EXECUTION
GE CAPITAL MORTGAGE SERVICES, INC.
REMIC MULTI-CLASS PASS-THROUGH CERTIFICATES
SERIES 1997-HE2
TERMS AGREEMENT
(to Underwriting Agreement,
dated September 24, 1996
between the Company and the Underwriters)
GE Capital Mortgage Services, Inc. New York, New York
Three Executive Campus June 20, 0000
Xxxxxx Xxxx, XX 00000
Each of Prudential Securities Incorporated
("Prudential") and Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx", and each an "Underwriter" and collectively the
"Underwriters") agrees, severally and not jointly, subject to the
terms and provisions herein and of the captioned Underwriting
Agreement (the "Underwriting Agreement"), to purchase the Classes
of Series 1997- HE2 Certificates specified beneath its name in
Section 3 hereof (the "Offered Certificates"). This Terms
Agreement supplements and modifies the Underwriting Agreement
solely as it relates to the purchase and sale of the Offered
Certificates described below. The Series 1997-HE2 Certificates
are registered with the Securities and Exchange Commission by
means of an effective Registration Statement (No. 333-24935).
Capitalized terms used and not defined herein have the meanings
given them in the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series 1997-HE2
Certificates shall evidence the entire beneficial ownership
interest in a mortgage pool (the "Mortgage Pool") of closed end,
fixed rate, first- or second-lien, home equity mortgage loans
(the "Mortgage Loans") having the characteristics described in
the Final Prospectus.
Section 2. The Certificates: The Offered Certificates
shall be issued as follows:
(a) Classes: The Offered Certificates shall be issued
with the following Class designations, interest rates and
principal balances subject in the aggregate to a variance
described in the Final Prospectus:
Principal Interest Class Purchase
Class Balance Rate Price Percentage
----- ------- ---- ----------------
Class A1 $66,800,000 6.7400% 99.759375%
Class A2 42,100,000 6.7450 99.775000
Class A3 21,800,000 6.8950 99.775000
Class A4 30,300,000 7.0800 99.775000
Class A5 13,700,000 7.1850 99.743750
Class A6 27,145,000 7.4850 99.728125
Class A7 22,428,000 7.1200 99.775000
Class M 6,112,000 (1) 99.453125
Class B1 6,112,000 (1) 99.515625
Class B2 1,834,000 (1) 99.500000
Class R1 500 0.0000 (2)
Class R2 500 0.0000 (2)
-------------------
(1) Interest will accrue on the Class M, Class B1 and Class B2
Certificates during the initial Interest Accrual Period at
Certificate Interest Rates of 7.410%, 7.5850% and 7.9250%
per annum, respectively, and during each subsequent
Interest Accrual Period at Certificate Interest Rates equal
to the lesser of (i) 7.410%, 7.5850% and 7.9250% per annum,
respectively, and (ii) the Weighted Average Net Mortgage
Rate of the Mortgage Loans as of the first day of the
related Interest Accrual Period.
(2) The aggregate Purchase Price of the Offered Certificates
purchased by Prudential will be reduced by an amount in
respect of the transfer of the Class R1 and Class R2
Certificates to Prudential, equal to approximately
$70,000.00.
(b) The Offered Certificates shall have such other
characteristics as described in the Final Prospectus.
Section 3. Purchase Price: The Purchase Price for each
Class of the Offered Certificates shall be the Class Purchase
Price Percentage therefor (as set forth in Section 2(a) above) of
the initial Class Certificate Principal Balance thereof plus
accrued interest at the applicable interest rate per annum of
each such Class from and including June 1, 1997, up to, but not
including, June 26, 1997 (the "Closing Date").
Each of the Underwriters agrees, severally and not jointly,
subject to the terms and provisions herein and of the captioned
Underwriting Agreement, to purchase the principal balances of the
Classes of Series 1997-HE2 Certificates specified opposite its
name below.
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Class Prudential Xxxxxx Xxxxxxx
----- ---------- --------------
Class A1 $33,400,000 $33,400,000
Class A2 21,050,000 21,050,000
Class A3 10,900,000 10,900,000
Class A4 15,150,000 15,150,000
Class A5 6,850,000 6,850,000
Class A6 13,573,000 13,572,000
Class A7 11,214,000 11,214,000
Class M 6,112,000 0
Class B1 6,112,000 0
Class B2 1,834,000 0
Class R1 500 0
Class R2 500 0
Section 4. Required Ratings: The Class A1, Class A2,
Class A3, Class A4, Class A5, Class A6, Class A7, Class R1 and
Class R2 Certificates shall have received Required Ratings of at
least "Aaa" from Xxxxx'x Investors Service ("Moody's") and "AAA"
from Fitch Investors Service, L.P., and the Class M, Class B1 and
Class B2 Certificates shall have received Required Ratings of at
xxxxx "Xx0", "X0", xxx "Xxx0", respectively, by Moody's.
Section 5. Tax Treatment: One or more elections will
be made to treat the assets of the Trust Fund as a REMIC (other
than assets excluded from a REMIC as described in the Final
Prospectus).
Section 6: Underwriter-Provided Information: The
Company acknowledges that the information set forth in (i) the
second sentence of the paragraph immediately preceding the table
on the cover page of the Final Prospectus, (ii) the last
paragraph on the cover page of the Final Prospectus, (iii) the
first table under the caption "Plan of Distribution" and the
third sentence immediately thereafter in the Final Prospectus and
(iv) the second table under the caption "Plan of Distribution"
and the first and ninth sentences immediately thereafter in the
Final Prospectus, as such information relates to the Offered
Certificates, constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in such
Final Prospectus, and the Underwriters confirm that such
statements are correct.
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If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
undersigned a counterpart hereof, whereupon this letter and your
acceptance shall represent a binding agreement between the
Underwriters and the Company.
Very truly yours,
PRUDENTIAL SECURITIES INCORPORATED
By:________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By:________________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
GE CAPITAL MORTGAGE SERVICES, INC.
By:______________________________
Name:
Title:
