;
•  whether the area is a desirable business location, including local labor cost and quality, tax environment, including tax benefits, and quality of life issues, such as schools and cultural amenities;
•  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;
•  accessibility from surrounding highways/streets;
•  changes in zoning laws; and
•  the financial condition of the owner of the property.

With respect to some office properties, one or more tenants may have the option, at any time or after the expiration of a specified period, to terminate their leases at the subject property. In many cases, the tenant is required to provide notice and/or pay penalties in connection with the exercise of its termination option. Generally, the full rental income generated by the related leases will be taken into account in the underwriting of the related underlying mortgage loan. Notwithstanding any disincentives with respect to a termination option, there can be no assurance that a tenant will not exercise such an option, especially if the rent paid by that tenant is in excess of market rent. In such event, there may be a decrease in the cash flow generated by such mortgaged properties and available to make payments on the related offered certificates.

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 base 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:

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•  the cost and quality of labor;
•  tax incentives; and
•  quality of life considerations, 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 value, operation and 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;
•  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;
•  changes in travel patterns caused by changes in access, energy prices, labor strikes, relocation of highways, the reconstruction of additional highways or other factors; and
•  changes in travel patterns caused by perceptions of travel safety, which perceptions can be significantly and adversely influenced by terrorist acts and foreign conflict as well as apprehension regarding the possibility of such acts or conflicts.

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 and/or may be adversely affected by prolonged unfavorable weather conditions.

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

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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, which may be at significantly higher fees than the previous 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. Additionally, any provision in a franchise agreement or management agreement providing for termination because of a bankruptcy of a franchisor or manager will generally not be enforceable.

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 operating, liquor and other licenses. That party would be required to apply in its own right for new operating, liquor and other licenses. There can be no assurance that a new license could be obtained or that it could be obtained promptly. The lack of a liquor license in a hospitality property could have an adverse impact on the revenue from that property or on its occupancy rate.

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.

Because of their dependence on disposable income of patrons, casino properties are likely to respond quickly to a downturn in the economy.

The ownership, operation, maintenance and/or financing 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.

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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;
•  medical offices;
•  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;
•  policy interpretations;
•  delays by fiscal intermediaries; and
•  government funding restrictions.

In addition, nursing facilities and assisted living facilities that are dependent on revenues from other third party payors (other than Medicare and Medicaid), such as private insurers, are also affected by the reimbursement policies of those payors.

All of the foregoing can adversely affect revenues from the operation of 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.

Health care-related facilities are subject to significant governmental regulation of the ownership, operation, maintenance and/or financing of those properties. Providers of long-term nursing care and other medical services are highly regulated by federal, state and local law. They are also 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;
•  disruptions in payments;
•  reimbursement policies;
•  audits, which may result in recoupment of payments made or withholding of payments due;

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•  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;
•  patient care liability claims, including those generated by the recent advent of the use of video surveillance, or ‘‘granny cams’’, by family members or government prosecutors to monitor care and limited availability and increased costs of insurance; and
•  shortages in staffing, increases in labor costs and labor disputes.

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. In addition, there can be no assurance that the facilities will remain licensed and loss of licensure/provider agreements by a significant number of facilities could have a material adverse effect on a borrower's ability to meet its obligations under the related mortgage loan and, therefore, on distributions on your certificates.

With respect to health care-related properties, the regulatory environment has intensified, particularly the long-term care service environment for large, for profit, multi-facility providers. For example, in the past few years, federal prosecutors have utilized the federal false claims act to prosecute nursing facilities that have quality of care deficiencies or reported instances of possible patient abuse and neglect, falsification of records, failure to report adverse events, improper use of restraints, and certain other care issues. Since facilities convicted under the false claims act may be liable for triple damages plus mandatory civil penalties, nursing facilities often settled with the government for a substantial amount of money rather than defending the allegations.

The extensive federal, state and local regulations affecting health care-related facilities include regulations on the financial and other arrangements that facilities enter into during the normal course of business. For example, anti-kickback laws prohibit certain business practices and relationships that might affect the provision and cost of health care services reimbursable under Medicare and Medicaid programs, including the payment or receipt of money or anything else of value in return for the referral of patients whose care will be paid by those programs. Sanctions for violations include criminal penalties and civil sanctions, fines and possible exclusion from payor programs. Federal and state governments have used monetary recoveries derived from prosecutions to strengthen their fraud detection and enforcement programs. There can be no assurance that government officials charged with responsibility for enforcing the anti-kickback and/or self-referral laws will not assert that certain arrangements or practices are in violation of such provisions. The operations of a nursing facility or assisted living facility could be adversely affected by the failure of its arrangements to comply with such laws or similar state laws enacted in the future.

The Deficit Reduction Act of 2006 (‘‘DRA’’) is expected to increase government anti-fraud efforts. Among other things, the DRA requires organizations, such as nursing facilities and assisted living facilities, that receive $5 million or more in Medicaid payments to train their work forces on the federal false claims act and its whistle blower provisions by January 1, 2007. The statute also encourages states to pass their own false claims laws by giving states a larger share of the money recovered from false claims cases. The effect of the DRA may be to create more whistle blowers and give rise to more false claims act prosecutions. There can be no assurance that government officials responsible for false claims act enforcement will not assert that one or more of a borrower's arrangements, practices, nursing facilities, or assisted living facilities are in violation of such laws.

Each state also has a Medicaid Fraud Control Unit (‘‘MFCU’’), which typically operates as a division of the state Attorney General's Office or equivalent, which conducts criminal and civil investigations into

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alleged abuse, neglect, mistreatment and/or misappropriation of resident property. In some cases, the allegations may be investigated by the state Attorney General, local authorities and federal and/or state survey agencies. There are MFCU and state Attorney General investigations pending and, from time to time, threatened against providers, relating to or arising out of allegations of potential resident abuse, neglect or mistreatment.

Further, nursing facilities and assisted living facilities are likely to compete on a local and regional basis with each other and with other providers who operate similar facilities. They may also compete with providers of long term care services in other settings, such as hospital rehabilitation units or home health agencies or other community-based providers. The formation of managed care networks and integrated delivery systems, as well as increasing government efforts to encourage the use of home and community-based services instead of nursing facility services, could also adversely affect nursing facilities or assisted living facilities if there are incentives that lead to the utilization of other facilities or community-based home care providers, instead of nursing facility or assisted living providers, or if competition drives down prices paid by residents. Some of the competitors of the subject facilities may be better capitalized, may offer services not offered by the facilities, or may be owned by agencies supported by other sources of income or revenue not available to for-profit facilities, such as tax revenues and charitable contributions. The success of a facility also depends upon the number of competing facilities in the local market, as well as upon other factors, such as the facility's age, appearance, reputation and management, resident and family preferences, referrals by and affiliations with managed care organizations, relationship with other health care providers and other health care networks, the types of services provided and, where applicable, the quality of care and the cost of that care. If the facilities fail to attract patients and residents and compete effectively with other health care providers, their revenues and profitability may decline.

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. Moreover, in certain circumstances, such as when federal or state authorities believe that liquidation may adversely affect the health, safety or welfare of the nursing facility and/or assisted living facility residents, a facility operator may not be allowed to liquidate for an indeterminate period of time. Finally, the receipt of any liquidation proceeds could be delayed by the approval process of any state agency necessary for the transfer of a mortgaged real property and even reduced to satisfy governmental obligations of the facility, such as audit recoupments from nursing facilities.

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. Also, lease terms with respect to industrial properties are generally for shorter periods of time and may result in a substantial percentage of leases expiring in the same year at any particular industrial property.

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,

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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. In addition, properties used for many industrial purposes are more prone to environmental concerns than other property types.

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. Depending on their location, mini-warehouses and self-storage facilities tend to be adversely affected more quickly by a general economic downturn than other types of commercial properties. 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-storage 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.

In addition, it is difficult to assess the environmental risks posed by warehouse, mini-warehouse and self-storage properties due to tenant privacy restrictions, tenant anonymity and unsupervised access to such facilities. Therefore, these facilities may pose additional environmental risks to investors. Environmental site assessments performed with respect to warehouse, mini-warehouse and self-storage properties would not include an inspection of the contents of the facilities. Therefore, it would not be possible to provide assurance that any of the units included in these kinds of facilities are free from hazardous substances or other pollutants or contaminants.

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;
•  the cost, quality and availability of food and beverage products;
•  negative publicity, resulting from instances of food contamination, food-borne illness and similar events;

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•  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—

•  market 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.

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

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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:

•  location of the manufactured housing property;
•  the ability of management to provide adequate maintenance and insurance;
•  the number of comparable competing properties in the local market;
•  the age, appearance, condition and reputation of the property;
•  the quality of management; and
•  the types of facilities and services it provides.

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

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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 and/or rent stabilization 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 or rent stabilization 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 or rent stabilization on manufactured housing communities and mobile home parks is pre-empted by state law in some states and rent control or rent stabilization is not imposed at the state level in those states. In some states, however, local rent control and/or rent stabilization 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 or rent stabilization 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 or 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;
•  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. In addition, some recreational and resort properties may be adversely affected by prolonged unfavorable weather conditions.

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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, including:

•  sporting events;
•  musical events;
•  theatrical events;
•  animal shows; and/or
•  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.

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.

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Any Analysis of the Value or Income Producing Ability of a Commercial or Multifamily Property Is Highly Subjective and Subject to Error

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 collateral for a twelve-month period that is available to pay debt service on the subject mortgage loan, to
•  the annualized payments of principal and/or interest on the subject mortgage loan and any other senior and/or pari passu loans that are secured by the related real property collateral.

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
•  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.

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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 and/or pari passu loans that are secured by the related real property collateral, 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.

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.

However, 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

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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.

See ‘‘—Repayment of a Commercial or Multifamily Mortgage Loan Depends on the Performance and Value of the Underlying Real Property, Which May Decline Over Time, and the Related Borrower’s Ability to Refinance the Property, of Which There Is No Assurance’’ above.

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
•  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 total principal balance 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.

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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 offered 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 offered certificates may exhibit an increased concentration with respect to property type, number and affiliation of borrowers and geographic location.

The Borrower’s Form of Entity May Cause Special Risks and/or Hinder Recovery

Some of the mortgage loans underlying a series of offered certificates may have borrowers that are individuals or, alternatively, are entities that either have not been structured to diminish the likelihood of their becoming bankrupt or do not satisfy all the characteristics of special purpose entities. In general, as a result of a borrower not being a special purpose entity or not being limited to owning the related mortgaged real property, the borrower may be engaged in activities unrelated to the subject mortgaged real property and may incur indebtedness or suffer liabilities with respect to those activities. Further, some of the borrowing entities may have been in existence and conducting business prior to the origination of the related underlying mortgage loans, may own or have previously owned other property that is not part of the collateral for the related underlying mortgage loans and, further, may not have always satisfied all the characteristics of special purpose entities even if they currently do so. This could negatively impact the borrower’s financial conditions and thus its ability to pay amounts due and owing under the subject underlying mortgage loan. The related mortgage documents and/or organizational documents of those borrowers may not contain the representations, warranties and covenants customarily made by a borrower that is a special purpose entity, such as limitations on indebtedness and affiliate transactions and restrictions on the borrower’s ability to dissolve, liquidate, consolidate, merge, sell all or any material portion of its assets or amend its organizational documents. These provisions are designed to mitigate the possibility that the borrower’s financial condition would be adversely impacted by factors unrelated to the related mortgaged real property and the related mortgage loan.

Borrowers not structured as bankruptcy-remote entities may be more likely to become insolvent or the subject of a voluntary or involuntary bankruptcy proceeding because those borrowers may be:

•  operating entities with businesses distinct from the operation of the property with the associated liabilities and risks of operating an ongoing business; and
•  individuals that have personal liabilities unrelated to the property.

In addition, if an underlying mortgage loan is secured by a mortgage on both the related borrower’s leasehold interest in the related mortgaged real property and the underlying fee interest in such property, the related borrower may be a special purpose entity, but the owner and pledgor of the related fee interest may not be a special purpose entity.

However, any borrower, even an entity structured to be bankruptcy-remote, as an owner of real estate will be subject to certain potential liabilities and risks. We cannot assure you that any borrower will not file for bankruptcy protection or that creditors of a borrower or a corporate or individual general partner or managing member of a borrower will not initiate a bankruptcy or similar proceeding against such borrower or corporate or individual general partner or managing member.

With respect to those borrowers that are structured as special purposes entities, although the terms of the borrower’s organizational documents and/or related loan documents require that the related borrower covenants to be a special purpose entity, in some cases those borrowers are not required to observe all covenants and conditions that typically are required in order for such an entity to be viewed under the standard rating agency criteria as a special purpose entity.

Furthermore, with respect to any related borrowers, creditors of a common parent in bankruptcy may seek to consolidate the assets of such borrowers with those of the parent. Consolidation of the assets of

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such borrowers would likely have an adverse effect on the funds available to make distributions on your offered certificates, and may lead to a downgrade, withdrawal or qualification of the ratings of your offered certificates. See ‘‘—Borrower Bankruptcy Proceedings Can Delay and Impair Recovery on a Mortgage Loan Underlying Your Offered Certificates’’ below and ‘‘Legal Aspects of Mortgage Loans—Bankruptcy Laws.’’

The mortgage loans underlying a series of offered certificates may have borrowers that own the related mortgaged real properties as tenants-in-common or may permit the related borrowers to convert into a tenant-in-common structure in the future. Generally, in tenant-in-common ownership structures, each tenant-in-common owns an undivided share in the subject real property. If a tenant-in-common desires to sell its interest in the subject real property and is unable to find a buyer or otherwise desires to force a partition, the tenant-in-common has the ability to request that a court order a sale of the subject real property and distribute the proceeds to each tenant-in-common owner proportionally. To reduce the likelihood of a partition action, a tenant-in-common borrower may be required to waive its partition right. However, there can be no assurance that, if challenged, this waiver would be enforceable or that it would be enforced in a bankruptcy proceeding.

The enforcement of remedies against tenant-in-common borrowers may be prolonged because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay is reinstated. While a lender may seek to mitigate this risk after the commencement of the first bankruptcy of a tenant-in-common by commencing an involuntary proceeding against the other tenant-in-common borrowers and moving to consolidate all those cases, there can be no assurance that a bankruptcy court would consolidate those separate cases. Additionally, tenant-in-common borrowers may be permitted to transfer portions of their interests in the subject mortgaged real property to numerous additional tenant-in-common borrowers.

The bankruptcy, dissolution or action for partition by one or more of the tenants-in-common could result in an early repayment of the related mortgage loan, a significant delay in recovery against the tenant-in-common borrowers, a material impairment in property management and a substantial decrease in the amount recoverable upon the related mortgage loan. Not all tenants-in-common for these mortgage loans may be special purpose entities and some of those tenants-in-common may be individuals.

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.

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

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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.

Environmental Liabilities Will Adversely Affect the Value and Operation of the Contaminated Property and May Deter a Lender from Foreclosing

There can be no 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
•  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—

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•  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 information in their possession regarding the presence of known lead-based paint or lead-based paint-related hazards in such housing, and
•  to deliver to potential residents or purchasers a United States Environmental Protection Agency approved information pamphlet describing 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.

Lending on Condominium Units Creates Risks for Lenders That Are Not Present When Lending on Non-Condominiums

Some mortgage loans underlying the offered certificates will be secured by—

•  the related borrower’s interest in a commercial condominium unit or multiple units in a residential condominium project, and
•  the related voting rights in the owners’ association for the subject building, development or project.

Condominiums may create risks for lenders that are not present when lending on properties that are not condominiums. In the case of condominiums, a condominium owner is generally responsible for the payment of common area maintenance charges. In the event those charges are not paid when due, the condominium association may have a lien for those unpaid charges against the owner of the subject condominium unit, and, in some cases, pursuant to the condominium declaration, the lien of the mortgage for a related mortgage loan is subordinate to that lien for unpaid common area maintenance charges. In addition, pursuant to many condominium declarations, the holders of the remaining units would become responsible for the common area maintenance charges that remain unpaid by any particular unit holder.

Further, in the case of condominiums, a board of managers generally has discretion to make decisions affecting the condominium building and there is no assurance that the borrower under a mortgage loan secured by one or more interests in that condominium will have any control over decisions made by the related board of managers. Thus, decisions made by that board of managers, including regarding assessments to be paid by the unit owners, insurance to be maintained on the condominium building, restoration following a casualty and many other decisions affecting the maintenance of that building, may not be consistent with the mortgage loan documents and may have an adverse impact on the mortgage loans that are secured by real properties consisting of such condominium interests.

There can be no assurance that the related board of managers will act in the best interests of the borrower under those mortgage loans. Further, because of the nature of condominiums, a default on the part of the borrower with respect to such real properties will not allow the special servicer the same flexibility in realizing on the collateral as is generally available with respect to commercial properties that are not condominiums. The rights of other unit owners, the documents governing the management of the condominium units and the state and local laws applicable to condominium units must be considered. In

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addition, in the event of a casualty with respect to the subject real property, because of the possible existence of multiple loss payees on any insurance policy covering the property, there could be a delay in the restoration of the property and/or the allocation of related insurance proceeds, if any. Consequently, if any of the mortgage loans underlying the offered certificates are secured by the related borrower’s interest in a condominium, servicing and realizing upon such mortgage loan could subject the holders of such offered certificates to a greater delay, expense and risk than with respect to a mortgage loan secured by a commercial property that is not a condominium.

Lending on Ground Leases Creates Risks for Lenders That Are Not Present When Lending on an Actual Ownership Interest in a Real Property

In order to secure a mortgage loan, a borrower may grant a lien on its leasehold interest in a real property as tenant under a ground lease. If the ground lease does not provide for notice to a lender of a default thereunder on the part of the borrower, together with a reasonable opportunity for the lender to cure the default, the lender may be unable to prevent termination of the lease and may lose its collateral.

In addition, upon the bankruptcy of a landlord or a tenant under a ground lease, the debtor entity has the right to assume or reject the ground lease. If a debtor landlord rejects the lease, the tenant has the right to remain in possession of its leased premises at the rent reserved in the lease for the term, including renewals. If a debtor tenant rejects any or all of its leases, the tenant’s lender may not be able to succeed to the tenant’s position under the lease unless the landlord has specifically granted the lender that right. If both the landlord and the tenant are involved in bankruptcy proceedings, the trustee for your offered certificates may be unable to enforce the bankrupt tenant’s obligation to refuse to treat as terminated a ground lease rejected by a bankrupt landlord. In those circumstances, it is possible that the trustee could be deprived of its security interest in the leasehold estate, notwithstanding lender protection provisions contained in the lease or mortgage loan documents.

Further, in a recent decision by the United States Court of Appeals for the Seventh Circuit (Precision Indus. v. Qualitech Steel SBQ, LLC, 2003 U.S. App. LEXIS 7612 (7th Cir. Apr. 23, 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, such 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 Bankruptcy Code, the lessee may be able to maintain possession of the property under the ground lease. In addition, there can be no assurance that the lessee and/or the lender (to the extent it can obtain standing to intervene) will be able to recuperate the full value of the leasehold interest in bankruptcy court.

Some Provisions in the Mortgage Loans Underlying Your Offered Certificates May Be Challenged as Being Unenforceable

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

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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.

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.

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Jurisdictions With One Action or Security First Rules and/or Anti-Deficiency Legislation May Limit the Ability of the Special Servicer to Foreclose on a Real Property or to Realize on Obligations Secured by a Real Property

Several states, including California, have laws that prohibit more than one ‘‘judicial action’’ to enforce a mortgage obligation, requiring the lender to exhaust the real property security for such obligation first and/or limiting the ability of the lender to recover a deficiency judgment from the obligor following the lender’s realization upon the collateral. This could be particularly problematic for cross-collateralized, cross-defaulted or multi-property mortgage loans secured by real properties located in multiple states where only some of those states have such rules. A lender who proceeds in violation of these rules may run the risk of forfeiting collateral and/or forfeiting the right to enforce the underlying obligation. In some jurisdictions, the benefits of such laws may also be available to a guarantor of the underlying obligation, thereby limiting the ability of the lender to recover against a guarantor without first proceeding against the collateral and without a judicial foreclosure. Accordingly, where real properties are located in jurisdictions in which ‘‘one action’’, ‘‘security first’’ and/or ‘‘anti-deficiency’’ rules may be applicable, the special servicer should seek to obtain advice of counsel prior to enforcing any of the trust’s rights under any of the related mortgage loans and/or guarantees of those mortgage loans. As a result, the special servicer may incur additional—and perhaps significant additional—delay and expense in foreclosing on the underlying real properties located in states affected by ‘‘one action’’, ‘‘security first’’ or ‘‘anti-deficiency’’ rules. See ‘‘Legal Aspects of Mortgage Loans—Foreclosure—One Action and Security First Rules’’ and ‘‘—Foreclosure—Anti-Deficiency Legislation’’.

Additional Secured Debt Increases the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates; Co-Lender, Intercreditor and Similar Agreements May Limit a Mortgage Lender's Rights

With respect to one or more of the mortgage loans included in one of our trusts, the related borrower may have encumbered, or be permitted to encumber, the related real property collateral with additional secured debt. In addition, one or more mortgage loans underlying a series of offered certificates may each be part of a loan combination or split loan structure that includes one or more additional mortgage loans—not included in the related trust—that are secured by the same mortgage instrument(s) encumbering the same mortgaged property or properties, as applicable, as is the subject underlying mortgage loan. See ‘‘The Trust Fund—Mortgage Loans—Loan Combinations.’’

Even if a mortgage loan prohibits further encumbrance of the related real property, a violation of this prohibition may not become evident until the affected mortgage loan otherwise defaults. Accordingly, a lender, such as one of our trusts, may not realistically be able to prevent a borrower from incurring additional secured debt.

The existence of any additional secured indebtedness may adversely affect the related borrower's financial viability and/or the subject trust's security interest in the related real property collateral. For example, the existence of additional secured 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. The existence of other debt, secured or otherwise, may also increase the likelihood of a borrower bankruptcy. 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.’’

In addition, if any mortgage loan underlying a series of offered certificates is secured by a mortgaged real property encumbered by other mortgage debt, and if that other mortgage debt is not part of the related trust, then the related trust may be subject to a co-lender, intercreditor or similar agreement with the other affected mortgage lenders that, among other things:

•  grants any such other mortgage lender cure rights and/or a purchase option with respect to the subject underlying mortgage loan under certain default scenarios or reasonably foreseeable default scenarios;
•  limits modifications of the payment terms of the subject underlying mortgage loan; and/or

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•  limits or delays enforcement actions with respect to the subject underlying mortgage loan.

See also ‘‘—With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests’’ below.

Certain Aspects of Co-Lender, Intercreditor and Similar Agreements Executed in Connection with Mortgage Loans Underlying Your Offered Certificates May Be Unenforceable

One or more mortgage loans included in one of our trusts may be part of a split loan structure or loan combination that includes a subordinate non-trust mortgage loan, or may be senior to one or more other mortgage loans made to a common borrower and secured by the same real property collateral. Pursuant to a co-lender, intercreditor or similar agreement, a subordinate lender may have agreed that it not take any direct actions with respect to the related subordinated debt, including any actions relating to the bankruptcy of the related borrower, and that the holder of the related mortgage loan that is included in our trust—directly or through an applicable servicer—will have all rights to direct all such actions. There can be no assurance that in the event of the borrower’s bankruptcy, a court will enforce such restrictions against a subordinate lender. While subordination agreements are generally enforceable in bankruptcy, in its decision in In re 203 North LaSalle Street Partnership, 246 B.R. 325 (Bankr. N.D. Ill. March 10, 2000), the United States Bankruptcy Court for the Northern District of Illinois refused to enforce a provision of a subordination agreement that allowed a first mortgagee to vote a second mortgagee’s claim with respect to a Chapter 11 reorganization plan on the grounds that pre-bankruptcy contracts cannot override rights expressly provided by the Bankruptcy Code. This holding, which one court has already followed, potentially limits the ability of a senior lender to accept or reject a reorganization plan or to control the enforcement of remedies against a common borrower over a subordinate lender’s objections. In the event the foregoing holding is followed with respect to a co-lender relationship related to one of the mortgage loans underlying your offered certificates, the trustee’s recovery with respect to the related borrower in a bankruptcy proceeding may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed.

Mezzanine Debt May Reduce the Cash Flow Available to Reinvest in a Mortgaged Real Property and May Increase the Likelihood that a Borrower Will Default on a Mortgage Loan Underlying Your Offered Certificates

In the case of one or more mortgage loans included in one of our trusts, a direct and/or indirect equity holder in the related borrower may have pledged, or be permitted to pledge, its equity interest to secure financing to that equity holder. Such financing is often referred to as mezzanine debt. While a lender on mezzanine debt has no security interest in or rights to the related mortgaged real property, a default under the subject mezzanine loan could cause a change in control of the related borrower.

In addition, if, in the case of any mortgage loan underlying a series of offered certificates, equity interests in the related borrower have been pledged to secure mezzanine debt, then the related trust may be subject to an intercreditor or similar agreement that, among other things:

•  grants the mezzanine lender cure rights and/or a purchase option with respect to the subject underlying mortgage loan under certain default scenarios or reasonably foreseeable default scenarios;
•  limits modifications of payment terms of the subject underlying mortgage loan; and/or
•  limits or delays enforcement actions with respect to the subject underlying mortgage loan.

Furthermore, mezzanine debt reduces the mezzanine borrower's indirect equity in the subject mortgaged real property and therefore may reduce its incentive to invest cash in order to support that mortgaged real property.

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World Events and Natural Disasters Could Have an Adverse Impact on the Real Properties Securing the Mortgage Loans Underlying Your Offered Certificates and Consequently Could Reduce the Cash Flow Available to Make Payments on the Offered Certificates

The economic impact of the United States’ military operations in Iraq and other parts of the world, as well as the possibility of any terrorist attacks domestically or abroad, is uncertain, but could have a material effect on general economic conditions, consumer confidence, and market liquidity. We can give no assurance as to the effect of these events on consumer confidence and the performance of the loans held by the applicable trust fund. Any adverse impact resulting from these events would be borne by the holders of one or more classes of the affected certificates. In addition, natural disasters, including earthquakes, floods and hurricanes, also may adversely affect the real properties securing the mortgage loans that back your offered certificates. For example, real properties located in California may be more susceptible to certain hazards, such as earthquakes or widespread fires, than properties in other parts of the country, and real properties located in coastal states generally may be more susceptible to hurricanes than properties in other parts of the country. Hurricanes and related windstorms, floods and tornadoes have caused extensive and catastrophic physical damage in and to coastal and inland areas located in the Gulf Coast region of the United States and certain other parts of the southeastern United States. The underlying mortgage loans do not all require the maintenance of flood insurance for the related real properties. We cannot assure you that any damage caused by hurricanes, windstorms, floods or tornadoes would be covered by insurance.

Lack of Insurance Coverage Exposes a Trust to Risk for Particular Special Hazard Losses

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, subject to the conditions and exclusions specified in the related policy. Most such insurance policies typically do not cover any physical damage resulting from, among other things:

•  war,
•  riot, strike and civil commotion,
•  terrorism,
•  nuclear, biological or chemical materials,
•  revolution,
•  governmental actions,
•  floods and other water-related causes,
•  earth movement, including earthquakes, landslides and mudflows,
•  wet or dry rot,
•  mold,
•  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.

There is also a possibility of casualty losses on a real property for which insurance proceeds, together with land value, may not be adequate to pay the mortgage loan in full or rebuild the improvements. Consequently, there can be no assurance that each casualty loss incurred with respect to a real property securing one of the mortgage loans included in one of our trusts will be fully covered by insurance or that the mortgage loan will be fully repaid in the event of a casualty.

Furthermore, various forms of insurance maintained with respect to any of the real properties for the mortgage loans included in one of our trusts, including casualty insurance, environmental insurance and

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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 that trust. As a result of total limits under any of those blanket policies, losses at other properties covered by the blanket insurance policy may reduce the amount of insurance coverage with respect to a property securing one of the loans in our trust.

Changes in Zoning Laws May Adversely Affect the Use or Value of a Real Property

Due to changes in zoning requirements since construction, 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.

Redevelopment and Renovation at the Mortgaged Properties May Have Uncertain and Adverse Results

Some mortgage loans underlying a series of offered certificates may be secured by mortgaged real properties that are undergoing or are expected to undergo redevelopment or renovation in the future. There can be no assurance that current or planned redevelopment or renovation will be completed, that such redevelopment or renovation will be completed in the time frame contemplated, or that, when and if redevelopment or renovation is completed, such redevelopment or renovation will improve the operations at, or increase the value of, the subject property. Failure of any of the foregoing to occur could have a material negative impact on the ability of the related borrower to repay the related mortgage loan.

In the event the related borrower fails to pay the costs of work completed or material delivered in connection with such ongoing redevelopment or renovation, the portion of the mortgaged real property on which there are renovations may be subject to mechanic's or materialmen's liens that may be senior to the lien of the related mortgage loan.

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 federal requirements related to access and use by disabled persons. If a property does not currently comply with that Act, the property owner may be required to incur significant costs in order to effect that compliance. 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 or damages to private litigants.

Litigation and Other Legal Proceedings May Adversely Affect a Borrower’s Ability to Repay Its Mortgage Loan

From time to time, there may be legal proceedings pending or threatened against the borrowers and their affiliates relating to the business of, or arising out of the ordinary course of business of, the borrowers and their affiliates. It is possible that legal proceedings may have a material adverse effect on a borrower’s ability to meet its obligations under the related mortgage loan and, therefore, on distributions on your certificates.

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;

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•  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.

From time to time, there may be condemnations pending or threatened against one or more of the mortgaged real properties securing the mortgage loans in one of our trusts. The proceeds payable in connection with a total condemnation may not be sufficient to restore the related mortgaged real property or to satisfy the remaining indebtedness of the related mortgage loan. The occurrence of a partial condemnation may have a material adverse effect on the continued use of, or income generated by, the affected mortgaged real property. Therefore, we cannot assure you that the occurrence of any condemnation will not have a negative impact upon distributions on your offered certificates.

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.

The risk of taxation being imposed on income derived from the operation of foreclosed real property is particularly present in the case of hospitality and health care-related properties. These taxes, and the cost of retaining an independent contractor, would reduce the net proceeds available for payment with respect to the related offered certificates.

In addition, in connection with the trust’s acquisition of a real property, through foreclosure or similar action, and/or its liquidation of such property, the trust may in certain jurisdictions, particularly in New York and California, be required to pay state or local transfer or excise taxes. Such state or local taxes may reduce net proceeds available for distribution to the offered certificates.

Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences

Inclusion of Taxable Income in Excess of Cash Received.    If you own a certificate that evidences 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 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.’’

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Some Taxable Income of a Residual Interest Cannot 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.

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
•  a U.S. person that is classified as a partnership under the Internal Revenue Code of 1986, unless all of its beneficial owners are U.S. persons, or
•  a foreign permanent establishment or fixed base (within the meaning of an applicable income tax treaty) of a U.S. person.

It is possible that a class of offered certificates would also evidence a residual interest in a REMIC and therefore that class of offered certificates or the portion thereof that represents the residual interest in the REMIC would exhibit the characteristics, and be subject to the risks, described above in this ‘‘—Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences’’ section.

See ‘‘Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Residual Certificates.’’

Potential Conflicts of Interest Can Affect a Person’s Performance

A master servicer, special servicer or sub-servicer for one of our trusts, or any of their respective affiliates, may purchase certificates evidencing interests in that trust.

In addition, a master servicer, special servicer or sub-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. These relationships may create conflicts of interest.

In servicing mortgage loans in any of our trusts, a master servicer, special servicer or sub-servicer will each be required to observe the terms of the governing document(s) for the related series of offered certificates—or, in the case of a sub-servicer, a consistent sub-servicing agreement—and, in particular, to act in accordance with the servicing standard described in the related prospectus supplement. You should consider, however, that if any of these parties or an affiliate owns certificates or has financial interests in

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or other financial dealings with any of the related borrowers, then it 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 or an affiliate thereof or any other related entity owns any certificates, and in particular a class of non-offered certificates, it could seek to mitigate the potential loss on its certificates from a troubled mortgage loan by delaying acceleration or other enforcement in the hope of realizing greater proceeds in the future. However, this action or failure to take immediate action by a special servicer could pose a greater risk to the trust and ultimately result in 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, a master servicer, special servicer or sub-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, special servicer or sub-servicer may be acting on behalf of parties with conflicting interests.

Property Managers and Borrowers May Each Experience Conflicts of Interest in Managing Multiple Properties.

In the case of many of the mortgage loans underlying the offered certificates, the related property managers and borrowers may experience conflicts of interest in the management and/or ownership of the related real properties because:

•  the real properties may be managed by property managers that are affiliated with the related borrowers;
•  the property managers also may manage additional properties, including properties that may compete with those real properties; or
•  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 real properties.

With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests

One or more mortgage loans underlying a series of offered certificates may each be part of a loan combination or split loan structure that includes one or more additional mortgage loans—not included in the related trust—that are secured by the same mortgage instrument(s) encumbering the same mortgaged property or properties, as applicable, as is the subject underlying mortgage loan. See ‘‘The Trust Fund—Mortgage Loans—Loan Combinations.’’ Pursuant to one or more co-lender or similar agreements, a holder of a particular non-trust mortgage loan in a subject loan combination, or a group of holders of non-trust mortgage loans in a subject loan combination (acting together), may be granted various rights and powers that affect the mortgage loan in that loan combination that is in our trust, including (a) cure rights with respect to the mortgage loan in our trust, (b) a purchase option with respect to the mortgage loan in our trust, (c) the right to advise, direct and/or consult with the applicable servicer regarding various servicing matters, including certain modifications, affecting that loan combination, and/or (d) the right to replace the applicable special servicer—without cause—with respect to that loan combination. In some cases, those rights and powers may be assignable or may be exercised through a representative or designee. In connection with exercising any of the foregoing rights afforded to it, the holder of any of the non-trust mortgage loans in a loan combination—or, if applicable, any representative, designee or assignee thereof with respect to the particular right—that includes a mortgage loan in our trust will likely not be an interested party with respect to the related series of certificates, will have no obligation to consider the interests of, or the impact of exercising such rights on, the related series of certificates and may have interests that conflict with your interests. If any such non-trust mortgage loan is included in a

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securitization, then the representative, designee or assignee exercising any of the rights of the holder of that non-trust mortgage loan may be a securityholder, an operating advisor, a controlling class representative or other comparable party or a servicer from that other unrelated securitization. You should expect that the holder or beneficial owner of a non-trust mortgage loan will exercise its rights and powers to protect its own economic interests, and will not be liable to the related series of certificateholders for so doing.

In addition, if any mortgage loan included in one of our trusts is part of a loan combination, then that mortgage loan may be serviced and administered pursuant to the servicing agreement for the securitization of a non-trust mortgage loan that is part of the same loan combination. Consequently, the certificateholders of the related series of certificates would have limited ability to control the servicing of that loan combination and the parties with control over the servicing of that loan combination may have interests that conflict with your interests. See ‘‘Description of the Governing Documents—Servicing Mortgage Loans That Are Part of a Loan Combination.’’

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 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.

Limited Information Causes Uncertainty

Some of the mortgage loans that will be included in our trusts are loans that were made to enable the related borrower to acquire the related real property. Accordingly, for some of these loans limited or no historical operating information is available with respect to the related real property. As a result, you may find it difficult to analyze the historical performance of those properties.

The Risk of Terrorism in the United States and Military Action May Adversely Affect the Value of the Offered Certificates and Payments on the Mortgage Assets

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 and/or consequent actions on the part of the United States Government and others, including military action, 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 mortgage loans underlying any series of offered certificates. 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.

As a result of the foregoing, defaults on commercial real estate loans could increase; and, regardless of the performance of the mortgage loans underlying any series of offered certificates, the liquidity and market value of those offered certificates may be impaired.

Problems with Book-Entry Registration

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

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•  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 and Definitive Certificates.’’

Lack of Liquidity Will Impair Your Ability to Sell Your Offered Certificates and May Have an Adverse Effect on the Market Value of 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. Furthermore, a particular investor or a few investors may acquire a substantial portion of a given class of offered certificates, thereby limiting trading in that class. 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 Offered Certificates May Be Adversely Affected by Factors Unrelated to the Performance of Your Offered Certificates and the Underlying Mortgage Assets, such as Fluctuations in Interest Rates and the Supply and Demand of CMBS Generally

The market value of your offered certificates can decline even if those certificates and the underlying mortgage assets are performing at or above your expectations.

The market value of your offered certificates will be sensitive to fluctuations in current interest rates. However, a change in the market value of your offered 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 offered certificates as a result of an equal but opposite movement in interest rates.

The market value of your offered 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 higher 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

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•  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.

If you decide to sell your offered certificates, you may have to sell at 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.

Certain Classes of the Offered Certificates are Subordinate to, and are Therefore Riskier than, One or More Other Classes of Certificates of the Same Series

If you purchase any offered certificates that are subordinate to one or more other classes of offered certificates of the same series, then your offered certificates will provide credit support to such other classes of certificates of the same series that are senior to your offered certificates. As a result, you will receive payments after, and must bear the effects of losses on the trust assets before, the holders of those other classes of certificates of the same series that are senior to your offered certificates.

When making an investment decision, you should consider, among other things—

•  the payment priorities of the respective classes of the certificates of the same series,
•  the order in which the principal balances of the respective classes of the certificates of the same series with balances will be reduced in connection with losses and default-related shortfalls, and
•  the characteristics and quality of the mortgage loans in the related trust.

Payments on the Offered Certificates Will Be Made Solely from the Limited Assets of the Related Trust, and Those Assets May Be Insufficient to Make All Required Payments on Those Certificates

The offered certificates will represent interests solely in, and will be payable solely from the limited assets of, the related trust. The offered certificates will not represent interests in or obligations of us, any sponsor or any of our or their respective affiliates, and no such person or entity will be responsible for making payments on the offered certificates if collections on the related trust assets are insufficient. No governmental agency or instrumentality will guarantee or insure payment on the offered certificates. Furthermore, some classes of offered certificates will represent a subordinate right to receive payments out of collections and/or advances on some or all of the related trust assets. 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.

Any Credit Support for Your Offered Certificates May Be Insufficient to Protect You Against All Potential Losses

The Amount of Credit Support Will Be Limited.    The rating agencies that assign ratings to your offered certificates will establish the amount of credit support, if any, for your offered certificates based on, among other things, an assumed level of defaults, delinquencies and losses with respect to the related mortgage assets. Actual losses may, however, exceed the assumed levels. See ‘‘Description of the Certificates—Allocation of Losses and Shortfalls’’ and ‘‘Description of Credit Support.’’ If actual losses on the related mortgage assets exceed the assumed levels, you may be required to bear the additional losses.

Credit Support May Not Cover All Types of Losses.    The credit support, if any, for your offered certificates may not cover all of your potential losses. For example, some forms of credit support may not cover or may provide limited protection against losses that you may suffer by reason of fraud or negligence or as a result of uninsured casualties at the real properties securing the underlying mortgage loans. You may be required to bear any losses which are not covered by the credit support.

Disproportionate Benefits May Be Given to Some Classes and Series to the Detriment of Others.    If a form of credit support covers multiple classes or series and losses exceed the amount of that credit

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support, it is possible that the holders of offered certificates of another series or class will be disproportionately benefited by that credit support to your detriment.

The Interests of Certain Certificateholders With Rights and Powers Over Certain Servicing Actions and to Cure and Purchase Certain Mortgage Loans May Be in Conflict with the Interests of the Offered Certificateholders of the Same Series

The holder(s) or beneficial owner(s) of all or a specified portion of particular certificates, or a particular group or class of certificates, of any series that includes offered certificates may be entitled to: (a) direct and advise the related master servicer and/or special servicer with respect to various actions, and subject to various conditions, that will be described in the related prospectus supplement, which actions may include specified servicing actions with respect to all or any one or more particular mortgage loans and/or foreclosure properties in the related trust;(b) replace the special servicer with respect to one or more mortgage loans and/or foreclosure properties in the related trust, subject to satisfaction of the conditions described in the related prospectus supplement; and (c) exercise cure rights and/or purchase options with respect to mortgage loans, or one or more particular mortgage loans, in the related trust as to which specified defaults have occurred or are reasonably foreseeable. Some of the foregoing rights and powers may be assignable or may be exercisable through a representative.

The certificateholders and/or certificate owners possessing—directly or through representatives— the rights and powers described above will generally be, at least initially, the holders or beneficial owners of non-offered certificates. Those certificateholders and/or certificate owners are therefore likely to have interests that conflict with those of the holders of the offered certificates of the same series. You should expect that those certificateholders and/or certificate owners—directly or through representatives—will exercise their rights and powers solely in their own best interests and will not be liable to the holders or beneficial owners of any other class of certificates of the subject series for so doing.

Additional Compensation to the Master Servicer and the Special Servicer and Interest on Advances Will Affect Your Right to Receive Distributions on Your Offered Certificates

To the extent described in the related prospectus supplement, the master servicer, the special servicer, the trustee and any fiscal agent will each be entitled to receive interest on unreimbursed advances made by that party with respect to the mortgage assets. This interest will generally accrue from the date on which the related advance was made or the related expense was incurred through the date of reimbursement. In addition, under certain circumstances, including a default by the borrower in the payment of principal and interest on a mortgage asset, that mortgage asset will become specially serviced and the related special servicer will be entitled to compensation for performing special servicing functions pursuant to the related governing document(s). The right to receive interest on advances or special servicing compensation is senior to the rights of certificateholders to receive distributions on the offered certificates. Thus, the payment of interest on advances and the payment of special servicing compensation may lead to shortfalls in amounts otherwise distributable on your offered certificates.

Inability to Replace the Master Servicer Could Affect Collections and Recoveries on the Mortgage Assets

The structure of the servicing fee payable to the master servicer might affect the ability to find a replacement master servicer. Although the trustee is required to replace the master servicer if the master servicer is terminated or resigns, if the trustee is unwilling (including for example because the servicing fee is insufficient) or unable (including for example, because the trustee does not have the systems to service mortgage loans), it may be necessary to appoint a replacement master servicer. Because the master servicing fee is structured as a percentage of the stated principal balance of each mortgage asset, it may be difficult to replace the servicer at a time when the balance of the mortgage loans has been significantly reduced because the fee may be insufficient to cover the costs associated with servicing the mortgage assets and/or related REO properties remaining in the mortgage pool. The performance of the mortgage assets may be negatively impacted, beyond the expected transition period during a servicing transfer, if a replacement master servicer is not retained within a reasonable amount of time.

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CAPITALIZED TERMS USED IN THIS PROSPECTUS

From time to time we use capitalized terms in this prospectus. Frequently used capitalized terms will have the respective meanings assigned to them in the ‘‘Glossary’’ attached to this prospectus.

THE TRUST FUND

Description of the Trust Assets

The trust assets backing a series of offered certificates will collectively constitute the related trust fund. Each such trust fund 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.

In addition to the asset classes described above in this ‘‘Description of the Trust Assets’’ section, we may include in the trust with respect to any series of offered certificates other asset classes, provided that such other asset classes in the aggregate do not exceed 10% by principal balance of the related asset pool. We will describe the specific characteristics of the mortgage assets and other asset classes underlying a series of offered certificates in the related prospectus supplement.

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.

Neither we nor any of our affiliates will guarantee payment on 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 payment on any of those mortgage assets.

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;

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•  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, such as 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 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 above under ‘‘Risk Factors—The Various Types of Multifamily and Commercial Properties that May Secure Mortgage Loans Underlying a Series of Offered Certificates May Present Special Risks’’ is a discussion of some of the various factors that may affect the value and operations of each of the indicated types of multifamily and commercial properties.

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.

Junior Mortgage Loans.    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 fund. 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 generally 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.

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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.

Delinquent Mortgage Loans.    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. Furthermore, delinquent mortgage loans will not constitute 20% or more, as measured by dollar volume, of the mortgage asset pool for a series of offered certificates as of the relevant measurement date.

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.

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;

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•  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
•  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, to the extent such information is not otherwise required to be included in the related prospectus supplement pursuant to the Securities Act, 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 following the issuance of those certificates.

In addition, with respect to any obligor or group of affiliated obligors with respect to any pool asset or group of pool assets, or property or group of related properties securing any pool asset or group of pool assets, if such pool asset or group of pool assets represents a material concentration within the mortgage asset pool, we will include in the related prospectus supplement financial statements or other financial information on the related real property or properties as required under the Securities Act and the Exchange Act.

Loan Combinations.    Certain of the mortgage loans included in one of our trust funds may be part of a loan combination. A loan combination will generally consist of the particular mortgage loan or loans that we will include in the subject trust fund and one or more other mortgage loans that we will not include in the trust fund. Each mortgage loan comprising a particular loan combination is evidenced by a separate promissory note. The aggregate debt represented by the entire loan combination, however, is secured by the same mortgage(s) or deed(s) of trust on the related mortgaged property or properties. The mortgage loans constituting a particular loan combination are obligations of the same borrower and, in general, are cross-defaulted. The allocation of payments to the respective mortgage loans comprising a loan combination, whether on a senior/subordinated or a pari passu basis (or some combination thereof), is either effected through a co-lender agreement or other intercreditor arrangement to which the respective holders of the subject promissory notes are parties and/or may be reflected in the subject promissory notes, a common loan agreement or other common loan document. Such co-lender agreement or other intercreditor arrangement will, in general, govern the respective rights of the noteholders, including in connection with the servicing of the respective mortgage loans comprising a loan combination. Further, each such co-lender agreement or other intercreditor arrangement may impose restrictions on the transferability of the ownership of any mortgage loan that is part of a loan combination. ‘‘Risk Factors—With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests.’’

Real Property and Other Collateral.    Following a foreclosure, acceptance of a deed in lieu of foreclosure or any enforcement action, trust assets may include real property or other collateral for a defaulted mortgage loan pending the liquidation of that collateral.

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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, or
•  will be exempt from the registration requirements of that Act, or
•  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;
•  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 Exchange Act, 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

We will generally acquire the mortgage assets to be included in our trusts from Lehman Brothers Holdings Inc. or another of our affiliates or from another seller of commercial and multifamily mortgage loans. We will then transfer those mortgage assets to the issuing entity for the related securitization transaction.

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. If the total outstanding principal balance of the related mortgage assets initially delivered by

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us to the related trustee is less than the initial total outstanding principal balance of any series of certificates, and if the subject securitization transaction contemplates a prefunding period, then we will 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—or such other period as may be specified in the related prospectus supplement—following the date of initial issuance of that series of certificates, which 90-day or other period will be the prefunding period, we or our designee 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.

If the subject securitization transaction involves a prefunding period, then we will indicate in the related prospectus supplement, among other things;

•  the term or duration of the prefunding period;
•  the amount of proceeds to be deposited in the related prefunding account and the percentage of the mortgage asset pool represented by those proceeds; and
•  any limitation on the ability to add pool 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.

For example, if a mortgage loan backing a series of offered certificates defaults, then it may be subject to (a) a purchase option on the part of another lender whose loan is secured by a lien on the same real estate collateral or by a lien on an equity interest in the related borrower, (b) a purchase option on the part of the holder(s) or beneficial owner(s) of all or a specified portion of particular certificates, or a particular group or class of certificates, of the subject series and/or (c) a fair value purchase option under the applicable governing document(s) for the subject securitization transaction or another servicing agreement. In some cases, those purchase options may be assignable or exercisable by a specified designee.

In addition, if so specified in the related prospectus supplement, a special servicer or other specified party for one of our trusts may be obligated, under the circumstances described in that prospectus supplement, to sell on behalf of the trust a delinquent or defaulted mortgage asset.

Further, if so specified in the related prospectus supplement, but subject to the conditions specified in that prospectus supplement, following the date on which the total principal balances of the offered certificates are reduced to zero, all of the remaining certificateholders (which may exclude any holders of a class of certificates evidencing a residual interest in a REMIC) of a given series of certificates, acting together, may exchange those certificates for all of the mortgage loans, REO properties and mortgage-backed securities remaining in the mortgage pool underlying those certificates.

If and to the extent described in the related prospectus supplement, we, a mortgage asset seller and/or another specified person or entity may make or assign to or for the benefit of one of our trusts various representations and warranties, or may be obligated to deliver to one of our trusts various documents, in either case relating to some or all of the mortgage assets transferred to that trust. Upon the discovery of a material breach of any such representation or warranty or a material defect with respect

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to those documents, in each case that is material and adverse in accordance with a standard set forth in the related prospectus supplement, we or such other party may be required, at our or its option, to either repurchase the affected mortgage asset(s) out of the related trust or to replace the affected mortgage asset(s) with other mortgage asset(s) that 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.

See also ‘‘Description of the Certificates—Termination and Redemption.’’

Cash, Accounts and Permitted Investments

The trust assets underlying a series of offered certificates will include cash from various sources, including initial deposits and payments and collections received or advanced on the related mortgage assets and other related trust assets.

The trust assets underlying a series of offered certificates will include one or more accounts established and maintained on behalf of the holders. All initial deposits, payments and collections received or advanced on the mortgage assets and other trust assets and other cash held by one of our trusts 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.

Funds on deposit in any account established and maintained on behalf of certificateholders may be invested in permitted investments. In the related prospectus supplement, we will provide a summary description of those permitted investments and identify the beneficiary of any interest and other income earned on funds in an account established and maintained on behalf of certificateholders.

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:

•  overcollateralization and/or excess cash flow;
•  the subordination of one or more other classes of certificates of the same series;
•  a letter of credit;
•  a surety bond;
•  an insurance policy;
•  a guarantee; 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 and, if applicable, we will identify the provider of that credit support. In addition, we will summarize in the related prospectus supplement how losses not covered by credit enhancement or support will be allocated to the subject series 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. For so long as it is in effect, a guaranteed investment contract will provide a specified rate of return on any and all moneys invested with the provider of that contract.

Trust assets may also include:

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•  interest rate exchange agreements;
•  interest rate cap agreements;
•  interest rate floor agreements; or
•  currency exchange agreements.

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.

TRANSACTION PARTICIPANTS

The Sponsor

General Character of the Sponsor’s Business.    Unless otherwise specified in the prospectus supplement, Lehman Brothers Holdings Inc. will act as the sole sponsor or a co-sponsor of the trust fund. Any other entity which acts as sponsor or co-sponsor with Lehman Brothers Holdings Inc. will be described in the prospectus supplement.

Lehman Brothers Holdings Inc., a Delaware corporation (‘‘Lehman Holdings’’), together with its subsidiaries and affiliates, are collectively referred to in this ‘‘—The Sponsor’’ section as ‘‘Lehman Brothers.’’ Lehman Brothers, through predecessor entities, was founded in 1850. Its executive offices are located at 745 Seventh Avenue, New York, New York 10019, U.S.A.

Lehman Brothers provides global financing services to corporations, governments and municipalities, institutional clients and individuals worldwide. Lehman Brothers provides a full array of equities and fixed income sales, trading and research, investment banking services and investment management and advisory services. It has global headquarters in New York, regional headquarters in London and Tokyo, and offices in additional locations in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman Brothers is a global market-maker in all major equity and fixed income products. To facilitate its market-making activities, Lehman Brothers is a member of all principal securities and commodities exchanges in the United States, as well as NASD, Inc., and it holds memberships or associate memberships on several principal international securities and commodities exchanges, including the London, Tokyo, Hong Kong, Frankfurt, Paris, Milan and Australian stock exchanges.

Lehman Brothers operates in the three business segments described below in this ‘‘—General Character of the Sponsor’s Business’’ section, which include investment banking, capital markets and investment management.

Investment Banking.    The investment banking business segment of Lehman Brothers is made up of ‘‘advisory services’’ and ‘‘global finance’’ activities that serve Lehman Brothers’ corporate and government clients. The investment banking segment is organized into several global industry groups, which consist of communications, consumer/retailing, financial institutions, financial sponsors, healthcare, industrial, media, natural resources, power, real estate and technology, each of which include bankers with industry specific knowledge and expertise geared to meeting clients’ objectives. Specialized product groups within ‘‘advisory services’’ include mergers and acquisitions and restructuring. ‘‘Global finance’’ includes underwriting, private placements, leveraged finance and other activities associated with debt and equity products. Product groups are partnered with relationship managers in the global industry groups to provide comprehensive financial solutions for clients.

Capital Markets

General.    The capital markets business segment includes institutional customer-flow activities, prime brokerage, research, and secondary-trading and financing activities in fixed income and equity products. These products include a wide range of cash, derivative, secured financing and structured

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instruments and investments. Lehman Brothers is a global market-maker in numerous equity and fixed income products including U.S., European and Asian equities, government and agency securities, money market products, corporate high grade, high yield and emerging market securities, mortgage- and asset-backed securities, preferred stock, municipal securities, bank loans, foreign exchange, financing and derivative products. Lehman Brothers is one of the largest investment banks in terms of U.S. and pan-European listed equities trading volume, and Lehman Brothers maintains a major presence in over-the-counter U.S. stocks, major Asian large capitalization stocks, warrants, convertible debentures and preferred issues. In addition, the secured financing business manages Lehman Brothers’ equity and fixed income matched book activities, supplies secured financing to institutional clients and customers, and provides secured funding for Lehman Brothers’ inventory of equity and fixed income products. The capital markets segment also includes proprietary activities as well as investing in real estate and private equity.

Mortgage- and Asset-Backed Securities.    Lehman Brothers is an underwriter of and market-maker in residential and commercial mortgage-and asset-backed securities and is active in all areas of secured lending, structured finance and securitized products. Lehman Brothers underwrites and makes markets in the full range of U.S. agency-backed mortgage products, mortgage-backed securities, asset-backed securities and whole loan products. It is also active in the global market for residential and commercial mortgages (including multi-family financing) and leases. Lehman Brothers originates commercial and residential mortgage loans through Lehman Holdings and Lehman Brothers Bank, FSB, and other subsidiaries in the U.S., Europe and Asia. Lehman Brothers Bank, FSB offers traditional and online mortgage and banking services nationally to individuals as well as institutions and their customers. Lehman Brothers Bank, FSB is a major part of Lehman Brothers’ institutional mortgage business, providing an origination pipeline for mortgages and mortgage-backed securities.

Investment Management.    The investment management business segment consists of Lehman Brothers’ global ‘‘private investment management’’ and ‘‘asset management’’ businesses. Private investment management provides comprehensive investment, wealth advisory and capital markets execution services to high-net-worth individuals and businesses, leveraging all the resources of Lehman Brothers. Asset management provides proprietary asset management products across traditional and alternative asset classes, through a variety of distribution channels, to individuals and institutions. It includes both the Neuberger Berman and Lehman Brothers Asset Management brands as well as Lehman Brothers’ Private Equity business.

The Sponsor’s Securitization Program

Lehman Holdings, together with its affiliates, engages in mortgage- and asset-backed securitizations and other structured financing arrangements. Lehman Holdings has been engaged in the securitization of assets since 1987 and in the securitization of commercial mortgage loans since 1991.

Lehman Holdings and its affiliates, directly or through correspondents, also originate multifamily and commercial mortgage loans throughout the United States and abroad. Lehman Holdings and its affiliates have been engaged in the origination of commercial mortgage loans since 1994. The multifamily and commercial mortgage loans originated and securitized by Lehman Holdings and its affiliates include both fixed-rate loans and floating-rate loans and both conduit balance loans and large balance loans. Most of the multifamily and commercial mortgage loans included in commercial mortgage securitizations sponsored by Lehman Holdings and its affiliates have been originated, directly or through correspondents, by Lehman Holdings or an affiliate.

In addition, in the normal course of its securitization program, Lehman Holdings and its affiliates, including Lehman Bank, FSB, may also acquire multifamily and commercial mortgage assets from various third-party originators. These mortgage loans may have been originated using underwriting guidelines not established by Lehman Holdings or any of its affiliates. The trust fund relating to a series of offered certificates may include mortgage loans originated by one or more of these third parties.

Lehman Holdings and its affiliates may also originate mortgage loans in conjunction with third-party correspondents and, in those cases, the third-party correspondents would perform the underwriting based

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on various criteria established or reviewed by Lehman Holdings, and Lehman Holdings or an affiliate would originate the subject mortgage loan on a specified closing date prior to inclusion in the subject securitization.

In connection with its commercial mortgage securitization transactions, Lehman Holdings or an affiliate generally transfers the mortgage assets to the depositor, who then transfers such assets to the issuing entity for the related securitization. In return for the transfer of the mortgage assets by the depositor to the issuing entity, the issuing entity issues commercial mortgage pass-through certificates backed by, and supported by the cash flows generated by, those mortgage assets.

Lehman Holdings and its affiliates also work with rating agencies, mortgage loan sellers and servicers in structuring the securitization transaction. Lehman Holdings will generally act as sponsor, originator and mortgage loan seller in its commercial mortgage securitization transactions. With respect to certain of its commercial mortgage securitization transactions, there may be a co-sponsor and/or other mortgage loan sellers and originators. We will identify any co-sponsor in the related prospectus supplement. Neither Lehman Holdings nor any of its affiliates acts as servicer of the multifamily and commercial mortgage loans in its commercial mortgage securitizations. Instead, Lehman Holdings and/or the related depositor contract with other entities to service the multifamily and commercial mortgage loans on its behalf.

If and to the extent that we agree under the applicable Governing Document to deliver certain mortgage loan documents to the trustee or the applicable servicer or to effect certain filings of and/or certain recordations of mortgage loan documents or assignments thereof, Lehman Holdings. or, in some cases, an affiliate, will have a corresponding obligation to deliver those mortgage loan documents to the trustee or the applicable servicer and to effect such filings of and/or recordations of such mortgage loan documents or assignments, generally pursuant to a mortgage loan purchase agreement between us and one or more Lehman Holdings entities. See ‘‘Description of the Governing Documents—Assignment of Mortgage Assets.’’

If and to the extent that we make representations and warranties to the trustee regarding any one or more of the mortgage assets included in a commercial mortgage securitization, generally pursuant to the applicable Governing Document, Lehman Holdings or, in some cases, an affiliate will make corresponding representations and warranties to us regarding those mortgage assets, generally pursuant to a mortgage loan purchase agreement between us and Lehman Holdings and/or an affiliate thereof. See ‘‘Description of the Governing Documents—Representations and Warranties with Respect to Mortgage Assets.’’

If it is later determined that any mortgage asset contributed by Lehman Holdings or an affiliate thereof fails to conform to the specified representations and warranties or there is a defect in or an omission with respect to certain specified documents related to that mortgage asset, which breach, defect or omission, as the case may be, is determined to have a material adverse effect on the value of the subject mortgage asset or such other standard as is described in the related prospectus supplement, and if we are required to repurchase such mortgage asset from the trustee, cure the subject breach, defect or omission or pay a loss of value amount with respect to the subject defect, breach or omission, then Lehman Holdings or such affiliate will generally have a corresponding obligation to repurchase such mortgage asset from us, cure the subject breach, defect or omission or pay a loss of value amount with respect to the subject defect, breach or omission, as the case may be.

Underwriting Standards.

General.    Set forth below is a discussion of certain general underwriting guidelines of Lehman Holdings with respect to multifamily and commercial mortgage loans originated by Lehman Holdings. In the case of a multifamily or commercial mortgage loan originated by Lehman Holdings through a correspondent, that correspondent generally collects certain relevant information for analysis by Lehman Holdings, and assists in the origination of the subject mortgage loan on documents approved by Lehman Holdings. The underwriting guidelines described below generally do not apply to multifamily and commercial mortgage loans acquired by Lehman Holdings or its affiliates from third-party originators.

Notwithstanding the discussion below, given the unique nature of income-producing real properties, the underwriting and origination procedures and the credit analysis with respect to any particular

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multifamily or commercial mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, physical quality, size, environmental condition, location, market conditions, capital reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship and/or performance history. Consequently, there can be no assurance that the underwriting of any particular multifamily or commercial mortgage loan will conform to the general guidelines described in this ‘‘—Underwriting Standards’’ section.

Loan Analysis.    Lehman Holdings credit underwriting is generally performed by Lehman Holdings risk-management employees. Lehman Holdings performs both a credit analysis and a collateral analysis with respect to each multifamily and commercial mortgage loan it originates. The credit analysis of the borrower includes a review of third-party credit reports, reports resulting from judgment, lien, bankruptcy and pending litigation searches and, if applicable, the loan payment history of the borrower and principals of the borrower. Generally, borrowers are required to be single-purpose entities, although exceptions are made, particularly with respect to mortgage loans that are in the amount of $15,000,000 or less. The collateral analysis includes an analysis, in each case to the extent available, of the historical property operating statements, rent rolls and a projection of future performance and a review of tenant leases. With respect to certain large balance mortgage loans or investment grade rated mortgage loans, historical cash flow verification may be performed by staff of a ‘‘big four’’ accounting firm and reviewed by Lehman Holdings’ underwriting staff. Depending on the type of real property collateral involved and other relevant circumstances, Lehman Holdings’ underwriting staff and/or legal counsel will review leases of significant tenants. Lehman Holdings also performs a limited qualitative review with respect to certain tenants located at the real property collateral, particularly significant tenants, credit tenants and sole tenants. Lehman Holdings generally requires third-party appraisals, as well as environmental reports, building condition reports and seismic reports, if applicable. Each report is reviewed for acceptability by a Lehman Holdings staff member and the staff member approves or rejects the report. The results of these reviews are incorporated into the underwriting report.

Loan Approval.    Prior to commitment, all multifamily and commercial mortgage loans to be originated by Lehman Holdings must be approved by one or more—depending on loan size—specified officers of Lehman Holdings. The officer or officers responsible for loan approval may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.

Debt Service Coverage Ratio.    The repayment of a multifamily or commercial mortgage loan is typically dependent upon the successful operation of the related real property collateral and the ability of that property to generate income sufficient to make payments on the loan. Accordingly, in connection with the origination of any multifamily or commercial mortgage loan, Lehman Holdings will analyze whether cash flow expected to be derived from the subject real property collateral will be sufficient to make the required payments under that mortgage loan. 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 collateral for a 12-month period that is available to pay debt service on the subject mortgage loan, to
•  the annualized payments of principal and/or interest on the subject mortgage loan and any other loans that are secured by liens of senior or equal priority on the related real property collateral.

However, the amount described in the first bullet of the preceding sentence is often a highly subjective number based on variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral.

For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, Lehman Holdings may utilize annual net cash flow that was calculated based on assumptions regarding projected rental income, expenses and/or occupancy, including, without limitation, one or more of the following:

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•  the assumption that a particular tenant at the subject real property collateral that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date;
•  the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject real property collateral or is out for signature will be executed and in place on a future date;
•  the assumption that a portion of currently vacant and unleased space at the subject real property collateral will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market;
•  the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date;
•  assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject real property collateral and the anticipated effect on capital and re-leasing expenditures; and
•  various additional lease-up assumptions and other assumptions regarding the payment of rent not currently being paid.

There is no assurance that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance.

Although frequently the debt service coverage ratio for multifamily and commercial mortgage loans originated by Lehman Holdings, calculated as described above, is not below 1.20x (subject to the discussion under ‘‘—Additional Debt’’ below), exceptions are made when consideration is given to circumstances particular to the mortgage loan or related real property collateral. For example, Lehman Holdings may originate a multifamily or commercial mortgage loan with a debt service coverage ratio below 1.20x based on, among other things, amortization features of the subject mortgage loan, the type of tenants and leases at the subject real property collateral, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Lehman Holdings’ judgment of improved property performance in the future and/or other relevant factors.

We expect to provide in the related prospectus supplement debt service coverage ratios for most mortgage loans backing a series of offered certificates and a more detailed discussion of the calculation of net cash flow used in determining those debt service coverage ratios.

Loan-to-Value Ratio.    Lehman Holdings also looks at the loan-to-value ratio of a prospective multifamily or commercial mortgage loan in evaluating the likelihood of recovery if a property is liquidated following a default. In general, the loan-to-value ratio of a multifamily or commercial mortgage loan at any given time is the ratio, expressed as a percentage, of—

•  the then outstanding principal balance of the mortgage loan and any other senior or pari passu loans that are secured by the related real property collateral, to
•  the estimated value of the related real property collateral based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation.

Although frequently the loan-to-value ratio for multifamily and commercial mortgage loans originated by Lehman Holdings, calculated as described above, is not above 80% (subject to the discussion under ‘‘—Additional Debt’’ below), exceptions are made when consideration is given to circumstances particular to the mortgage loan or related real property collateral. For example, Lehman Holdings may originate a multifamily or commercial mortgage loan with a loan-to-value ratio above 80% based on, among other things, amortization features of the subject mortgage loan, the type of tenants and leases at the subject real property collateral, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Lehman Holdings’ judgment of improved property performance in the future and/or other relevant factors.

We expect to provide in the related prospectus supplement loan-to-value ratios for most mortgage loans backing a series of offered certificates and the property valuation used in determining those loan-to-value ratios.

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Additional Debt.    When underwriting a multifamily or commercial mortgage loan, Lehman Holdings will take into account whether the subject real property collateral and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject mortgage loan. It is possible that Lehman Holdings or an affiliate will be the lender on that additional debt.

The debt service coverage ratios described above under ‘‘—Debt Service Coverage Ratio’’ and the loan-to-value ratios described above under ‘‘—Loan-to-Value Ratio’’ may be below 1.20x and above 80%, respectively, based on the existence of additional debt secured by the related real property collateral or directly or indirectly by equity interests in the related borrower.

Assessments of Property Condition.    As part of the underwriting process, Lehman Holdings will analyze the condition of the real property collateral for a prospective multifamily or commercial mortgage loan. To aid in that analysis, Lehman Holdings may, subject to certain exceptions, inspect or retain a third party to inspect the property and will obtain the property assessments and reports described below.

Appraisals.    Lehman Holdings will, in most cases, require that the real property collateral for a prospective multifamily or commercial mortgage loan be appraised by a state certified appraiser or an appraiser belonging to the Appraisal Institute, a membership association of professional real estate appraisers. In addition, Lehman Holdings will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. In some cases, however, Lehman Holdings may establish the value of the subject real property collateral based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.

Environmental Assessment.    Lehman Holdings will, in most cases, require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, Lehman Holdings may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, Lehman Holdings might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water will usually be conducted only at multifamily rental properties and only when Lehman Holdings or the environmental consultant believes that such an analysis is warranted under the circumstances.

Depending on the findings of the initial environmental assessment, Lehman Holdings may require additional environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral.

Engineering Assessment.    In connection with the origination process, Lehman Holdings will, in most cases, require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, Lehman Holdings will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.

Seismic Report.    If the subject real property collateral includes any material improvements and is located in California or in seismic zones 3 or 4, Lehman Holdings may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, Lehman Holdings may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price. It should be noted, however, that because the seismic assessments may not necessarily have used the same assumptions in assessing probable maximum

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loss, it is possible that some of the real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.

Zoning and Building Code Compliance.    In connection with the origination of a multifamily or commercial mortgage loan, Lehman Holdings will generally examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.

Where a property as currently operated is a permitted nonconforming use and/or structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, Lehman Holdings will analyze whether—

•  any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring;
•  casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by Lehman Holdings to be sufficient to pay off the related mortgage loan in full;
•  the real property collateral, if permitted to be repaired or restored in conformity with current law, would in Lehman Holdings’ judgment constitute adequate security for the related mortgage loan; and/or
•  to require the related borrower to obtain law and ordinance insurance.

Escrow Requirements.    Based on its analysis of the real property collateral, the borrower and the principals of the borrower, Lehman Holdings may require a borrower under a multifamily or commercial mortgage loan to fund various escrows for taxes and/or insurance, capital expenses, replacement reserves and/or environmental remediation. Lehman Holdings conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by Lehman Holdings. Furthermore, Lehman Holdings may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a parent guarantee or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed.

Notwithstanding the foregoing discussion under this ‘‘—The Sponsor—Underwriting Standards’’ section, we may purchase mortgage loans for inclusion in a trust fund which vary from, or do not comply with, Lehman Holding’s underwriting guidelines. In addition, in some cases, Lehman Holding’s and/or its affiliates may not have strictly applied these underwriting guidelines as the result of a case by case permitted exception based upon other compensating factors.

The Depositor

We are Structured Asset Securities Corporation II, the depositor with respect to each series of certificates offered by this prospectus. We were incorporated in the state of Delaware on October 25, 2002. We are a wholly owned, direct subsidiary of Lehman Commercial Paper Inc. Lehman Commercial Paper Inc. is a wholly-owned, direct subsidiary of Lehman Brothers Inc., which is a wholly owned, direct subsidiary of Lehman Brothers Holdings Inc. Our principal executive offices are located at 745 Seventh Avenue, New York, New York 10019. Our telephone number is 212-526-7000. There can be no assurance that at any particular time we will have any significant assets.

We do not file with the SEC annual reports on Form 10-K or any other reports with respect to ourselves or our financial condition pursuant to Section 13(a) or 15(d) of the Exchange Act.

We were organized, among other things, for the purposes of:

•  acquiring, holding, transferring and assigning mortgage loans, or interests in those loans, secured by first or junior liens on commercial and multifamily real properties;

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•  acquiring, holding, transferring and assigning mortgage-backed securities that evidence interests in mortgage loans that are secured by commercial and multifamily real properties;
•  forming pools of mortgage loans and mortgage-backed securities; and
•  acting as depositor of one or more trusts formed to issue, sell and deliver bonds, certificates of interest or other evidences of indebtedness that are secured by a pledge or assignment of, or represent interests in, pools of mortgage loans and mortgage-backed securities; and
•  doing all such things as are reasonable or necessary to enable us to carry out any of the above, including entering into loan agreements, servicing agreements and reimbursements agreements and selling certificates of interest in any trust for which we serve as depositor.

Since our incorporation in 2002, we have been engaged in the securitization of commercial and multifamily mortgage loans and in acting as depositor of one or more trusts formed to issue commercial mortgage pass-through certificates that are secured by or represent interests in, pools of mortgage loans. We generally acquire the commercial and multifamily mortgage loans from Lehman Holdings or another of our affiliates or from another seller of commercial and multifamily mortgage loans, in each case in privately negotiated transactions.

After the issuance of a series of offered certificates, we may be required, to the extent specified in the related Governing Document, to perform certain actions on a continual basis, including but not limited to:

•  with respect to any mortgage loans contributed by Lehman Holdings or another of our affiliates, the delivery of mortgage loan documents and certain assignments thereof to the trustee and/or the master servicer, as described under ‘‘Description of the Governing Documents—Assignment of the Mortgage Assets;’’
•  with respect to any mortgage loans contributed by Lehman Holdings or another of our affiliates, upon the discovery of a material breach of any representation or warranty made by us, or a material defect or omission with respect to certain specified mortgage loan documents delivered by us, if that breach, defect or omission is material and adverse in accordance with a standard set forth in the related prospectus supplement, to effect a remedy for that breach or defect, which may include, at our option, making a partial loss of value payment to the trust, effecting a partial cure, repurchasing such mortgage loan out of the trust or substituting another qualifying mortgage loan, as further described in the related prospectus supplement;
•  to remove the trustee upon the occurrence of certain specified events, including certain events of bankruptcy or insolvency, failure to deliver certain required reports or imposition of a tax upon the trust fund, and thereupon appoint a successor trustee;
•  to appoint a successor trustee in the event the trustee resigns, is removed or becomes ineligible to continue serving in such capacity under the related Governing Document;
•  to provide the trustee, the master servicer or the special servicer with any reports, certifications and information, other than with respect to the mortgage loans, that it may reasonably require to comply with the terms of the related Governing Document;
•  to provide to the related tax administrator in respect of the related trust such information as it may reasonably require to perform its reporting and other tax compliance obligations under the related Governing Document; and
•  to terminate at any time the agency of any tax administrator and to appoint a successor tax administrator upon such termination or upon the resignation of the tax administrator.

Generally, however, it is expected that the functions and/or duties set out under this ‘‘—The Depositor’’ section will be performed by our agents or affiliates.

The Issuing Entity

The issuing entity with respect to each series of offered certificates is the entity that will own and hold the related mortgage assets and in whose name those certificates will be issued. Each issuing entity will

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be a statutory trust or a common law trust organized at our direction under the laws of the State of New York or another jurisdiction specified in the related prospectus supplement. As described in the related prospectus supplement, the Governing Document for each series of offered certificates will set forth the permissible activities and restrictions on the activities of the related issuing entity and will govern the servicing and administration of the related trust assets. Each series of offered certificates will represent interests only in, and be payable solely from assets of, the related trust. However, a series of offered certificates may be issued together with other certificates of the same series, which other certificates will not be offered pursuant to this prospectus. Accordingly, the assets of one of our trusts may back one or more classes of certificates other than the related offered certificates. The trust assets for each series will be held by the related trustee for the benefit of the related certificateholders.

The Originators

Some or all of the mortgage loans included in one of our trusts may be originated by Lehman Brothers Holdings Inc. or by one of our other affiliates. In addition, there may be other third-party originators of the mortgage loans backing a series of offered certificates. Accordingly, we will acquire each of the mortgage loans to be included in one of our trusts from the originator or a subsequent assignee, in privately negotiated transactions. See ‘‘—The Sponsor’’ above. We will identify in the related prospectus supplement for each series of offered certificates any originator or group of affiliated originators—apart from a sponsor and/or its affiliates—that originated or is expected to originate mortgage loans representing 10% or more of the related mortgage asset pool, by balance.

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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, one or more master servicers and one or more special servicers. 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 the subject series of offered certificates.

If we so specify in the related prospectus supplement, the originator of the mortgage assets or a party from whom we acquire mortgage assets or one of their respective affiliates may perform the functions of master servicer, special servicer, sub-servicer or manager for the trust to which we transfer those assets. 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 ‘‘Transaction Participants—The Depositor.’’

Assignment of Mortgage Assets

At the time of initial issuance of any series of offered certificates, we will acquire and assign, or cause to be directly assigned, to the designated trustee those mortgage assets and any other assets to be included in the related trust fund. 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,

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3.  the remaining term to maturity,
4.  if the mortgage loan is a balloon loan, the remaining amortization term, 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.

Representations and Warranties with Respect to Mortgage Assets

If and to the extent set forth in the prospectus supplement for any series of offered certificates, we will, with respect to each mortgage asset in the related trust, make or assign, or cause to be made or assigned, a limited set of representations and warranties covering, by way of example:

•  the accuracy of the information set forth for each mortgage asset on the schedule of mortgage assets appearing as an exhibit to the Governing Document for that series;
•  the warranting party’s title to each mortgage asset and the authority of the warranting party to sell that mortgage asset; and
•  in the case of a mortgage loan—
1.  the enforceability of the related mortgage note and mortgage,
2.  the existence of title insurance insuring the lien priority of the related mortgage, and
3.  the payment status of the mortgage loan.

We will identify the warranting party, and give a more detailed summary of the representations and warranties made thereby, in the related prospectus supplement. In most cases, the warranting party will be a prior holder of the particular mortgage assets. We will also specify in the related prospectus supplement any remedies against the warranting party available to the related certificateholders, or the related trustee on their behalf, in the event of a material breach of any of those representations and warranties.

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 those collection procedures as are consistent with the servicing standard set forth in the related Governing Document. 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:

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•  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 may also provide that if, in the judgment of the related master servicer or other specified party, a payment default or a material non-monetary default is reasonably foreseeable, the related master servicer may elect or be required 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.

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 period within which a special servicer can—

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•  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.

If and to the extent set forth 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.

Servicing Mortgage Loans That Are Part of a Loan Combination

One or more of the mortgage loans that are included in any of our trusts may be part of a loan combination as described under ‘‘The Trust Fund—Mortgage Loans—Loan Combinations.’’ With respect to any of those mortgage loans, the entire loan combination may be serviced under the applicable Governing Document for our trust, in which case the servicers under that Governing Document will have to service the loan combination with regard to and considering the interests of the holders of the non-trust mortgage loans included in the related loan combination. With respect to one or more other mortgage loans in any of our trusts that are part of a loan combination, the entire loan combination may be serviced under a servicing agreement for the securitization of a related non-trust loan in that loan combination, in which case our servicers and the certificateholders of the related series of certificates will have limited ability to control the servicing of those mortgage loans. In any event, the related non-trust mortgage loan noteholders may be permitted to exercise certain rights and direct certain servicing actions with respect to the entire loan combination, including the mortgage loan in one of our trusts. See ‘‘Risk Factors—With Respect to Certain Mortgage Loans Included in Our Trusts, the Mortgaged Property or Properties that Secure the Subject Mortgage Loan in the Trust Also Secure One or More Related Mortgage Loans That Are Not in the Trust; The Interests of the Holders of Those Non-Trust Mortgage Loans May Conflict with Your Interests.’’

Sub-Servicers

A master servicer or special servicer may delegate its servicing obligations to one or more third-party servicers and sub-servicers. In addition, an originator or a seller of a mortgage loan may act as sub-servicer

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with respect to that mortgage loan after it is included in one of our trusts. A sub-servicer with respect to a particular mortgage loan will often have direct contact with the related borrower and may effectively perform all of the related servicing functions (other than special servicing functions), with related collections and reports being forwarded by the sub-servicer to the master servicer for aggregation of such items with the remaining mortgage pool. However, unless we specify otherwise in the related prospectus supplement, the master servicer or special servicer will remain obligated for performance of the delegated duties under the related Governing Document. Each sub-servicing agreement between a master 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.

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 related trust, through the master servicer or special servicer, as the case may be, that retained it, for expenditures that it makes, generally to the same extent that such master servicer or special servicer, as the case may be, would be reimbursed under the related Governing Document.

We will identify in the related prospectus supplement any sub-servicer that, at the time of initial issuance of the subject offered certificates, is affiliated with us or with the issuing entity or any sponsor for the subject securitization transaction or is expected to be a servicer of mortgage loans representing 10% or more of the related mortgage asset pool, by balance.

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.

Advances

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 the mortgage loans included in the subject securitization 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

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•  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 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.

Matters Regarding the Master Servicer, the Special Servicer, the Manager and Us

Unless we specify otherwise in the related prospectus supplement, the master servicer, special servicer or manager for any of our trusts may each resign from its obligations in that capacity, 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. The appointment of a successor master servicer may require our consent, but if we have not responded to a request for consent to a successor within the requisite time period, that consent may be deemed to have been given. If the duties of the master servicer or the special servicer are transferred to a successor thereto, the master servicing fee and the special servicing fee and, except as otherwise described in the related prospectus supplement, any workout fee and/or any liquidation fee, as applicable, that accrues or otherwise becomes payable under the Governing Document from and after the date of such transfer will be payable to such successor. The Governing Document will require the resigning master servicer or special servicer to pay all costs and expenses in connection with such resignation and the resulting transfer of servicing.

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, any master servicer, special servicer or manager for one of our trusts, or any of our or their 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. However, subject to any exceptions disclosed in the related prospectus supplement, neither we nor any of those other parties to the related Governing Document will be protected against any liability that would otherwise be imposed by reason of—

•  willful misfeasance, bad faith or gross negligence in the performance of obligations or duties under the related Governing Document for any series of offered certificates, or
•  reckless disregard of those obligations and duties.

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

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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 legal action or claim that relates to that Governing Document or series of offered certificates or to the related trust. However, subject to any exceptions disclosed in the related prospectus supplement, the indemnification will not extend to any such 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 or claim 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 or claim against the relevant party resulting from any willful misfeasance, bad faith or gross negligence in the performance of obligations or duties under that Governing Document or reckless disregard of those obligations and duties.

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 Governing 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, or
•  resulting from any merger or consolidation to which we or any related master servicer, special servicer or manager is a party, or
•  succeeding to all or substantially all of 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.

Compensation arrangements for a master servicer, special servicer or manager for one of our trusts may vary from securitization transaction to securitization transaction. 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. In general, the Governing Document for each series of offered certificates will provide that if the defaulting party is terminated as a result of any such

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event of default, and if a non-defaulting party to that Governing Document incurs any costs or expenses in connection with the termination of the defaulting party and the transfer of the defaulting party’s duties under that Government Document, then those costs and expenses of such non-defaulting party must be borne by the defaulting party, and if not paid by the defaulting party within 90 days after the presentation of reasonable documentation of such costs and expenses, such non-defaulting party will be entitled to indemnification for those costs and expenses from the related trust fund, although the defaulting party will not thereby be relieved of its liability for those costs and expenses.

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 with the description of that document set forth in this prospectus or the related prospectus supplement;
3.  to add 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 the extent applicable, to relax or eliminate any requirement under the Governing Document imposed by the provisions of the Internal Revenue Code relating to REMICs or grantor trusts if the provisions of the Internal Revenue Code are amended or clarified so as to allow for the relaxation or elimination of that requirement;
5.  to relax or eliminate any requirement under the Governing Document imposed by the Securities Act, or the rules under that Act if that Act or those rules are amended or clarified so as to allow for the relaxation or elimination of that requirement;
6.  to comply with any requirements imposed by the Internal Revenue Code or any final, temporary or, in some cases, proposed regulation, revenue ruling, revenue procedure or other written official announcement or interpretation relating to federal income tax laws, or to avoid a prohibited transaction or reduce the incidence of any tax that would arise from any actions taken with respect to the operation of any REMIC or grantor trust created under the Governing Document;
7.  to the extent applicable, to modify, add to or eliminate the transfer restrictions relating to the certificates which are residual interests in a REMIC;
8.  to further clarify or amend any provision of the Governing Document to reflect the new agreement between the parties regarding SEC reporting and filing obligations and related matters; or
9.  to otherwise modify or delete existing provisions of the Governing Document.

However, no such amendment of the Governing Document for any series of offered certificates that is covered solely by clauses 3. or 8. above, may adversely affect in any material respect the interests of any holders of offered or non-offered certificates of that series. In addition, if the related trust is intended to be a ‘‘qualifying special purpose entity’’ under FASB 140, then no such amendment may significantly change the activities of the related trust.

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 66 2/3%, or any other percentage specified in the related prospectus supplement, of all the voting rights allocated to those classes of that series that are 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 that are required to be distributed on any offered or non-offered certificate of that series without the consent of the holder of that certificate; or

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•  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; or
•  if the related trust is intended to be a ‘‘qualifying special purpose entity’’ under FASB 140, significantly change the activities of the related trust without the consent of the holders of offered and/or non-offered certificates of that series representing, in total, not less than 51% of the voting rights for that series, not taking into account certificates of that series held by us or any of our affiliates or agents; or
•  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
•  modify the specified percentage of voting rights which is required to be held by certificateholders to consent, approve or object to any particular action under the Governing Document without the consent of the holders of all offered and non-offered certificates of that series then outstanding.

List of Certificateholders

Upon written request of three or more certificateholders of record of any series made for purposes of communicating with other holders of certificates of the same series with respect to their rights under the related Governing Document, the related trustee or other certificate registrar of that series will afford the requesting certificateholders access during normal business hours to the most recent list of certificateholders of that series. However, the trustee may first require a copy of the communication that the requesting certificateholders propose to send.

Eligibility Requirements for the Trustee

The trustee for each series of offered certificates will be named in the related prospectus supplement.

The trustee for a series of offered certificates is at all times required to be a bank, banking association, banking corporation or trust company organized and doing business under the laws of the U.S. or any State of the U.S. or the District of Columbia. In addition, the trustee must at all times—

•  be authorized under those laws to exercise trust powers;
•  with limited exception, have a combined capital and surplus of at least $50,000,000; and
•  be subject to supervision or examination by a federal or state banking authority.

If the bank, banking association, banking corporation or trust company in question 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 bank, banking association, banking corporation or trust company will be deemed to be its combined capital and surplus as described in its most recent published report of condition.

The 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 Governing Document and its affiliates.

Duties of the Trustee

If no event of default has occurred and is continuing under the related Governing Document, the trustee for a 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.

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The trustee for a 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.

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. However, the trustee will remain responsible for the acts and omissions of any such agent or attorney acting within the scope of its employment to the same extent as it is responsible for its own acts and omissions under the related Governing Document.

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 trust assets. All rights, powers, duties and obligations conferred or imposed upon the trustee will then be conferred or imposed upon the trustee and the separate trustee or co-trustee jointly. In any jurisdiction in which the trustee is incompetent or unqualified to perform some acts, all rights, powers, duties and obligations conferred or imposed upon the trustee will then be conferred or imposed singly upon the separate trustee, which or co-trustee will exercise and perform its rights, powers, duties and obligations solely at the direction of the trustee.

Rights, Protections, Indemnities and Immunities of 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 out of the related trust assets.

The trustee for each series of offered certificates and each of its directors, officers, employees and agents will be entitled to indemnification, out of related trust assets, for any loss, liability or expense incurred by that trustee or any of those other persons in connection with that trustee’s acceptance or administration of its trusts under the related Governing Document. However, the indemnification of a trustee or any of its directors, officers, employees and agents will not extend to any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence on the part of the trustee in the performance of its obligations and duties 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, or within the discretion or rights or powers conferred on it, by the related Governing Document. Furthermore, no trustee for any series of offered certificates will be liable for an error in judgment, unless the trustee was negligent in ascertaining the pertinent facts.

The trustee for a series of offered certificates may rely upon and will be protected in acting or refraining from acting upon any resolution, officer’s certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties. In addition, the trustee for a series of offered certificates may consult with counsel and the written advice of such counsel or any opinion of counsel will be full and complete authorization and protection in respect of any action taken or suffered or omitted by it under the related Governing Document in good faith and in accordance therewith.

No trustee for any series of offered certificates will be under any obligation to exercise any of the trusts or powers vested in it by the related Governing Document, or to make any investigation of matters arising under that Governing Document or to institute, conduct or defend any litigation under or in relation to that Governing Document, at the request, order or direction of any of the certificateholders of that series, pursuant to the provisions of that Governing Document, unless those certificateholders have offered the trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred as a result.

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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 protections, immunities and indemnities afforded to the trustee for one of our trusts will also be available to it in its capacity as, and to any other person or entity appointed by it to act as, authenticating agent, certificate registrar, tax administrator and custodian for that trust.

Resignation and Removal of the Trustee

The trustee for any series of offered certificates may resign at any time by giving written notice thereof to, among others, us. Upon receiving that notice, we will be obligated to appoint a successor to a resigning trustee. If no successor trustee has been appointed and has accepted appointment within 30 days after the giving of that notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee.

In general, if, among other things—

•  the trustee ceases to be eligible to act in that capacity under the related Governing Document and fails to resign after we make a written request for the trustee to resign, or
•  the trustee becomes incapable of acting in that capacity under the related Governing Document, or is adjudged bankrupt or insolvent, or a receiver of the trustee or of its property is appointed, or any public officer takes charge or control of the trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or
•  the trustee fails (other than by reason of the failure of either the master servicer or the special servicer to timely perform its obligations or as a result of other circumstances beyond the trustee’s reasonable control) to timely deliver or otherwise make available in accordance with the Governing Document certain reports or statements required under the Governing Document and such failure continues unremedied for a period set forth in the Governing Document after receipt of written notice by the trustee of such failure, or
•  if a tax is imposed or threatened with respect to the trust fund by any state in which the trustee is located or in which it holds any portion of the trust fund,

then we may remove the trustee and appoint a successor trustee acceptable to us and the master servicer by written instrument, in duplicate, which instrument must be delivered to the trustee so removed and to the successor trustee.

In addition, unless we indicate otherwise in the related prospectus supplement, the holders of the offered and non-offered certificates of a subject series of certificates evidencing not less than 51%—or any other percentage specified in the related prospectus supplement—of the voting rights for that series may at any time remove the trustee and appoint a successor trustee by written instrument(s), signed by such holders or their attorneys-in-fact, delivered to the master servicer, the trustee so removed and the successor trustee so appointed.

In the event that the trustee for any series of offered certificates is terminated or removed, all of its rights and obligations under the related Governing Document and in and to the related trust assets will be terminated, other than any rights or obligations that accrued prior to the date of such termination or removal, including the right to receive all fees, expenses, advances, interest on advances and other amounts accrued or owing to it under the Governing Document with respect to periods prior to the date of such termination or removal, and no termination without cause will be effective until the payment of those amounts to the outgoing trustee. Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until acceptance of appointment by the successor trustee. The Governing Document will generally provide that the predecessor trustee is required to deliver to the successor trustee for any series of offered certificates all documents related to the mortgage assets held by it or its agent and statements held by it under the Governing Document.

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The Governing Document will also generally provide that if a trustee thereunder resigns or is terminated or removed, then any and all costs and expenses associated with transferring the duties of that trustee to a successor trustee, including those associated with the transfer of mortgage files and other documents and statements held by the predecessor trustee to the successor trustee, are to be paid: (a) by the predecessor trustee, if such predecessor trustee has resigned or been removed with cause, including by us as described in the third preceding paragraph; (b) by the certificateholders that effected the removal, if the predecessor trustee has been removed without cause by certificateholders of the subject series as described in the second preceding paragraph; and (c) out of the related trust assets, if such costs and expenses are not paid by the predecessor trustee or the subject certificateholders, as contemplated by the immediately preceding clauses (a) and (b), within a specified period after they are incurred (except that such predecessor trustee or such subject certificateholders, as applicable, will remain liable to the related trust for those costs and expenses).

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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 created at our direction. 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, if any;
•  interest on a principal balance or notional amount, at a fixed, floating adjustable or variable pass-through rate, which pass-through rate may change as of a specified date or upon the occurrence of specifed events as described in the related prospectus supplement;
•  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 on a deferred or partially deferred basis, which deferred interest may be added to the principal balance, if any, of the subject class of offered certificates or which deferred interest may or may not itself accrue interest, all as set forth in the related prospectus supplement;
•  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 interest or principal that are, in whole or in part, calculated based on or payable specifically or primarily from payments or other collections on particular related mortgage assets;
•  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;
•  payments of principal that may be accelerated or slowed in response to a change in the rate of principal payments on the related mortgage assets in order to protect the subject class of offered certificates or, alternatively, to protect one or more other classes of certificates of the same series from prepayment and/or extension risk;

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•  payments of principal out of amounts other than payments or other collections of principal on the related mortgage assets, such as excess spread on the related mortgage assets or amounts otherwise payable as interest with respect to another class of certificates of the same series, which other class of certificates provides for the deferral of interest payments thereon;
•  payments of residual amounts remaining after required payments have been made with respect to other classes of certificates of the same series; or
•  payments of all or part of the prepayment or repayment premiums, fees and charges, equity participation payments or other specified items or amounts received on the related mortgage assets.

Any class of offered certificates may be senior or subordinate to or pari passu with 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, floating, adjustable or variable rate. That class of offered certificates may also accrue interest on a total notional amount at a different fixed, floating, adjustable or variable 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, floating, adjustable or variable rate and on another portion of its total principal balance or notional amount at a different fixed, floating, adjustable or variable rate. Furthermore, a class of offered certificates may be senior to another class of certificates of the same series in some respects, such as receiving payments out of payments and other collections on particular related mortgage assets, but subordinate in other respects, such as receiving payments out of the payments and other collections on different related mortgage assets.

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 Luxembourg or the Euroclear System, for so long as they are participants in DTC.

Investor Requirements and Transfer Restrictions

A Governing Document may impose minimum standards, restrictions or suitability requirements regarding potential investors in purchasing the subject offered certificates and/or restrictions on ownership or transfer of the subject offered certificates. If so, we will discuss any such standards, restrictions and/or requirements in the related prospectus supplement if and to the extent that we do not already do so in this prospectus.

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. Payments and other collections on or with respect to the related mortgage assets will be the primary source of funds payable on a series of offered certificates. In the prospectus supplement for each series of offered certificates, we will identify:

•  the frequency of distributions on, and the periodic distribution date for, that series;

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•  the relevant collection period, which may vary from mortgage asset to mortgage asset, for payments and other collections on or with respect to the related mortgage assets that are payable on that series on any particular distribution date; and
•  the record date as of which certificateholders entitled to payments on any particular distribution date will be established.

All payments with respect to a class of offered certificates on any distribution 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 or, in most cases, a specified number of days—generally not more than five—prior to that 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.

In connection with the offering and issuance of each series of offered certificates, we will include the following information in the related prospectus supplement:

•  the flow of funds for the transaction, including the payment allocations, rights and distribution priorities among all classes of the subject offered certificates, and within each class of those offered certificates, with respect to cash flows;
•  any specified changes to the transaction structure that would be triggered upon a default or event of default on the related trust assets or the failure to make any required payment on any class of certificates of the subject series, such as a change in distribution priority among classes;
•  any credit enhancement or other support and any other structural features designed to enhance credit, facilitate the timely payment of monies due on the mortgage assets or owing to certificateholders, adjust the rate of return on those offered certificates, or preserve monies that will or might be distributed to certificateholders;
•  how cash held pending distribution or other uses is held and invested, the length of time cash will be held pending distributions to certificateholders, the identity of the party or parties with access to cash balances and the authority to invest cash balances, the identity of the party or parties making decisions regarding the deposit, transfer or disbursement of mortgage asset cash flows and whether there will be any independent verification of the transaction accounts or account activity; and
•  an itemized list (in tabular format) of fees and expenses to be paid or payable out of the cash flows from the related mortgage assets.

In the flow of funds discussion in any prospectus supplement, we will provide information regarding any directing of cash flows from the trust assets—such as to reserve accounts, cash collateral accounts or expenses—and the purpose and operation of those requirements.

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. However, in some cases, the interest payable with respect to a class of interest-bearing offered certificates will equal a specified percentage or other specified portion, calculated as described in the related prospectus supplement, of the interest accrued or payable, as applicable, on some or all of the related mortgage assets or on one or more particular related mortgage assets.

