EXECUTION
GE CAPITAL MORTGAGE SERVICES, INC.
REMIC MULTI-CLASS PASS-THROUGH CERTIFICATES
SERIES 1998-HE2
TERMS AGREEMENT
(to Underwriting Agreement,
dated September 24, 1996
between the Company and the Underwriter)
GE Capital Mortgage Services, Inc. New York, New York
Three Executive Campus June 23, 0000
Xxxxxx Xxxx, XX 00000
Prudential Securities Incorporated (the "Underwriter")
agrees, subject to the terms and provisions herein and of the
captioned Underwriting Agreement (the "Underwriting Agreement"),
to purchase the Classes of Series 1998-HE2 Certificates specified
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 1998-HE2 Certificates
are registered with the Securities and Exchange Commission by
means of an effective Registration Statement (No. 333-51151).
Capitalized terms used and not defined herein have the meanings
given them in the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series 1998-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 $59,500,000 6.3650% 99.765769%
Class A2 21,500,000 6.1050 99.772384
Class A3 27,600,000 6.1800 99.753600
Class A4 13,400,000 6.2750 99.747715
Class A5 15,100,000 6.3150 99.734644
Class A6 23,478,000 (1) 99.707077
Class A7 17,800,000 6.2150 99.733523
Class R1 500 0.0000 (2)
Class R2 500 0.0000 (2)
Class M 4,861,000 (1) 99.684388
Class B1 4,375,000 (1) 99.684450
Class B2 1,945,000 (1) 99.685773
-------------------
(1) Interest will accrue on the Class A-6, Class M, Class B1 and
Class B2 Certificates during the initial Interest Accrual
Period at Certificate Interest Rates of 6.6450%, 6.6600%,
6.9050% and 7.4950% per annum, respectively, and during each
subsequent Interest Accrual Period at Certificate Interest
Rates equal to the lesser of (i) 6.6450%, 6.6600%, 6.9050%
and 7.4950% 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 Prudential, equal
to approximately $34,000.00.
(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, 1998, up to, but not
including, June 26, 1998 (the "Closing Date").
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 IBCA, Inc., 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
2
on the cover page of the Final Prospectus, (ii) the last
paragraph on the cover page of the Final Prospectus, (iii) the
second and seventh paragraphs under the caption "Plan of
Distribution", as such information relates to the Offered
Certificates, constitute the only information furnished in
writing by or on behalf of the Underwriter for inclusion in such
Final Prospectus, and the Underwriter confirms 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
Underwriter and the Company.
Very truly yours,
PRUDENTIAL SECURITIES 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:
