8-K 1 flb98c02_10502.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 18, 2005 (Date of earliest event reported) Commission File No.: 333-48943-04 First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 (Exact name of registrant as specified in its charter) New York (governing law of Pooling and Servicing Agreement) (State of Incorporation) 52-2107968 52-2107969 52-2107970 52-6929147 (I.R.S. Employer Identification No.) c/o Wells Fargo Bank, N.A. 9062 Old Annapolis Road Columbia, MD 21045 (Address of principal executive offices) (Zip Code) (410) 884-2000 Registrant's Full Telephone Number (Former name, former address and former fiscal year, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR 240.13e-4(c)) ITEM 8.01 Other Events On February 18, 2005, a distribution was made to holders of First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 1998-C2. ITEM 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit Number Description EX-99.1 Monthly report distributed to holders of Commercial Mortgage Pass-Through Certificates, Series 1998-C2, relating to the February 18, 2005 distribution. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 (Registrant) By: Wells Fargo Bank, N.A. as Trustee By: /s/ Beth Belfield, Assistant Vice President By: Beth Belfield, Assistant Vice President Date: February 18, 2005 INDEX TO EXHIBITS Exhibit Number Description EX-99.1 Monthly report distributed to holders of Commercial Mortgage Pass-Through Certificates, Series 1998-C2, relating to the February 18, 2005 distribution. Wells Fargo Bank, N.A. Corporate Trust Services 9062 Old Annapolis Road Columbia, MD 21045-1951 First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 1998-C2 For Additional Information, please contact CTSLink Customer Service (301) 815-6600 Reports Available on the World Wide Web @ www.ctslink.com/cmbs Payment Date: February 18, 2005 Record Date: January 31, 2005 This Trustee refers Certificateholders to recent notices from the Special Servicer in connection with ongoing lawsuits. The notices are currently posted on www.ctslink.com/cmbs. Updates will be posted in this location as they are received from the Special Servicer. Any inquiries on this matter should be directed to the Special Servicer. DISTRIBUTION DATE STATEMENT Table of Contents STATEMENT SECTIONS PAGE(s) Certificate Distribution Detail 2 Certificate Factor Detail 3 Reconciliation Detail 4 Other Required Information 5 Cash Reconciliation 6 Ratings Detail 7 Current Mortgage Loan and Property Stratification Tables 8 - 10 Mortgage Loan Detail 11 - 28 Principal Prepayment Detail 29 Historical Detail 30 Delinquency Loan Detail 31 - 32 Specially Serviced Loan Detail 33 - 38 Modified Loan Detail 39 Liquidated Loan Detail 40 Underwriter Lehman Brothers Inc. 3 World Financial Center New York, NY 10285 Contact: Tricia Hall Phone Number: (212) 526-5850 Underwriter First Union Capital Markets One First Union Center 301 South College Street Charlotte, NC 28288 Contact: Craig M. Lieberman Phone Number: (704) 383-7407 Servicer ORIX Capital Markets, LLC 1717 Main Street, 14th Floor Dallas, TX 75201 Contact: Don Kalescky Phone Number: (214) 237-2294 Special Servicer ORIX Capital Markets, LLC 1717 Main Street, 14th Floor Dallas, TX 75201 Contact: Don Kalescky Phone Number: (214) 237-2294 This report has been compiled from information provided to Wells Fargo Bank, N.A. by various third parties, which may include the Servicer, Master Servicer, Special Servicer and others. Wells Fargo Bank, N.A. has not independently confirmed the accuracy of information received from these third parties and assumes no duty to do so. Wells Fargo Bank, N.A. expressly disclaims any responsibility for the accuracy or completeness of information furnished by third parties. Copyright 2005, Wells Fargo Bank, N.A.

Cash Reconciliation Detail Total Funds Collected Interest: Scheduled Interest 16,730,531.82 Interest reductions due to Nonrecoverability Determinations 0.00 Interest Adjustments 0.00 Deferred Interest 0.00 Net Prepayment Interest Shortfall 0.00 Net Prepayment Interest Excess 0.00 Extension Interest 0.00 Interest Reserve Withdrawal 0.00 Total Interest Collected 16,730,531.82 Principal: Scheduled Principal 4,995,363.26 Unscheduled Principal 19,147,748.41 Principal Prepayments 18,804,966.79 Collection of Principal after Maturity Date 0.00 Recoveries from Liquidation and Insurance Proceeds 342,781.62 Excess of Prior Principal Amounts paid 0.00 Curtailments 0.00 Negative Amortization 0.00 Principal Adjustments 0.00 Total Principal Collected 24,143,111.67 Other: Prepayment Penalties/Yield Maintenance 0.00 Repayment Fees 0.00 Borrower Option Extension Fees 0.00 Equity Payments Received 0.00 Net Swap Counterparty Payments Received 0.00 Total Other Collected: 0.00 Total Funds Collected 40,873,643.49 Total Funds Distributed Fees: Master Servicing Fee 214,176.76 Trustee Fee 2,712.18 Certificate Administration Fee 0.00 Insurer Fee 0.00 Miscellaneous Fee 0.00 Total Fees 216,888.94 Additional Trust Fund Expenses: Reimbursement for Interest on Advances 2,071.78 ASER Amount (958,785.88) Special Servicing Fee 30,690.71 Rating Agency Expenses 0.00 Attorney Fees & Expenses 0.00 Bankruptcy Expense 0.00 Taxes Imposed on Trust Fund 0.00 Non-Recoverable Advances 0.00 Other Expenses 1,206,156.07 Total Additional Trust Fund Expenses 280,132.68 Interest Reserve Deposit 353,661.98 Payments to Certificateholders & Others: Interest Distribution 15,879,848.22 Principal Distribution 24,143,111.70 Prepayment Penalties/Yield Maintenance 0.00 Borrower Option Extension Fees 0.00 Equity Payments Paid 0.00 Net Swap Counterparty Payments Paid 0.00 Total Payments to Certificateholders & Others 40,022,959.92 Total Funds Distributed 40,873,643.52

Net Remaining Loan Operating DSCR Note Maturity Amortization Number Income Date DSCR Date Date Term 355132459 6,774,860.00 09/30/2004 1.62 06/01/1998 05/01/2013 278 440000022 658,139.00 12/31/2003 0.65 04/01/1998 03/01/2028 276 180000396 05/01/1998 07/01/2019 172 149000035 2,163,738.00 09/30/2004 2.74 06/01/1998 05/01/2008 218 180000329 441,106.00 12/31/2004 0.81 03/01/1998 02/01/2008 275 240000160 (649,115.00) 09/30/2003 (1.41) 04/01/1998 03/01/2008 276 240000258 345,185.00 09/30/2003 1.00 05/01/1998 04/01/2008 217 180000295 (67,652.00) 06/30/2004 (0.23) 03/01/1998 02/01/2008 275 240000277 (485,220.00) 12/31/2003 (1.52) 05/01/1998 04/01/2008 217 245114181 330,860.00 09/30/2004 1.42 02/01/1998 01/01/2008 214 240000390 96,280.00 09/30/2003 0.48 04/01/1998 03/01/2008 276 195114158 340,650.00 06/30/2004 1.37 12/01/1997 11/01/2007 176 245114290 253,994.00 09/30/2004 1.22 04/01/1998 03/01/2018 156 (1) Resolution Strategy Code 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD (2) Property Type Code MF - Multi-Family RT - Retail HC - Health Care IN - Industrial WH - Warehouse MH - Mobile Home Park OF - Office MU - Mixed Use LO - Lodging SS - Self Storage OT - Other

Specially Serviced Loan Detail - Part 2 Offering Document Resolution Site Other REO Loan Cross Strategy Inspection Phase 1 Appraisal Appraisal Property Number Reference Code (1) Date Date Date Value Revenue 355132459 5 9 03/27/1998 105,000,000.00 440000022 22 1 9,840,000.00 180000396 52 8 03/03/2004 6,850,000.00 149000035 70 13 09/01/1997 15,200,000.00 180000329 123 2 12/04/1997 8,300,000.00 240000160 160 9 12/27/1997 7,710,000.00 240000258 258 3 06/01/2004 3,300,000.00 180000295 268 2 12/20/2004 2,350,000.00 240000277 277 2 03/05/2004 1,690,000.00 245114181 375 13 03/02/2004 3,170,000.00 240000390 390 7 12/11/2003 1,500,000.00 195114158 398 11 06/30/2003 3,200,000.00 245114290 461 13 01/03/2005 3,000,000.00