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The pass-through rate for a class of interest-bearing offered certificates may be fixed, floating, adjustable or variable. For example, the pass-through rate for a class of interest-bearing offered certificates may be:

•  a specified fixed rate;
•  a rate based on the interest rate for a particular related mortgage asset;
•  a rate based on a weighted average of the interest rates for some or all of the related mortgage assets, except that for purposes of calculating that weighted average rate any or all of the underlying rates may first be subject to a cap or floor or be increased or decreased by a specified spread or percentage or by a spread or percentage calculated based on a specified formula, with any such underlying rate adjustments permitted to vary from mortgage asset to mortgage asset or, in the case of any particular mortgage asset, from one accrual or payment period to another;
•  a rate that resets periodically based upon, and that varies either directly or indirectly with, the value from time to time of a designated objective index, such as the London interbank offered rate, a particular prime lending rate, a particular Treasury rate, the average cost of funds of one or more financial institutions or other similar index rate, as determined from time to time as set forth in the related prospectus supplement;
•  a rate that is equal to the product of (a) a rate described in any of the foregoing bullets in this sentence, multiplied by (b) a specified percentage or a percentage calculated based on a specified formula, which specified percentage or specified formula may vary from one accrual or payment period to another;
•  a rate that is equal to (a) a rate described in any of the foregoing bullets in this sentence, increased or decreased by (b) a specified spread or a spread calculated based on a specified formula, which specified spread or specified formula may vary from one accrual or payment period to another;
•  a floating, adjustable or otherwise variable rate that is described in any of the foregoing bullets in this sentence, except that it is limited by (a) a cap or ceiling that establishes either a maximum rate or a maximum number of basis points by which the rate may increase from one accrual or payment period to another or over the life of the subject offered certificates or (b) a floor that establishes either a minimum rate or a maximum number of basis points by which the rate may decrease from one accrual or payment period to another or over the life of the subject offered certificates;
•  a rate that is described in any of the foregoing bullets in this sentence, except that it is subject to a limit on the amount of interest to be paid on the subject offered certificates in any accrual or payment period that is based on the total amount available for distribution;
•  the highest, lowest or average of any two or more of the rates described in the foregoing bullets in this sentence, or the differential between any two of the rates described in the foregoing bullets in this sentence; or
•  a rate that is based on (a) one fixed rate during one or more accrual or payment periods and a different fixed rate or rates, or any other rate or rates described in any of the foregoing bullets in this sentence, during other accrual or payment periods or (b) a floating, adjustable or otherwise variable rate described in any of the foregoing bullets in this sentence, during one or more accrual or payment periods and a fixed rate or rates, or a different floating, adjustable or otherwise variable rate or rates described in any of the foregoing bullets in this sentence, during other accrual or payment periods.

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 floating, adjustable or variable pass-through rate, the method for determining that pass-through rate and how frequently it will be determined. If the rate to be paid with respect to any class of offered certificates can be a combination of two or more rates, we will provide information in the related prospectus supplement regarding each of those rates and when it applies.

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Interest may accrue with respect to any offered certificate on the basis of:

•  a 360-day year consisting of 12 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 distribution date. However, in the case of some classes of interest-bearing offered certificates, payments of accrued interest will only begin on a particular distribution 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.

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 distribution 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.

We will specify the expected initial total principal balance of each class of offered certificates in the related prospectus supplement. Unless we so state in the related prospectus supplement, the initial total principal balance of a series of certificates will not be greater than the total outstanding principal balance of the related mortgage assets transferred by us to the related trust. If applicable, we will express, as a percentage, in the related prospectus supplement, the extent to which the initial total principal balance of

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a series of certificates is greater than or less than the total outstanding principal balance of the related mortgage assets that we transfer to the releated trust.

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 of principal received or made with respect to the related mortgage assets. 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 distribution date, including any principal distribution schedules and formulas for calculating principal distributions from cash flows on the trust assets. Payment priorities among, principal distribution schedules for and formulas for calculating principal distributions from cash flows on the related trust assets with respect to various classes of certificates of any particular series may be affected by and/or subject to change based upon defaults and/or losses with respect to the related trust assets or one or more particular trust assets and/or liquidation, amortization, performance or similar triggers or events with respect to the related trust assets or one or more particular trust assets. We will identify in the related prospectus supplement the rights of certificateholders and changes to the transaction structure or flow of funds in response to the events or triggers described in the preceding sentence.

The offered certificates will not have maturity dates in a traditional sense, and it will not be an event of default if a class of offered certificates is not paid in full by a specified date. However, if the offered certificates of any particular class or series are not paid in full by a specified date, then, as and to the extent described in the related prospectus supplement, the applicable Governing Document may provide for a liquidation of a sufficient amount of related mortgage assets to retire that class or series.

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.

Different types of losses and shortfalls, or losses and/or shortfalls with respect to different mortgage assets, may be allocated differently among the various classes of certificates of the related series.

See ‘‘Description of Credit Support.’’

Incorporation of Certain Documents by Reference; Reports Filed with the SEC

All documents filed for the trust relating to a series of offered certificates after the date of this prospectus and before the end of the related offering with the SEC pursuant to Section 13(a), 13(c), 14

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or 15(d) of the Exchange Act, are incorporated by reference into this prospectus and are a part of this prospectus from the date of their filing. Any statement contained in a document incorporated by reference in this prospectus is modified or superseded for all purposes of this prospectus to the extent that a statement contained in this prospectus—or in the related prospectus supplement—or in any other subsequently filed document that also is incorporated by reference differs from that statement. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this prospectus.

We or another transaction party on behalf of the trust for a series of offered certificates will file the reports required under the Securities Act and under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. These reports include but are not limited to:

•  Reports on Form 8-K (Current Report), following the issuance of the series of certificates of the related trust fund, including as Exhibits to the Form 8-K, various agreements or other documents specified in the related prospectus supplement, if applicable;
•  Reports on Form 8-K (Current Report), following the occurrence of events specified in Form 8-K requiring disclosure, which are required to be filed within the time-frame specified in Form 8-K related to the type of event;
•  Reports on Form 10-D (Asset-Backed Issuer Distribution Report), containing the distribution and pool performance information required on Form 10-D, which are required to be filed 15 days following each related distribution date; and
•  Report on Form 10-K (Annual Report), containing the items specified in Form 10-K with respect to a fiscal year and filing or furnishing, as appropriate, the required exhibits and the certification delivered pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

We do not intend, and no other transaction party will be required, to file with the SEC any reports required under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act with respect to any of our trusts following completion of the reporting period required by Rule 15d-1 or Regulation 15D under the Securities Exchange Act of 1934. Unless specifically stated in the report, the reports and any information included in the report will neither be examined nor reported on by an independent public accountant. Each of our trusts will have a separate file number assigned by the SEC, which unless otherwise specified in the related prospectus supplement is not available until filing of the final prospectus supplement related to the series. Reports filed with the SEC with respect to one of our trusts after the final prospectus supplement is filed will be available under the trust’s specific number, which will be a series number assigned to the file number for our registration statement as shown under ‘‘Available Information.’’

We anticipate that, with respect to each of our trusts, the annual reports on Form 10-K, the distribution reports on Form 10-D, the current reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act will be made available on the website of the related trustee or the website of such other transaction party as may be identified in the prospectus supplement for the related series of offered certificates, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. If this is the case, we will identify in the applicable prospectus supplement the address of that website. If the foregoing reports will not be made available in this manner, then we will, in the related prospectus supplement, state whether an identified transaction party voluntarily will provide electronic or paper copies of the subject filings free of charge upon request.

We will, or will cause another transaction party to, provide to each person, including any beneficial owner, to whom this prospectus is delivered in connection with any offered certificates, free of charge upon written or oral request, a copy of any and all of the information that is incorporated by reference in this prospectus but not delivered with this prospectus. Unless we state otherwise in the related prospectus supplement, requests for this information should be directed to the corporate trust office of the trustee specified in the related prospectus supplement.

Reports to Certificateholders

On or about each distribution date, the related master servicer, manager or trustee will forward, upon request, or otherwise make available, to each offered certificateholder a statement substantially in the

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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 distribution 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, upon request, 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.

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.

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 distribution date statement information regarding the mortgage loans that back those securities will depend on comparable reports being received with respect to them.

Except as described in the related prospectus supplement, neither the master servicer nor any other party to a Governing Document will be required to provide certificateholders, or a trustee on their behalf, periodic evidence of the absence of a default under, or of compliance with the terms of, that Governing Document.

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 and Redemption

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 (i) to the certificateholders of that series of all amounts required to be paid to them and (ii) to the trustee, the fiscal agent, the master servicer, the special servicer and the members, managers, officers, directors, employees and/or agents of each of them of all amounts which may have become due and owing to any of them under the Governing Document.

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.

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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 which parties may exercise that purchase option, the circumstances under which those parties may exercise that purchase option and the price or the formula for determining the price.

Further, if so specified in the related prospectus supplement, but subject to the conditions specified in that prospectus supplement, following the date on which the total principal balances of the offered certificates are reduced to zero, all of the remaining certificateholders (which may exclude any holders of a class of certificates evidencing a residual interest in a REMIC) of a given series of certificates, acting together, may exchange all of those certificates for all of the mortgage loans, foreclosure properties and mortgage-backed securities remaining in the mortgage pool underlying those certificates, thereby effecting the early termination of the related trust. Upon receipt by the related trustee of all amounts due and owing in connection with such exchange, the trustee will transfer or cause to be transferred to a designee of all the remaining certficateholders all of the remaining mortgage assets.

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 price at which the mortgage assets are sold is less than their unpaid balance, plus accrued interest, then the holders 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.

The title for any class of offered certificates with an optional redemption or termination feature that may be exercised when 25% or more of the original principal balance of the related mortgage asset pool—or, in the case of a master trust, of the particular series in which the class was issued—is still outstanding, will include the word ‘‘callable.’’

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 Luxembourg, for so long as they are participants in DTC.

DTC, Euroclear and Clearstream.    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 Exchange Act.

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.

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It is our understanding that Clearstream 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 in a variety of currencies, including United States dollars. Clearstream 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 interfaces with domestic securities markets in over 39 countries through established depository and custodial relationships. Clearstream is registered as a bank in Luxembourg. It is subject to regulation by the Commission de Surveillance du Secteur Financier, which supervises Luxembourg banks. Clearstream’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream’s U.S. customers are limited to securities brokers and dealers, and banks. Indirect access to Clearstream is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream 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 the 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 210,000 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 a variety of currencies, including United States dollars. Euroclear provides 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. All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not ECSPLC. ECSPLC establishes policy for the Euroclear system on behalf of more than 120 member organizations of Euroclear. Those member organizations include banks, including central banks, securities brokers and dealers and other professional financial intermediaries. 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 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, 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

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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, or between persons or entities participating indirectly in Euroclear or Clearstream, 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, on the other, will be effected through DTC in accordance with DTC’s rules and the rules of Euroclear or Clearstream, as applicable. These cross-market transactions will require, among other things, delivery of instructions by the applicable member organization to Euroclear or Clearstream, as the case may be, in accordance with the rules and procedures and within deadlines, Brussels time, established in Euroclear or Clearstream, as the case may be. If the transaction complies with all relevant requirements, Euroclear or Clearstream, 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 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, 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 on the same day. Cash received in Euroclear or Clearstream as a result of sales of interests in a book-entry certificate by or through a member organization of Euroclear or Clearstream, 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 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.

Payments on the book-entry certificates will be made to DTC. DTC’s practice is to credit DTC participants’ accounts on the related distribution date in accordance with their respective holdings shown on DTC’s records, unless DTC has reason to believe that it will not receive payment on 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 distribution date.

The only ‘‘certificateholder’’ of book-entry certificates will be DTC or its nominee. Parties to the applicable 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

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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 affected 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 notify DTC of our intent to terminate the book-entry system through DTC with respect to those offered certificates and, in the event applicable law and/or DTC’s procedures require that the DTC participants holding beneficial interests in those offered certificates submit a withdrawal request to DTC in order to so terminate the book-entry system, we additionally notify those DTC participants and they submit a withdrawal request with respect to such termination.

Upon the occurrence of either of the two events described in the prior paragraph, the trustee or other designated party will be required to notify all DTC participants, through DTC, of the availability 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.

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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,
•  the amount and timing of payments on your offered certificates.

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.

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If you purchase your offered certificates at a discount, then 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, then 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, then 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.

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, or a designated portion of 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, and/or
•  payments are made in reduction of the total principal balance, or a designated portion of the total principal balance, of any class 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.

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

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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.

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.

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Prepayment Models

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 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.

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
•  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

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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.

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;

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•  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.

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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:

•  overcollateralization and/or excess cash flow;
•  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 or a guarantee;
•  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 distribution 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 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.

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Overcollateralization and Excess Cash Flow

If and to the extent described in the related prospectus supplement, the mortgage assets underlying any series of offered certificates may generate cashflows for the benefit of the related trust that, in the absence of default, will be in excess of the amount needed to make all required payments with respect to the offered and non-offered certificates of that series. This may be as a result of excess spread or because the mortgage assets have a greater total principal balance than the total principal balance of the certificates of the subject series. As and to the extent described in the related prospectus supplement, the additional cashflow may be available to cover losses or other shortfalls on one or more classes of related offered certificates and/or to amortize one or more classes of related offered certificates.

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.

Insurance Policies, Surety Bonds and Guarantees

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, surety bonds or guarantees provided by one or more insurance companies, sureties or other credit support providers. These 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.

Alternatively, the mortgage assets, or one or more particular mortgage assets, included in any trust established by us may be covered for some default and/or loss risks by insurance policies, surety bonds or guarantees. If so, we will describe in the related prospectus supplement the nature of those default and/or loss risks and the extent of that coverage.

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 distribution 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.

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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 ‘‘The Trust Fund—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.

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,

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•  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 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

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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.

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.

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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 necessary parties, including 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.

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.

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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.

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

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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.

One Action and Security First Rules.    Some states (including California) have laws that prohibit more than one ‘‘judicial action’’ to enforce a mortgage obligation secured by a mortgage on real property or an interest therein, and some courts have construed the term ‘‘judicial action’’ broadly. In addition, some states (including California) require that the lender proceed first against any real property security for such mortgage obligation before proceeding directly upon the secured obligation itself. In the case where either a cross-collateralized, cross-defaulted or a multi-property mortgage loan is secured by real properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where such ‘‘one action’’ and/or ‘‘security first’’ rules apply (and where non-judicial foreclosure is permitted) before foreclosing on properties located in the states where judicial foreclosure is the only permitted method of foreclosure. Otherwise, a second action in a state with ‘‘one action’’ rules might be precluded because of a prior first action, even if such first action occurred in a state without ‘‘one action’’ rules. Moreover, while the consequences of breaching these rules will vary from jurisdiction to jurisdiction, as a general matter, a lender who proceeds in violation of these rules may run the risk of forfeiting collateral and/or even the right to enforce the underlying obligation. In addition, under certain circumstances, a lender with respect to a real property located in a ‘‘one action’’ or ‘‘security first’’ jurisdiction may be precluded from obtaining a deficiency judgment against the borrower following foreclosure or sale under a deed of trust (unless there has been a judicial foreclosure). Finally, in some jurisdictions, the benefits of such laws may be available not just to the underlying obligor, but also to any guarantor of the underlying obligation, thereby limiting the ability of the lender to recover against a guarantor without first complying with the applicable anti-deficiency statutes.

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 generally be limited to the underlying real 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 pursuant to the ‘‘power of 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 state statutes may require the lender to exhaust the security afforded under a mortgage before bringing a personal action against the borrower. In some 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. 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 otherwise result from below-market bids at the foreclosure sale. In some states, exceptions to the anti-deficiency statues are provided for in certain instances where the value of the lender’s security has been impaired by acts or omissions of the borrower such as for waste upon the property. Finally, some statutes may preclude deficiency judgments altogether with respect to certain kinds of obligations such as purchase-money indebtedness. In some jurisdictions the courts have extended the benefits of this legislation to the guarantors of the underlying obligation as well.

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:

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•  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 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. If there are proceeds remaining, the lender must account to the tenant-stockholder for the surplus. Conversely, if a portion of the indebtedness remains unpaid, the tenant-stockholder is generally responsible for the deficiency.

In the case of foreclosure on a building converted from a rental building to a building owned by a cooperative under a non-eviction plan, some states require that a purchaser at a foreclosure sale take the property subject to rent control and rent stabilization laws that apply to certain tenants who elected to remain in the building but who did not purchase shares in the cooperative when the building was so converted.

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;

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•  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.

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

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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.’’

The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996 (the ‘‘Lender Liability Act’’) 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.

CERCLA does not apply to petroleum products, and the secured creditor exclusion does not govern liability for cleanup costs under federal laws other than CERCLA, in particular Subtitle I of the federal Resource Conservation and Recovery Act (‘‘RCRA’’), which regulates underground petroleum storage tanks, except heating oil tanks. The EPA has adopted a lender liability rule for underground storage tanks (USTs) under Subtitle I of RCRA. Under that rule a lender with a security interest in an UST or real property containing an UST is not liable as an ‘‘owner’’ or ‘‘operator’’ so long as the lender does not engage in decision making control of the use, storage, filing or dispensing of petroleum contained in the UST, exercise control over the daily operation of the UST, or engage in petroleum production, refining or marketing. Moreover, under the Lender Liability Act, the protections accorded to lenders under CERCLA are also accorded to holders of security interests in underground petroleum storage tanks. It should be noted, however, that liability for cleanup of petroleum contamination may be governed by state law, which may not provide for any specific protection for secured creditors, or alternatively, may not impose liability on secured creditors at all.

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.

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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 information in their possession regarding the presence of lead-based paint or lead-based paint-related 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.

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 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. The inability to enforce a due-on-sale clause may result in transfer of the related mortgaged property to an uncreditworthy person, which could increase the likelihood of default, which may affect the average life of the mortgage loans and the number of mortgage loans which may extend to maturity.

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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 mortgage loan.

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.

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 (‘‘Title V’’) 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

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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.

Servicemembers Civil Relief Act

Under the terms of the Servicemembers Civil Relief Act, 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.

In addition, pursuant to the laws of various states, under certain circumstances, payments on mortgage loans by residents in such states who are called into active duty with the National Guard or the reserves will be deferred. These state laws may also limit the ability of the master servicer to foreclose on the related mortgaged property. This could result in delays or reductions in payment and increased losses on the mortgage loans that would be borne by certificateholders.

Forfeitures in Drug, RICO and Money Laundering Proceedings

Federal law provides that property purchased or improved with assets derived from criminal activity or otherwise tainted, or used in the commission of certain offenses can be seized by and ordered forfeited to the United States of America. The offenses which can trigger such a seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy

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Act, the anti-money-laundering laws and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the ‘‘USA Patriot Act’’) and the regulations issued pursuant to the USA Patriot Act, as well as the narcotic drug laws. 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 illegal conduct from which the assets used to purchase or improve the property were derived or before any other crime upon which the forfeiture is based, or
•  the lender was, at the time of execution of the mortgage, ‘‘reasonably without cause to believe that the property was subject to forfeiture.’’

However, there is no assurance that such defense will be successful.

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FEDERAL INCOME TAX CONSEQUENCES

General

This is a general discussion of the anticipated material federal income tax consequences of purchasing, owning and transferring the offered certificates. 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. 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 Internal Revenue Code, including:

•  banks,
•  insurance companies,
•  foreign investors.
•  tax exempt investors,
•  holders whose ‘‘functional currency’’ is not the United States dollar,
•  United States expatriates, and
•  holders holding the offered certificates as part of a hedge, straddle, or conversion transaction.

Further, this discussion and any legal opinions referred to in this discussion are based on current provisions and interpretations of the Internal Revenue Code and the accompanying Treasury regulations and on current judicial and administrative rulings. All of these authorities are subject to change and any change can apply retroactively. No rulings have been or will be sought from the IRS with respect to any of the federal income tax consequences discussed below. Accordingly, the IRS may take contrary positions.

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 are encouraged to consult their own tax advisors regarding that issue. Investors should do so not only as to federal taxes, but also as to state and local taxes. See ‘‘State and Other Tax Consequences.’’

The following discussion addresses securities of two general types:

•  REMIC certificates, representing interests in a trust, or a portion of the assets of that trust, 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 Internal Revenue Code; and
•  grantor trust certificates, representing interests in a trust, or a portion of the assets of that trust, as to which no REMIC election will be made.

We will indicate in the prospectus supplement for each series of offered certificates whether the related trustee, another party to the related Governing Document or an agent appointed by that trustee or other party will act as tax administrator 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 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

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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 ‘‘The Trust Fund—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 Internal Revenue 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 Internal Revenue Code and in the Treasury regulations issued or proposed under those sections. The regulations relating to original issue discount do not adequately address all 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 any other 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 will represent—
1.  regular interests in the REMIC, or
2.  residual interests in the REMIC.

Any and all offered certificates representing interests in a REMIC will be either—

•  REMIC regular certificates, representing regular interests in the REMIC, or
•  REMIC residual certificates, representing residual interests in the REMIC.

If an entity electing to be treated as a REMIC fails to comply with the ongoing requirements of the Internal Revenue 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 Internal Revenue 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 Internal Revenue Code.

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 Internal Revenue 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 Internal Revenue Code in the hands of a thrift institution,

in the same proportion that the assets of the related REMIC are so treated.

However, to the extent that the REMIC assets constitute mortgage loans on property not used for residential or other prescribed purposes, the related offered certificates will not be treated as assets qualifying under section 7701(a)(19)(C) of the Internal Revenue Code. 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 we state 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 Internal Revenue Code in the hands of another REMIC.

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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 Internal Revenue 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 Internal Revenue 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 Internal Revenue 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 Internal Revenue Code. In addition, in some instances, the mortgage loans may not be treated entirely as assets described in those sections of the Internal Revenue 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 Internal Revenue 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. Accordingly:

•  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.

Tiered REMIC Structures.    For some 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 interests in 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 Internal Revenue Code,
•  whether the related REMIC certificates will be ‘‘loans secured by an interest in real property’’ under section 7701(a)(19)(C) of the Internal Revenue Code, and
•  whether the interest/income on the related REMIC certificates is interest described in section 856(c)(3)(B) of the Internal Revenue Code.

Taxation of Owners of REMIC Regular Certificates.

General.    Except as otherwise stated in this discussion, the Internal Revenue 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.

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Original Issue Discount.    Some REMIC regular certificates may be issued with original issue discount within the meaning of section 1273(a) of the Internal Revenue 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 a constant yield method, prior to the receipt of the cash attributable to that income. The Treasury Department has issued regulations under sections 1271 to 1275 of the Internal Revenue Code generally addressing the treatment of debt instruments issued with original issue discount. section 1272(a)(6) of the Internal Revenue 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 Internal Revenue Code do not adequately address all 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 offered certificates.

The Internal Revenue 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 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
•  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 of that discount 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.

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Some 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 distribution 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 distribution 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 distribution date in excess of interest accrued from the date of initial issuance to the first distribution 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 distribution 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.

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 in this ‘‘—Original Issue Discount’’ subsection.

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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 distribution date, or in the case of the first accrual period, begins on the date of initial issuance, and ends on the day preceding the next following distribution 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 total 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.

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 total 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 that 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 it against future positive original issue discount, if any, attributable to the certificate. Although not free from doubt, it is possible that you

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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, the 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—The Investment Performance of Your Offered Certificate Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable.’’

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 are encouraged to consult their tax advisors concerning the tax treatment of these certificates in this regard.

The Treasury Department proposed regulations on August 24, 2004 concerning the accrual of interest income by the holders of REMIC regular interests. The proposed regulations would create a special rule for accruing original issue discount on REMIC regular certificates that provide for a delay between record and distribution dates, such that the period over which original issue discount accrues coincides with the period over which the certificate holder’s right to interest payment accrues under the governing contract provisions rather than over the period between distribution dates. If the proposed regulations are adopted in the same form as proposed, certificate holders would be required to accrue interest from the issue date to the first record date, but would not be required to accrue interest after the last record date. The proposed regulations are limited to REMIC regular certificates with delayed payment periods of fewer than 32 days. The proposed regulations are proposed to apply to any REMIC regular certificate issued after the date the final regulations are published in the Federal Register. The proposed regulations provide automatic consent for the holder of a REMIC regular certificate to change its method of accounting for original issue discount under the final regulations. The change is proposed to be made on a cut-off basis and, thus, does not affect REMIC regular interests certificates before the date the final regulations are published in the Federal Register.

The Treasury Department issued a notice of proposed rulemaking on the timing of income and deductions attributable to interest-only regular interests in a REMIC on August 24, 2004. In this notice, the Treasury Department and the IRS requested comments on whether to adopt special rules for taxing regular interests in a REMIC that are entitled only to a specified portion of the interest in respect of one or more mortgage loans held by the REMIC (‘‘REMIC IOs’’), high-yield REMIC regular interests, and apparent negative-yield instruments. The Treasury Department and the IRS also requested comments on different methods for taxing the foregoing instruments, including the possible recognition of negative amounts of original issue discount, the formulation of special guidelines for the application of Code Section 166 to REMIC IOs and similar instruments, and the adoption of a new alternative method applicable to REMIC IOs and similar instruments. It is uncertain whether IRS actually will propose any regulations as a consequence of the solicitation of comments and when any resulting new rules would be effective.

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 Internal Revenue 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

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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 currently market discount in income 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.

However, market discount with respect to a REMIC regular certificate will be considered to be de minimis for purposes of section 1276 of the Internal Revenue 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 Internal Revenue 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, the relevant 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

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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 Internal Revenue 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 Internal Revenue Code to amortize the premium 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 ‘‘—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 Internal Revenue Code.

Whether you will be treated as holding a REMIC regular certificate with amortizable bond premium will depend on—

•  the purchase price paid for your offered certificate, and
•  the payments remaining to be made on your offered 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 are encouraged to consider consulting your own tax advisor regarding the possibility of making an election to amortize the premium.

Realized Losses.    Under section 166 of the Internal Revenue 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 offered 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 Internal Revenue Code until your offered certificate becomes wholly worthless, which is when its principal balance has been reduced to zero, 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 of

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those 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 Internal Revenue Code does not subject a REMIC to entity-level taxation, except with regard to prohibited transactions and the other transactions described under ‘‘—REMICs—Prohibited Transactions Tax and Other Taxes’’ below. Rather, a holder of REMIC residual certificates must generally include in income the taxable income or net loss of the related REMIC. Accordingly, the Internal Revenue Code treats the REMIC residual certificates much differently than it would if they were direct ownership interests in the related mortgage loans or as 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 residual 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 Internal Revenue 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 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 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.

The Treasury Department has issued final regulations, effective May 11, 2004, which address the federal income tax treatment of ‘‘inducement fees’’ received by transferees of noneconomic REMIC residual interests. The final regulations 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. The final regulations provide two safe harbor methods which permit transferees to include inducement fees in income, either (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 certificate, any unrecognized portion of the inducement fee must be taken into account at the time of the sale or disposition. The final regulations also provide that an inducement fee shall be treated

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as income from sources within the United States. In addition, the IRS has issued administrative guidance addressing the procedures by which transferees of noneconomic REMIC residual interests may obtain automatic consent from the IRS to change the method of accounting for REMIC inducement fee income to one of the safe harbor methods provided in these final regulations (including a change from one safe harbor method to the other safe harbor method). Prospective purchasers of the REMIC residual certificates are encouraged consult with their tax advisors regarding the effect of these final regulations and the related guidance regarding the procedures for obtaining automatic consent to change the method of accounting.

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 REMIC residual certificates until subsequent tax years. Even then, the extra income may not be completely offset due to changes in the Internal Revenue Code, tax rates or character of the income or loss. Therefore, REMIC residual certificates will ordinarily have a negative value at the time of issuance. See ‘‘Risk Factors—Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences.’’

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 in this ‘‘—Taxable Income of the REMIC’’ subsection, 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 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.

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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 Internal Revenue 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 Internal Revenue Code will not be applied at the REMIC level so that the REMIC will be allowed full deductions for servicing, administrative and other non-interest 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 Internal Revenue Code. See ‘‘—REMICs—Taxation of Owners of REMIC Residual Certificates—Possible 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 payments 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

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deductible by reason of this limitation may be carried forward 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 distributions 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 payments, 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 of the certificate would have been in the hands of an original holder.

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.

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.

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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 30% 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 total 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 total 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 Internal Revenue Code, other than any net capital gain. Treasury regulations yet to be issued could apply a similar rule to:

•  regulated investment companies,
•  common trusts, and
•  some cooperatives.

The Treasury regulations, however, currently do not address this subject.

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 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:

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•  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 representations as to its financial condition and that it understands that, as the holder of a non-economic REMIC residual certificate, it may incur tax liabilities in excess of any cash flows generated by the REMIC residual certificate and that such transferee intends to pay its taxes associated with holding such REMIC residual certificate 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.

Final Treasury regulations issued on July 18, 2002 (the ‘‘Safe Harbor Regulations’’), provide that transfers of noneconomic residual interests must meet two additional requirements to qualify for the safe harbor: (a) the transferee must represent that it will not cause income from the noneconomic residual interest to be attributable to a foreign permanent establishment or fixed base (within the meaning of an applicable income tax treaty, hereafter a ‘‘foreign branch’’) of the transferee or another U.S. taxpayer, and (b) the transfer must satisfy either an ‘‘asset test’’ or a ‘‘formula test’’ provided under the REMIC Regulations. A transfer to an ‘‘eligible corporation,’’ generally a domestic corporation, will satisfy the asset test if: at the time of the transfer, and at the close of each of the transferee’s two fiscal years preceding the transferee’s fiscal year of transfer, the transferee’s gross and net assets for financial reporting purposes exceed $100 million and $10 million, respectively, in each case, exclusive of any obligations of certain related persons, the transferee agrees in writing that any subsequent transfer of the interest will be to another eligible corporation in a transaction that satisfies the asset test, and the transferor does not know or have reason to know, that the transferee will not honor these restrictions on subsequent transfers, and a reasonable person would not conclude, based on the facts and circumstances known to the transferor on or before the date of the transfer (specifically including the amount of consideration paid in connection with the transfer of the noneconomic residual interest) that the taxes associated with the residual interest will not be paid. In addition, the direct or indirect transfer of the residual interest to a foreign branch of a domestic corporation is not treated as a transfer to an eligible corporation under the asset test. The ‘‘formula test’’ makes the safe harbor unavailable unless the present value of the anticipated tax liabilities associated with holding the residual interest did not exceed the sum of:

•  the present value of any consideration given to the transferee to acquire the interest,
•  the present value of the expected future distributions on the interest, and
•  the present value of the anticipated tax savings associated with the holding of the interest as the REMIC generates losses.

Present values must be computed using a discount rate equal to the applicable Federal short-term rate.

If the transferee has been subject to the alternative minimum tax in the preceding two years and will compute its taxable income in the current taxable year using the alternative minimum tax rate, then it may use the alternative minimum tax rate in lieu of the corporate tax rate. In addition, the direct or indirect transfer of the residual interest to a foreign branch of a domestic corporation is not treated as a transfer to an eligible corporation under the formula test.

The Governing Document will require that all transferees of residual certificates furnish an affidavit as to the applicability of one of the safe harbors of the Safe Harbor Regulations, unless the transferor has waived the requirement that the transferee do so.

Prospective investors are encouraged consult their own tax advisors as to the applicability and effect of these alternative 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 with respect to that purported transfer.

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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 various 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—Foreign Investors in REMIC Certificates’’ below for additional restrictions applicable to transfers of REMIC residual certificates to foreign persons.

Mark-to-Market Rules.    Regulations under section 475 of the Internal Revenue Code require that a securities dealer mark to market securities held for sale to customers. This mark-to-market requirement applies to all securities owned by a dealer, except to the extent that the dealer has specifically identified a security as held for investment. These regulations provide that for purposes of this mark-to-market requirement, a REMIC residual certificate is not treated as a security for purposes of section 475 of the Internal Revenue Code. Thus, a REMIC residual certificate is not subject to the mark-to-market rules. We recommend that prospective purchasers of a REMIC residual certificate consult their tax advisors regarding these regulations.

Transfers of REMIC Residual Certificates to Investors That Are Foreign Persons.    Unless we otherwise state in the related prospectus supplement, transfers of REMIC residual certificates to investors that are foreign persons under the Internal Revenue Code will be prohibited under the related Governing Documents.

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
•  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 Internal Revenue Code, which permits the deduction of these fees and expenses only to the extent they exceed, in total, 2% of a taxpayer’s adjusted gross income.

In addition, section 68 of the Internal Revenue Code currently 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 such taxpayer's adjusted gross income, or
•  80% of the amount of itemized deductions otherwise allowable for such tax year.

Under current law, the applicable reduction will be two-thirds of the above amount for taxable years beginning in 2006 and 2007, and one-third of the above amount for taxable years beginning in 2008 and 2009. For taxable years beginning after December 31, 2009, the reduction of itemized deductions is repealed. Furthermore, in determining the alternative minimum taxable income of a holder of a REMIC certificate that is—

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•  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 Internal Revenue 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 those 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
•  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 in this ‘‘—Sales of REMIC Certificates’’ subsection, 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 Internal Revenue Code, which is generally property held for investment.

In addition to the recognition of gain or loss on actual sales, the Internal Revenue 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 a transaction 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.

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As of the date of this prospectus, the Internal Revenue 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 similar 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 on the certificate 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 Internal Revenue 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 Internal Revenue Code applies will be ordinary income or loss.

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 Internal Revenue 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.

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 Internal Revenue 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 Internal Revenue 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 Internal Revenue Code imposes a tax on REMICs equal to 100% of the net income derived from prohibited transactions. In general, subject to specified exceptions, a prohibited transaction includes:

•  the disposition of a non-defaulted mortgage loan,

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•  the receipt of income from a source other than a mortgage loan or 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, some 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. The related Governing Documents may permit the special servicer to conduct activities with respect to a mortgaged property acquired by one of our trusts in a manner 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 may the special servicer allow the acquired mortgaged property to cease to be a ‘‘permitted investment’’ under section 860G(a)(5) of the Internal Revenue Code.

Unless we state otherwise in the related prospectus supplement, and to the extent permitted by then applicable laws, any tax on prohibited transactions, particular 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 Particular 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:

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•  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.

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.

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 in this prospectus will be made available.

We will include in the related Governing Document restrictions on the transfer of REMIC residual certificates and 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 distribution date following receipt by the REMIC of the final payment with respect to 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 Internal Revenue 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 applicable 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—

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•  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 under section 6111 of the Internal Revenue 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
•  various other non-individuals,

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 related tax administrator for the subject REMIC.

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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 Internal Revenue Code if recipients of these payments:

•  fail to furnish to the payor information regarding, among other things, 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, 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.    Unless we otherwise disclose in the related prospectus supplement, a holder of a REMIC regular 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 with respect to a payment on a REMIC regular certificate. To avoid withholding or tax, that holder must comply with applicable 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. Special rules apply to partnerships, estates and trusts, and in certain circumstances certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof.

For these purposes, a foreign person is anyone other than a U.S. 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 Internal Revenue 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
•  U.S. Persons, if classified as a partnership under the Internal Revenue Code, unless all of their beneficial owners are U.S. Persons and the partnership agreement prohibits transfers of partnership interests to non-U.S. 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

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Document, the related trust, or relevant portion of that trust, will be classified as a grantor trust under subpart E, part I of subchapter J of the Internal Revenue Code and not as a partnership or an association taxable as a corporation.

A grantor trust certificate may be classified as either of the following types of certificate:

•  a grantor trust fractional interest certificate representing an undivided equitable ownership interest in the principal of the mortgage loans constituting the related grantor trust, together with interest, if any, on those loans at a pass-through rate; or
•  a grantor trust strip 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

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 Internal Revenue Code, but only to the extent that the underlying mortgage loans have been made with respect to property that is used for residential or 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 Internal Revenue Code; and
•  ‘‘real estate assets’’ within the meaning of section 856(c)(5)(B) of the Internal Revenue 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 Internal Revenue 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 Internal Revenue Code,
•  consisting of mortgage loans that are ‘‘real estate assets’’ within the meaning of section 856(c)(5)(B) of the Internal Revenue Code, and
•  the interest on which is ‘‘interest on obligations secured by mortgages on real property’’ within the meaning of section 856(c)(3)(B) of the Internal Revenue Code,

it is unclear whether the grantor trust strip certificates, and the income from those certificates, 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 from those certificates, will be so characterized.

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 Internal Revenue Code.

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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 underlying 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 Internal Revenue Code allows an individual, estate or trust holding a grantor trust fractional interest certificate directly or through some types of pass-through entities a deduction for any reasonable servicing fees and expenses only to the extent that the total of the holder’s miscellaneous itemized deductions exceeds two percent of the holder’s adjusted gross income.

Section 68 of the Internal Revenue Code currently reduces the amount of itemized deductions otherwise allowable for an individual whose adjusted gross income exceeds a specified amount. Under current law, the applicable reduction will be two-thirds of the above amount for taxable years beginning in 2006 and 2007, and one-third of the above amount for taxable years beginning in 2008 and 2009. For taxable years beginning after December 31, 2009, the reduction of itemized deductions is repealed.

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 Internal Revenue 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 Internal Revenue 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,
•  any sub-servicer, or
•  their respective affiliates.

With respect to certain categories of debt instruments, section 1272(a)(6) of the Internal Revenue 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.

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Legislation enacted in 1997 extended the scope of that 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 Internal Revenue 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 Internal Revenue Code. This is subject, however, to the discussion below regarding:

•  the treatment of some 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’’ in this prospectus for a description 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 that 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 at 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 distribution dates. In computing yield under the stripped bond rules, a certificateholder’s share of future payments on the related mortgage loans will not include any payments made with respect to 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 Internal Revenue Code. The precise means of applying that method is uncertain in various respects. 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

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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, some stripped bonds are to be treated as market discount bonds. Accordingly, any purchaser of that 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.

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.

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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 those 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 Internal Revenue 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 total 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 total 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 total 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.

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

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•  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 Internal Revenue 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. Such market discount will be accrued based generally on the method described in section 1272(a)(6) of the Internal Revenue 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 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 Internal Revenue 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.

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It appears that a prepayment assumption should be used in computing amortization of premium allowable under section 171 of the Internal Revenue 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 Internal Revenue 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 Internal Revenue Code will apply to the grantor trust strip certificates. Except as described above under ‘‘—Grantor Trusts—Taxation of Owners of Grantor Trust Fractional Interest Certificates—If Stripped Bond Rules Apply,’’ no regulations or published rulings under section 1286 of the Internal Revenue 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 Internal Revenue 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 on that grantor trust strip certificate 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 based generally on the method described in section 1272(a)(6) of the Internal Revenue 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 his or her basis in the certificate exceeds the maximum amount of payments you could ever receive with respect to that certificate. However, the 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—The Investment Performance of Your Offered Certificates Will Depend Upon Payments, Defaults and Losses on the Underlying Mortgage Loans; and Those Payments, Defaults and Losses May Be Highly Unpredictable’’ above.

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

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•  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 in this ‘‘—Sales of Grantor Trust Certificates’’ subsection. 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 previously reported losses, amortized premium, and payments with respect to that grantor trust certificate.

As of the date of this prospectus, the Internal Revenue 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 similar 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 some 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 Internal Revenue 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 Internal Revenue 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 Internal Revenue 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 a transaction 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, some grantor trust certificates have no, or a disproportionately small amount of, principal and these certificates can be the subject of a constructive sale.

