EXECUTION
GE CAPITAL MORTGAGE SERVICES, INC.
REMIC MULTI-CLASS PASS-THROUGH CERTIFICATES
SERIES 1996-HE4
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 December 20, 0000
Xxxxxx Xxxx, XX 00000
Each of Prudential Securities Incorporated
("Prudential") and PaineWebber Incorporated ("PaineWebber," 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
1996- HE4 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 1996-HE4 Certificates are registered
with the Securities and Exchange Commission by means of an
effective Registration Statement (No. 333-3038). Capitalized
terms used and not defined herein have the meanings given them in
the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series 1996-HE4
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 $64,100,000 6.555% 99.775000%
Class A2 33,800,000 6.460 99.712500
Class A3 23,100,000 6.640 99.735938
Class A4 28,100,000 6.860 99.743750
Class A5 19,700,000 6.985 99.712500
Class A6 15,900,000 7.220 99.728125
Class A7 16,328,000 (1) 99.743750
Class M 7,689,000 (1) 99.453125
Class B1 4,394,000 (1) 99.468750
Class B2 2,746,000 (1) 99.171875
Class R1 500 0.000 (2)
Class R2 500 0.000 (2)
-------------------
(1) Interest will accrue on each of the Class A7, Class M,
Class B1 and Class B2 Certificates during the initial
Interest Accrual Period at a Certificate Interest Rate of
7.495%, 7.645%, 7.795% and 7.985% per annum, respectively,
and during each subsequent Interest Accrual Period at a
Certificate Interest Rate equal to the lesser of (i)
7.495%, 7.645%, 7.795% and 7.985% 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
will be reduced by an amount in respect of the transfer of
the Class R1 and Class R2 Certificates to PaineWebber,
equal to approximately $110,000.
(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 December 1, 1996, up to, but
not including, December 30, 1996 (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 1996-HE4 Certificates specified opposite its
name below.
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Class Prudential PaineWebber
Class A1 $32,050,000 $32,050,000
Class A2 16,900,000 16,900,000
Class A3 11,550,000 11,550,000
Class A4 14,050,000 14,050,000
Class A5 9,850,000 9,850,000
Class A6 7,950,000 7,950,000
Class A7 8,164,000 8,164,000
Class M 7,689,000 0
Class B1 4,394,000 0
Class B2 2,746,000 0
Class R1 0 500
Class R2 0 500
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. ("Fitch"), and the Class M,
Class B1 and Class B2 Certificates shall have received Required
Ratings of at least "AA", "A", and "BBB", respectively, by Fitch.
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 and (iii) the
table under the caption "Plan of Distribution" and the second,
third and fourth 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.
3
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:
PAINEWEBBER 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:
