CREFC Investor Reporting Package

Loan Modification Report

Sample Template

Transaction

Loan Name / Property Name

Prosup #/Loan #

Preparation Date

Reporting Period (MM/YY)

Pre-Modification Balance / Post-Modification $120,500,000.00 / see A/B Note split below

Balance
Pre-Modification Interest Rate / Post-
Modification Interest Rate
Pre-Modification Amortization Schedule / Post-
Modification Amortization Schedule
Pre-Modification Maturity Date / Post-
Modification Maturity DAte
Paid to Date

Closing Date of Modification

Effective Date of Modification

Non-Trust Fees paid to Special Servicer or

Affiliates

Collateral Description:

A 983,232 square foot regional shopping mall, anchored by Macy's, Sears, Kmart, JC Penney and Regal Cinemas; Macy's and
Sears stores are tenant-owned, leaving 663,948 square feet of gross leasable area as collateral. Center is located XXX.
Collateral Valuation:

Appraisal Appraisal BOV BOV

Firm 1 Firm 2 n/a n/a

2/21/2011 2/29/2012 n/a n/a

As-is Per Unit As-is Per Unit As-is Per Unit As-is Per Unit

$112,000,000 $169.78/SF $100,000,000 $151.59/SF n/a n/a n/a n/a

Stabilized Per Unit Stabilized Per Unit Stabilized Per Unit Stabilized Per Unit

n/a n/a $115,000,000 $174.32/SF n/a n/a n/a n/a

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Collateral Condition – updated reports:

Inspection Environmental Report Engineering Report

Firm A n/a n/a

01/28/2011 n/a n/a

Good condition, no deferred n/a n/a

maintenance

Property Operation Information (identify source and use CREFC Financial Indicator codes where applicable):

FYE FYE FYE FYE

Line Items Original U/W 12/31/2008 12/31/2009 12/31/2010 12/31/2011 BUDGET 2012
YN* YN* YN* YN*
Occupancy 88%

Effective Gross Revenue $13,875,000 $12,506,000 $13,492,000 $12,151,000 $12,781,000 $12,835,000

Total Operating
$4,536,000 $4,916,000 $5,333,000 $4,437,000 $4,595,000 $4,492,000
Expenses

Net Operating Income $9,339,000 $7,590,000 $8,159,000 $7,714,000 $8,186,000 $8,343,000

Scheduled Debt Service

$7,458,000 $7,458,000 $7,458,000 $7,458,000 $7,458,000 $8,213,000
DSCR - NCF 1.25 1.02 1.09 1.03 1.10 1.02

*Borrower submitted statements – Year to Date Normalized

Substantiation:

 Over the five year initial loan term (matured 1/1/2012), the loan sponsor and guarantor made significant progress in its
original business plan of upgrading the quality of tenants and merchandise offerings at the mall to attract higher income
shoppers. Despite the significant impact the housing crisis and the double digit unemployment rate in XXX has had on the
mall, Investcorp was successful in continuing to attract new national brands to the mall in 2010 and 2011. Providing the
Borrower with additional time to achieve their original business plan of repositioning the mall, and to capitalize on the
improving market fundamentals in XXX, creates additional value and generates the highest recovery for this asset.
 The four (4) year extension and modification provides for an immediate repayment of 10% of the original principal balance
($12,000,000) in exchange for subordinating $8,000,000 of original loan principal to a new $13,500,000 mezzanine loan
(12% coupon with a 15% IRR look-back feature) provided by an affiliated debt fund of Investcorp. Unpaid interest on the
mezzanine loan accrues.
 The LTV on the revised $100,500,000 A Note is 99% of the 2012 appraised value. The debt service coverage ratio on the A
note is 1.38x. Unpaid interest on the B note accrues and its collateral rights cannot be foreclosed out by the mezzanine
loan.
 The alternative was to pursue a foreclosure; however, the XXX foreclosure/receivership process is lengthy and uncertain,
creating the risk of deteriorating operating performance and loss of value. Due, in part, to XXX foreclosure laws, note sale
inquiries indicated offers would be significantly below par and appraised value.