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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.

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 on those loans 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 January 24, 2006, the Treasury Department published final regulations, which establish a reporting framework for interests in ‘‘widely held fixed investment trusts’’ and place the responsibility of reporting on the person in the ownership chain who holds an interest for a beneficial owner. A widely-held fixed investment trust is defined as an arrangement 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,
•  a nominee, and
•  a broker holding an interest for a customer in street name.

The trustee, or its designated agent, will be required to calculate and provide information to requesting persons with respect to the trust in accordance with these new regulations beginning with respect to the 2007 calendar year. The trustee (or its designated agent), or the applicable middleman (in the case of interests held through a middleman), will be required to file information returns with the IRS and provide tax information statements to holders in accordance with these new regulations after December 31, 2007.

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 Internal Revenue 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.

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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

The Employee Retirement Income Security Act of 1974, as amended, imposes various requirements on—

•  ERISA Plans, and
•  persons that are fiduciaries with respect to ERISA Plans,

in connection with the investment of the assets of an ERISA Plan. For purposes of this discussion, ERISA Plans include corporate pension and profit sharing plans as well as separate accounts and collective investment funds, including as applicable, insurance company general accounts, in which other ERISA Plans are invested.

Governmental plans and, if they have not made an election under Section 410(d) of the Internal Revenue Code, church plans are not subject to ERISA requirements. However, those plans may be subject to provisions of other applicable federal or state law that are materially similar to the provisions of ERISA or the Internal Revenue Code discussed in this section. Any of those plans which is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code, moreover, is subject to the prohibited transaction rules in Section 503 of the Internal Revenue Code.

ERISA imposes general fiduciary requirements on a fiduciary that is investing the assets of an ERISA Plan, including—

•  investment prudence and diversification, and
•  compliance with the investing ERISA Plan’s governing documents.

Section 406 of ERISA also prohibits a broad range of transactions involving the assets of an ERISA Plan and a Party in Interest with respect to that ERISA Plan, unless a statutory or administrative exemption applies. Section 4975 of the Internal Revenue Code contains similar prohibitions applicable to transactions involving the assets of an I.R.C. Plan. For purposes of this discussion, Plans include ERISA Plans as well as individual retirement accounts, Keogh plans and other I.R.C. Plans.

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 Internal Revenue 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, an individual retirement account 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. Section 2510.3-101 of the Plan Asset Regulations,

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as modified by Section 3(42) of ERISA, provides that when a Plan acquires an equity interest in an entity, the assets of that Plan include both that equity interest and an undivided interest in each of the underlying assets of the entity, unless an exception applies. One exception is that the equity participation in the entity by benefit plan investors, which include both Plans and some employee benefit plans not subject to ERISA or Section 4975 of the Internal Revenue Code, 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:

1.  those with discretionary authority or control over the assets of the entity,
2.  those who provide investment advice directly or indirectly for a fee with respect to the assets of the entity, and
3.  those who are affiliates of the persons described in the preceding clauses 1. and 2.

In the case of one of our trusts, investments by us, by an underwriter, 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 mortgage 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 mortgage 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 Section 4975 of the Internal Revenue 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.

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 are encouraged consult your counsel and review the ERISA discussion in the related prospectus supplement before purchasing any offered certificates.

Prohibited Transaction Exemptions

If you are a Plan fiduciary, then, in connection with your deciding whether to purchase any of the offered certificates on behalf of, or with assets of, a Plan, you should consider the availability of one of the following prohibited transaction class exemptions issued by the U.S. Department of Labor:

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•  Prohibited Transaction Class Exemption 75-1, which exempts particular transactions involving Plans and broker-dealers, reporting dealers and banks;
•  Prohibited Transaction Class Exemption 90-1, which exempts particular transactions between insurance company separate accounts and Parties in Interest;
•  Prohibited Transaction Class Exemption 91-38, which exempts particular transactions between bank collective investment funds and Parties in Interest;
•  Prohibited Transaction Class Exemption 84-14, which exempts particular transactions effected on behalf of an ERISA Plan by a ‘‘qualified professional asset manager;’’
•  Prohibited Transaction Class Exemption 95-60, which exempts particular transactions between insurance company general accounts and Parties in Interest; and
•  Prohibited Transaction Class Exemption 96-23, which exempts particular transactions effected on behalf of an ERISA Plan by an ‘‘in-house asset manager.’’

We cannot provide any assurance that any of these class exemptions will apply with respect to any particular investment by or on behalf of a Plan in any class of offered certificates. Furthermore, even if any of them were deemed to apply, that particular class exemption may not apply to all transactions that could occur in connection with the investment. The prospectus supplement with respect to the offered certificates of any series may contain additional information regarding the availability of other exemptions, with respect to those certificates.

Underwriter’s Exemption

It is expected that Lehman Brothers Inc. will be the sole underwriter or the lead or co-lead managing underwriter in each underwritten offering of certificates made by this prospectus. The U.S. Department of Labor issued Prohibited Transaction Exemption 91-14 to a predecessor in interest to Lehman Brothers Inc. Subject to the satisfaction of the conditions specified in that exemption, PTE 91-14, as amended by PTE 97-34, PTE 2000-58 and PTE 2002-41, generally exempts from the application of the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code, various transactions relating to, among other things—

•  the servicing and operation of some mortgage assets pools, such as the types of mortgage assets 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 Lehman Brothers Inc. or any person affiliated with Lehman Brothers Inc., such as particular classes of the offered certificates.

The related prospectus supplement will state whether PTE 91-14 is or may be available with respect to any offered certificates underwritten by Lehman Brothers Inc.

Insurance Company General Accounts

Section 401(c) of ERISA provides that the fiduciary and prohibited transaction provisions of ERISA and the Internal Revenue Code do not apply to transactions involving an insurance company general account where the assets of the general account are not Plan assets. A Department of Labor regulation issued under Section 401(c) of ERISA provides 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 ERISA 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 Department of Labor regulation under Section 401(c) of ERISA, may be treated as Plan assets. In addition, because Section 401(c) of ERISA

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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 and are contemplating the investment of general account assets in offered certificates, you are encouraged consult your legal counsel as to the applicability of Section 401(c) of ERISA.

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 Section 4975 of the Internal Revenue Code to that investment, and
2.  the availability of any prohibited transaction exemption in connection with that investment.

Tax Exempt Investors

A Plan that is exempt from federal income taxation under Section 501 of the Internal Revenue 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 Internal Revenue Code. All excess inclusions of a REMIC allocated to a REMIC residual certificate held by a tax-exempt Plan will be considered unrelated business taxable income and will be subject to federal income tax.

See ‘‘Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Residual Certificates—Excess Inclusions’’ in this prospectus.

LEGAL INVESTMENT

If and to the extent specified in the related prospectus supplement, certain classes of the offered certificates of any series will constitute mortgage related securities for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended.

Generally, the only classes of offered certificates that will qualify as ‘‘mortgage related securities’’ will be those that: (1) are rated in one of two highest rating categories by at least one nationally recognized statistical rating organization; and (2) are part of a series evidencing interests in a trust fund consisting of loans originated by certain types of originators specified in SMMEA and secured by first liens on real estate. The appropriate characterization of offered certificates not qualifying as ‘‘mortgage related securities’’ for purposes of SMMEA under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase such certificates, may be subject to significant interpretive uncertainties. All investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities are encouraged consult with their own legal advisors in determining whether and to what extent the offered certificates constitute legal investments for them.

‘‘Mortgage related securities’’ are legal investments for persons, trusts, corporations, partnerships, associations, business trusts, and business entities, including depository institutions, insurance companies, trustees and pension funds—

•  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.

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Under SMMEA, a number of states enacted legislation, on or prior to the October 3, 1991 cut-off for those enactments, limiting to various extents the ability of some entities (in particular, insurance companies) to invest in ‘‘mortgage related securities’’ secured by liens on residential, or mixed residential and commercial properties, in most cases by requiring the affected investors to rely solely upon existing state law, and not SMMEA. Pursuant to Section 347 of the Riegle Community Development and Regulatory Improvement Act of 1994, which amended the definition of ‘‘mortgage related security’’ to include, in relevant part, certificates satisfying the rating and qualified originator requirements for ‘‘mortgage related securities,’’ but evidencing interests in a trust fund consisting, in whole or in part, of first liens on one or more parcels of real estate upon which are located one or more commercial structures, states were authorized to enact legislation, on or before September 23, 2001, specifically referring to Section 347 and prohibiting or restricting the purchase, holding or investment by state-regulated entities in those types of certificates. Accordingly, the investors affected by any state legislation overriding the preemptive effect of SMMEA will be authorized to invest in offered certificates qualifying as ‘‘mortgage related securities’’ only to the extent provided in that legislation.

SMMEA also amended the legal investment authority of federally chartered depository institutions as follows:

•  federal savings and loan associations and federal savings banks may invest in, sell or otherwise deal in ‘‘mortgage related securities’’ without limitation as to the percentage of their assets represented by those securities; and
•  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. § 24 (Seventh),

subject in each case to the regulations that the applicable federal regulatory authority may prescribe.

Effective December 31, 1996, the OCC amended 12 C.F.R. Part 1 to authorize national banks to purchase and sell for their own account, without limitation as to a percentage of the bank’s capital and surplus, but subject to compliance with certain general standards concerning ‘‘safety and soundness’’ and retention of credit information in 12 C.F.R. Section 1.5, some ‘‘Type IV securities’’, which are defined in 12 C.F.R. Section 1.2(m) to include certain commercial mortgage-related securities and residential mortgage-related securities. As defined, ‘‘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’’ (other than stripped mortgage related securities (unless the credit union complies with the requirements of 12 C.F.R. Section 703.16 for investing in those securities) under limited circumstances, residual interests in mortgage related securities and commercial mortgage related securities), subject to compliance with general rules governing investment policies and practices; however, credit unions approved for the NCUA’s ‘‘investment pilot program’’ under 12 C.F.R. § 703.19 may be able to invest in those prohibited forms of securities, while ‘‘RegFlex credit unions’’ may invest in commercial mortgage related securities under certain conditions pursuant to 12 C.F.R. § 742.4(b)(2).

The OTS has issued Thrift Bulletin 13a (December 1, 1998), ‘‘Management of Interest Rate Risk, Investment Securities, and Derivatives Activities,’’ and Thrift Bulletin 73a (December 18, 2001), ‘‘Investing in Complex Securities,’’ which thrift institutions subject to the jurisdiction of the OTS should consider before investing in any of the offered certificates.

All depository institutions considering an investment in the offered certificates are encouraged review the ‘‘Supervisory Policy Statement on Investment Securities and End-User Derivatives Activities’’

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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.

Investors whose investment activities are subject to regulation by federal or state authorities are encouraged review rules, policies, and guidelines adopted from time to time by those authorities before purchasing any offered certificates, as certain classes may be deemed unsuitable investments, or may otherwise be restricted, under those rules, policies, or guidelines (in certain instances irrespective of SMMEA).

The foregoing does not take into consideration the applicability of statutes, rules, regulations, orders, guidelines, or agreements generally governing investments made by a particular investor, including, but not limited to, ‘‘prudent investor’’ provisions, percentage-of-assets limits, provisions that may restrict or prohibit investment in securities that are not ‘‘interest-bearing’’ or ‘‘income-paying,’’ and, with regard to any offered certificates issued in book-entry form, provisions that may restrict or prohibit investments in securities that are issued in book-entry form.

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, financial institution regulatory 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 (and any unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of the certificates) 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 are encouraged consult with your legal advisors 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 any jurisdiction relevant to you.

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. 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.

METHOD 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:

1.  by negotiated firm commitment or best efforts underwriting and public offering by one or more underwriters specified in the related prospectus supplement;
2.  by placements by us with institutional investors through dealers; and
3.  by direct placements by us with institutional investors.

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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.

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, 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.

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, in connection with reoffers and sales by them of offered certificates. Holders of offered certificates are encouraged to consult with their legal advisors in this regard prior to any reoffer or sale.

It is expected that Lehman Brothers Inc. will be the sole underwriter or the lead or co-lead managing underwriter in each underwritten offering of certificates made by this prospectus. Lehman Brothers Inc. is our affiliate and an affiliate of Lehman Holdings.

We may not publicly offer all the 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, to place some with investors outside the United States or to deliver some to the applicable seller as partial consideration for the related mortgage assets.

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—

•  Sidley Austin LLP;
•  Cadwalader, Wickersham & Taft LLP;

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•  Skadden, Arps, Slate, Meagher & Flom LLP; or
•  Thacher Proffitt & Wood 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. We will, in the related prospectus supplement, with respect to each class of offered certificates, identify the applicable rating agency or agencies and specify the minimum rating(s) that must be assigned to each such class.

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
•  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.

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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.

‘‘Clearstream’’ means Clearstream Banking Luxembourg.

‘‘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 outstanding 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 Internal Revenue Code or the Freddie Mac,
•  any organization, other than a cooperative described in Section 521 of the Internal Revenue Code, that is exempt from federal income tax, except if it is subject to the tax imposed by Section 511 of the Internal Revenue Code, or
•  any organization described in Section 1381(a)(2)(C) of the Internal Revenue Code.

‘‘DRA’’ means the Deficit Reduction Act of 2006.

‘‘DTC’’ means The Depository Trust Company.

‘‘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 Internal Revenue Code, except for some service partnerships and commodity pools.

‘‘EPA’’ means the Environmental Protection Agency.

‘‘ERISA’’ means the Employee Retirement Income Security Act of 1974, as amended.

‘‘ERISA Plan’’ means any employee benefit plan that is subject to the fiduciary responsibility provisions of ERISA.

‘‘ECSPLC’’ means Euroclear Clearance System Public Limited Company.

‘‘Euroclear Operator’’ means Euroclear Bank, S.A./N.V., as operator of the Euroclear System, or any successor entity in that capacity.

‘‘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.

‘‘Exchange Act’’ means the Securities Exchange Act of 1934, as amended.

‘‘Fannie Mae’’ means the Federal National Mortgage Association.

‘‘Farmer Mac’’ means the Federal Agricultural Mortgage Corporation.

‘‘FASB 140’’ means the Financial Accounting Standards Board’s Statement No. 140, entitled ‘‘Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,’’ issued in September 2002.

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‘‘FDIC’’ means the Federal Deposit Insurance Corporation.

‘‘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.

‘‘Internal Revenue Code’’ means the Internal Revenue Code of 1986, as amended.

‘‘I.R.C. Plan’’ means a plan, arrangement or account that is subject to Section 4975 of the Internal Revenue Code, including individual retirement accounts and certain Keogh plans.

‘‘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 Section 4975 of the Internal Revenue 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 an ERISA Plan or an I.R.C. Plan.

‘‘Plan Asset Regulations’’ means the regulations of the U.S. Department of Labor promulgated under ERISA describing what constitutes the assets of a Plan.

‘‘PTE’’ means a Prohibited Transaction Exemption issued by the U.S. Department of Labor.

‘‘RCRA’’ means the federal Resource Conservation and Recovery Act.

‘‘REIT’’ means a real estate investment trust within the meaning of Section 856(a) of the Internal Revenue Code.

‘‘Relief Act’’ means the Servicemembers Civil Relief Act.

‘‘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 Internal Revenue Code.

‘‘Safe Harbor Regulations’’ means the final Treasury regulations issued on July 18, 2002.

‘‘SEC’’ means the Securities and Exchange Commission.

‘‘Securities Act’’ means the Securities Act of 1933, as amended

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‘‘SMMEA’’ means the Secondary Mortgage Market Enhancement Act of 1984, as amended.

‘‘SPA’’ means standard prepayment assumption.

‘‘Title V’’ means Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980.

‘‘Treasury Department’’ means the United States Department of the Treasury.

‘‘UCC’’ means, for any jurisdiction, the Uniform Commercial Code as in effect in that jurisdiction.

‘‘USA Patriot Act’’ means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

‘‘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.

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The attached diskette contains one spreadsheet file that can be put on a user-specified hard drive or network drive. This spreadsheet file is ‘‘LBUBS06C7.xls.’’ The spreadsheet file ‘‘LBUBS06C7.xls’’ is a Microsoft Excel(1), Version 5.0 spreadsheet. The file provides, in electronic format, some of the statistical information that appears under the caption ‘‘Description of the Mortgage Pool’’ in, and on Annexes A-1, A-5 and A-6 to, this prospectus supplement. Capitalized terms used, but not otherwise defined, in the spreadsheet file will have the respective meanings assigned to them in 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 the accompanying base prospectus in its entirety prior to accessing the spreadsheet file.

(1)    Microsoft Excel is a registered trademark of Microsoft Corporation.



Prospectus Supplement


  Page
Important Notice About the Information Contained in This Prospectus Supplement and the Accompanying Base Prospectus S-5
Notice to Residents of Korea S-5
Notice to Residents of Germany S-5
Notice to Non-U.S. Investors S-6
European Economic Area S-6
Summary of Prospectus Supplement S-7
Risk Factors S-45
Capitalized Terms Used in This Prospectus Supplement S-65
Forward-Looking Statements S-65
Description of the Mortgage Pool S-66
Transaction Participants S-159
Affiliations and Certain Relationships and Related Transactions S-173
The Series 2006-C7 Pooling and Servicing Agreement S-175
Servicing of the 1211 Avenue of the Americas Loan Combination and the Triangle Town Center Loan Combination S-216
Description of the Offered Certificates S-219
Yield and Maturity Considerations S-255
Use of Proceeds S-260
Federal Income Tax Consequences S-260
ERISA Considerations S-263
Legal Investment S-266
Method of Distribution S-266
Legal Matters S-268
Ratings S-269
Glossary S-270
ANNEX A-1—Certain Characteristics of Individual Underlying Mortgage Loans A-1
ANNEX A-2—Certain Characteristics of the Mortgage Pool A-2
ANNEX A-3—Certain Characteristics of Loan Group 1 A-3
ANNEX A-4—Certain Characteristics of Loan Group 2 A-4
ANNEX A-5—Certain Monetary Terms of the Underlying Mortgage Loans A-5
ANNEX A-6—Certain Information Regarding Reserves A-6
ANNEX B—Certain Information Regarding Multifamily Properties B
ANNEX C-1—Price/Yield Tables C-1
ANNEX C-2—Decrement Tables C-2
ANNEX D—Form of Distribution Date Statement D
ANNEX E—Reference Rate Schedule E
ANNEX F—Class A-AB Planned Principal Balance Schedule F
ANNEX G—Global Clearance, Settlement and Tax Documentation Procedures G

$2,846,028,000
(Approximate)

LB-UBS Commercial
Mortgage Trust 2006-C7

Commercial Mortgage Pass-Through
Certificates, Series 2006-C7

Class A-1, Class A-2, Class A-AB,
Class A-3, Class A-1A, Class A-M,
Class A-J, Class B, Class C, Class D, Class E,
Class F and Class X-CP

PROSPECTUS SUPPLEMENT

LEHMAN BROTHERS

UBS GLOBAL ASSET MANAGEMENT

KEYBANC CAPITAL MARKETS

CITIGROUP

November 21, 2006