Loan Number Comments from Special Servicer 355132459 Please refer to Servicer Reports for comments as they are to lengthy to include. 440000022 Transferred to SS on 7/23/03, due to reasonably foreseeable default. Borrower has sold 3 of the 11 properties (approved by SS). There is still significant risk due to poor tenant mix, market, etc in the 8 remaining properties.The previous Forbearance Agreement terminated upon the sale of 201 S Central, and the Borrower has struggled to pay the monthly payments. A new loan modification has been approved, and the documentation was signed by the Borrower on 1/14/05.The new modification reamortized the loan, changed the maturity date to 3/1/08, added an additional guarantor, and included several items which will reduce the risk of the Borrower filing bankruptcy. 180000396 The Collateral is under contract for $5.355mm. The sale was expected to close by 12/31/04 however the Buyer was sequestered for jury duty for two weeks. OCM agreed to delay closing to 1/7/05. The original Buyer assigned the contract to an investor group; the DD period was extended to 1/6/05 in exchange for an additional $200,000 deposit, of which $10, 000 is non-refundable.The Collateral had been under contract at $6,825,000. At the end of DD the Buyer requested a price reduction of $1.8mm due to alleged structural and mechanical defects. Negotiations to and the Buyer terminated the contract on 10/25. The Brokers approached all previously-interested parties and generated offers from $5.0mm - $5. 355mm. 149000035 The loan is paid current but was transferred due to non-monetary default (subordinate debt). The hotel is currently closed for repairs from Hurricane Ivan in 2004, but is scheduled to re-open in June 2005. Initial insurance proceeds for repair costs/business interruption expenses are being held in a Reserve account. 180000329 Loan Transferred due to monetary default. Borrower is due for the December 2004 pmt. A TRO was obtained on 1/31/05 to prevent the Borrower from taking Feb. 05 rents from the property before a receiver can be appointed. Legal Counsel is working to get a receiver appointed, and the foreclosure scheduled. 240000160 Transferred to Special Servicing due to Imminent Default; 5/24/02 explosion and fire caused by tenant destroyed 10 units and damaged approx. 40 others. Property is 100% vacant during repairs/renovation.Asbestos abatement issues resolved and major constru ction is progressing well, though slower than expected. Construction is being monitored on a weekly basis. Rental interruption insurance payments were paid through May 2003. Borrower is now making debt service from own funds. The Borrower has significant equity in the property and no payment default is anticipated. Borrower claims all repairs will be completed by end of March 2005. 240000258 The borrower is not in bankruptcy. HMH Associates, Inc., one of the three GP's for this loan (d/b/a HMH Management Company, d/b/a Lynnwood Manor Health Care Center), filed for voluntary Chapter 11 bankruptcy on 4/20/2004. New appraisal ($3,300,000- 6/01 /2004) received and accepted. Borrower ceased making monthly loan payments on 8/1/2004. Operating/financial information requested by OCM was not provided. Notices of default sent regarding (a) reporting and (b) bankruptcy filing by HMH Assoc. (GP).Borrower provided delinquent property reporting information (financial/operating). No further payments have been made since December 2004. Reporting information for the current period has been satisfied. Agreed order for lift from stay (1/21/05) - Parkway foreclosure complaint amended to include Lynnwood & Agreed order for appointment of receiver signed (2/1/05) - Receiver operating facility, preparing operating budget & cash flow projections. 180000295 Collateral is a 157-unit apartment complex in Victoria, TX. Transferred to Special Servicing 9/11/03 due to Borrower's request for debt service relief for 1 year. Monetary default subsequently occurred in 9/03. Winstead Secrest engaged to represent the trust. Borrower reinstated the loan on 1/28/04.Borrower again defaulted on 5/1/04 payment. Borrower reinstated in 6/04 after f/c was initiated. F/C was subsequently terminated. Borrower defaulted on 11/1/04 payment. On 11/24/04, Borrower sent letter requesting D.I.L. or loan modification.Anticipate foreclosure on 4/5/2005 if an agreement is not reached with Borrower. Most recent appraised value is $2,350,000 as of 12/11/04.Property is 72.6% occupied. YE (12/31/2004) operating analysis indicates 0.23 DSCR. Dismal performance is due to market pressures and reduced rents.Collateral is in good condition per 12/8/04 inspection report. Updated appraisal and Phase I ESA have been received. 