New Loan Modification Terms:

1. As of the Effective Date, the Mezzanine Borrower entered into a Mezzanine Loan for $13,500,000 and has contributed
$12,000,000 of these proceeds of the Mezzanine Loan to Borrower for principal paydown and $1,500,000 to other
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costs associated with the modification. Subject to Mortgage Lender approval, Mezzanine Borrower may request one
or more Future Advances from Mezzanine Lender in addition to the original Mezzanine Loan funding of $13,500,000.
All of the proceeds of such Future Advance shall be contributed to Borrower for payment of reasonable legal fees,
tenant improvements costs, leasing commissions, Capital Expenditures, Extraordinary Expenses or other Operating
Expenses incurred by Borrower with respect to the Property, which costs and expenses are not paid from any of the
Reserve Funds. Protective Advances funded by Mezzanine Lender in accordance with the Mezzanine Loan Agreement
shall not be deemed Future Advances and may be made by Mezzanine Lender subject to the terms of an Intercreditor
Agreement.

2. After a principal pay down of $12,000,000.00 (from Mezzanine funds) the Mortgage Loan will be split into an A-Note
and a B-Note structure with the following terms:

A Note: $100,500,000.00 principal balance

 Interest only monthly payments at the current rate of 6.1045%

B Note: $8,000,000.00 principal balance.

 Interest only payments at the current rate of 6.1045%, payable monthly if available from excess cash flow. Any
interest not paid on the Payment Date shall be added to the outstanding principal balance of the B note and
shall accrue interest at the applicable rate.

3. The payment due 02/01/2012 in the amount of $633,426.66 (accrued 01/01/2012 through 01/31/2012) will be
calculated on the Pre-Mod principal balance of $120,500,000 at 6.1045%.

4. The maturity date for both the A and B Note is extended to 01/01/2016.

5. Borrower paid a consent fee to the Mortgage Lender in the amount of $603,000

6. At closing, the remaining $1,500,000 of Mezzanine funds were allocated as follows:

a) Rollover Reserve Account, $236,381.91
b) To reimburse lender fees and costs associated with modification of $242,853.36
c) To reimburse Borrower costs totaling $1,020,764.73

7. Provided that an Event of Default does not exist, funds in the Cash Management Account shall be disbursed in the
following order of priority:
a) amount sufficient to pay any sales tax on monthly Rents
b) Tax Account
c) Insurance Premium Account
d) Debt Service payment
e) Replacement Reserve
f) Any other Lender costs and expenses including late charges
g) Cash Management Bank fees and expenses
h) Borrower for Operating Expenses
i) Borrower for Extraordinary Expenses
j) Mezzanine Lender for current Mezzanine Loan Debt Service payment
k) Mezzanine Lender for prior Mezzanine Loan Debt Service that has not been paid
l) Rollover Reserve
m) Capital Expenditure Reserve
n) Excess Cash Flow Reserve

8. Borrower may prepay the Loan in whole or in part on any date upon satisfaction of the following conditions:
a) Borrower delivers prior written notice to Lender.
b) If Borrower elects to prepay the Loan on or before 01/31/2014, the two (2) year anniversary of the Effective
Date, then Borrower shall pay to Lender an amount, equal to the outstanding principal balance of the A Note
and all accrued and unpaid interest plus the outstanding principal balance of the B Note and all accrued and
unpaid interest.
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c) If Borrower elects to prepay the Loan from and after 01/31/2014 upon a Property Sale or Refinancing of the
Loan, proceeds will be deposited into an escrow account of the title company together with any Reserve funds
and shall be distributed in the following order of priority:
1) A Note principal plus any accrued interest and all other amounts due including late charges.
2) Mezzanine Lenders Additional Return (positive difference between all payments received by Lender and
an amount necessary to achieve the Required Internal Rate of Return (15% per annum) 3) Outstanding
principal amount of the Mezzanine Loan, any Future Advances and any protective Advances made by the
Mezzanine lender.
4) The lesser of (i) 25% of the remaining Net Proceeds and (ii) the outstanding principal balance of the B Note
principal plus any accrued and unpaid interest.
5) Any remaining funds will be paid to Borrower.

However, if there is a material Event of Default, then, Borrower shall owe to Lender an amount equal to the
outstanding principal balance of the A Note and all accrued and unpaid interest, plus the outstanding principal
balance of the B Note and all accrued and unpaid interest.
d) If the Borrower prepays as a result of Refinancing the Property, the amount of principal and interest the
Borrower will be required to pay of the B Note will be determined utilizing an appraisal to establish the
theoretical sale value of the Property in calculating the amount of funds required for distribution.
e) If Borrower prepays the Loan on a date other than the Payment Date, then Borrower shall pay to Lender,
simultaneously with any such prepayment, an amount equal to interest that would have accrued at the
Applicable Interest Rate from such prepayment date through, but excluding, the next occurring Payment Date,
on the amount of principal being prepaid on both the A and the B Note (the “Interest Shortfall”); and
f) Any prepayment of the Loan shall be made without payment of penalty, premium or yield maintenance
amount, provided that any Interest Shortfall shall not be deemed a penalty, premium or yield maintenance
amount and shall be payable if due.

9. Payment on Maturity Date:

a) the outstanding principal balance and any accrued and unpaid interest of the A Note and
b) the outstanding principal balance of the B Note and all accrued and unpaid interest; provided, however, that so long
as a material Event of Default does not exist and (i) Borrower enters into a Property Sale pursuant to Item #7c)
above from or after 01/31/2014 (the two (2) year anniversary of the Effective Date) and on or prior to the Maturity
Date of the Loan, then Borrower shall only be required to pay principal and interest with respect to the B Note to the
extent that sufficient funds are available for distribution to Lender pursuant to Item #7c) above as a result of such
Property Sale or (ii) Borrower elects not to enter into a Property Sale on or prior to the Maturity Date of the Loan,
then Borrower shall be required to pay on the Maturity Date of the Loan principal and interest with respect to the B
Note only to the extent that sufficient funds would have been available for distribution to Lender pursuant to Item
#7 c) above if a Property Sale had occurred, utilizing an appraisal to establish the theoretical sale value. The
Borrower will be required to fund the difference between Refinancing proceeds and the proceeds that would have
been available for distribution to Lender had the Property been sold.

THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL AND IS INTENDED ONLY FOR THOSE PARTIES
ENTITLED TO THIS INFORMATION PURSUANT TO THE TERMS OF THE RELATED POOLING AND SERVICING
AGREEMENT AND/OR THE RELATED INTERCREDITOR AGREEMENT. ANY PERSON OBTAINING THIS
INFORMATION IS PROHIBITED FROM DISCLOSING, COPYING OR DISTRIBUTING THE INFORMATION TO
ANY OTHER PERSON. THE INFORMATION CONTAINED IN THIS REPORT IS FOR INFORMATIONAL
PURPOSES ONLY AND NEITHER THE TRUSTEE NOR THE SPECIAL SERVICER MAKES ANY WARRANTY
WITH RESPECT TO ITS CONTENT, ACCURACY, COMPLETENESS OR TIMELINESS, OR USE FOR ANY
SPECIFIC PURPOSE. NEITHER THE TRUSTEE NOR THE SPECIAL SERVICER IS RESPONSIBLE FOR, AND
EACH EXPRESSLY DISCLAIMS ALL LIABILITY FOR, DAMAGES OF ANY KIND ARISING OUT OF THE USE,
REFERENCE TO, OR RELIANCE ON THE INFORMATION CONTAINED HEREIN. ANY PARTY ACCESSING THIS
INFORMATION ACKNOWLEDGES THAT THIS INFORMATION IS BEING PROVIDED AS PART OF THE DUTIES
OF THE SPECIAL SERVICER UNDER THE TERMS OF THE RELATED POOLING AND SERVICING
AGREEMENT, AND THEREFORE IS SUBJECT TO THE INDEMNIFICATION AND EXCULPATION FROM
LIABILITY AS SET FORTH THEREIN