240000277 Please refer to Servicer Reports for comments as they are to lengthy to include. 245114181 Borrower did not provide adequate liability insurance coverage per loan documents ($4MM required in Sec. 1.4 of the Deed of Trust). The borrower's request for acceptance of a lesser amount was rejected. Loan transferred to Special Servicer 12/4/03.Force place coverage obtained by Primary-Servicer 12/17/03. Premium paid from funds held in the insurance escrow account. Notice of default sent to borrower 1/22/04. Inspection complete 2/19/04. Property in good condition (95% occupied). New appraisal reviewed and accepted $3.17MM (3/02/2004).Borrower continues to make monthly loan payments. Borrower's proposed discounted payoff (including partial default interest/prepayment consideration) was rejected by OCM. Counter-proposal for loan modification has been made. The borrower has responded by increasing its offer in settlement of this matter. The Special Servicer is now considering the proposal.Nothing new to report this month. 240000390 The Collateral had been under contract for $1,912,500 with $100,000 non-refundable earnest money and closing no later than 12/16/04. However, the Buyer did not perform on the settlement date as required by the contract. A notice of default was sent to b uyer on December 17, 2004 that provided for a 5-day cure period. This cure period expired at 5:00 pm on December 22, 2004. A demand notice was delivered to the title company on December 23, 2004 which terminated the contract and requested thetransfer of the earnest money. A letter was also sent to Buyer providing for an extension assuming buyer could provide a date certain closing. In return of the extension, OCM requested an additional $50,000 of immediately hard earnest money. OCM intends to enforce settlement of the contract rather than taking the property back to market. 195114158 ML transferred due to chronic slow pay and due to low DSCR; Borrower has maintained ML current; after review of operating statements determined that Borrower had been overstating expense which resulted in lower DSCR; after adjustments.License agreement wa s renewed w/o obtaining new tri-party agreement - in process of curing this deficiency. Counsel engaged to assist in documentation issues w/ tri-party agreement - Borrower working to resolve non-monetary defaults.Due to numerous non-monetary defaults and inability of Borrower to cure several in a timely manner, Borrower attempting to refinance loan and payoff ML. A forbearance agreement has been negotiated and approved,which includes full payoff by 3/31/05 with waiver of default interestand prepayment premium. Document evidencing the agreement has been signed by the parties and the first two payments under the agreement has been received. 245114290 Loan Transferred due to monetary default. Borrower paid 7/1/04 and 8/1/04 monthly payments during September. Borrower indicated he was unable to make timely payments due to capital expenditures completed at the property, which costs ran over budget.Borrower stated he would make best efforts to bring the loan current in relation to monthly payments during October and December, but failed to do so. A Forbearance Agreement was negotiated and approved, which requires the loan to be current by 3/31/05, and the Borrower has to pay a portion of Default Interest, all late fees, and Noteholders expenses. In addition, the Borrower had to provide a Consent Order in which the Borrower stipulates to the appointment of a receiver if he defaults again. (1) Resolution Strategy Code 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD

Modified Loan Detail Loan Modification Description Number 440000022 240000148 Chapter 11 plan was confirmed. Loan was reinstated. Maturity date extened by one year. All attorney fees were reimbursed. Loan returned to Servicer as a corrected loan. 440000425 Prior borrower filed BK. Assumption/modification negotiated by BK court. Arrearage capitalized onto Prin Bal. Note reamortized and monthly payment increased.

FIRST UNION LEH BRO BANK OF AMER COM MOR PA TH CE SE 1998-C2 8-K