Execution
GE CAPITAL MORTGAGE SERVICES, INC.
PASS-THROUGH CERTIFICATES
(Issuable in Series)
UNDERWRITING AGREEMENT
Prudential Securities Incorporated New York, New York
One New York Plaza September 24, 0000
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
GE Capital Mortgage Services, Inc., a corporation organized and existing
under the laws of the State of New Jersey (the "Company"), may offer for sale
from time to time its Pass-Through Certificates evidencing interests in pools of
mortgage loans (the "Certificates"). The Certificates may be issued in various
series, and within each series, in one or more classes, in one or more offerings
on terms determined at the time of sale (each such series, a "Series" and each
such class, a "Class"). Each Series of the Certificates will be issued under a
separate Pooling and Servicing Agreement (each, a "Pooling and Servicing
Agreement") to be dated as of the respective cut-off date (each, a "Cut-off
Date") between the Company, as seller and servicer, and the trustee named
therein (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the related Pooling and Servicing Agreement.
The Certificates issued under each Pooling and Servicing Agreement will
represent the entire beneficial ownership interest in a trust fund (the "Trust
Fund") established by such Pooling and Servicing Agreement. The assets of each
Trust Fund will consist primarily of a pool of closed end, fixed rate, first- or
second-lien, home equity mortgage loans (the "Mortgage Loans") having the
original terms to maturity, interest rate types and amortization characteristics
specified in the related Terms Agreement referred to hereinbelow. If specified
in the related Prospectus Supplement, the Certificates will have the benefit of
a Supplemental Agreement, dated as of the respective Cut-off Date (the
"Supplemental Agreement"), among the Company, General Electric Capital
Corporation ("GECC") and the Trustee. If so specified in the related Terms
Agreement, one or more elections may be made to treat the assets of each Trust
Fund as a real estate mortgage investment conduit (each, a "REMIC") for federal
income tax purposes.
Underwritten offerings of Certificates may be made through you or through
an underwriting syndicate managed by you. The Company proposes to sell one or
more Series of the Certificates to you and to each of the other several
underwriters, if any, participating in an underwriting syndicate managed by you.
It is understood, however, that the Company may elect to retain, through the
execution of one or more underwriting agreements in addition to this Agreement,
one or more additional underwriters other than you to underwrite, or manage the
underwriting syndicate with respect to, any offering of one or more Series of
its Certificates.
Whenever the Company determines to make an offering of Certificates (each,
a "Certificate Offering") pursuant to this Agreement through you, it will enter
into an agreement with you (the "Terms Agreement") providing for the sale of
specified Classes of Offered Certificates (as defined below) to, and the
purchase and public offering thereof by, you and such other underwriters, if
any, selected by you as have authorized you to enter into such Terms Agreement
on their behalf (the underwriters designated in any such Terms Agreement being
referred to herein as "Underwriters," which term shall include you whether
acting alone in the sale of any Offered Certificates of any series or as a
member of an underwriting syndicate). Each such Certificate Offering which the
Company elects to make pursuant to this Agreement shall be governed by this
Agreement, as supplemented by the related Terms Agreement, and this Agreement
and such Terms Agreement shall inure to the benefit of and be binding upon each
underwriter participating in the offering of such Offered Certificates. Each
Terms Agreement, which shall be substantially in the form of Exhibit A hereto,
shall specify, among other things, the Classes of Certificates to be purchased
by the Underwriters (the "Offered Certificates"), the principal balance or
balances of the Offered Certificates, each subject to any stated variance, the
names of the Underwriters participating in such offering (subject to
substitution as provided in Section 12 hereof) and the price or prices at which
such Offered Certificates are to be purchased by the Underwriters from the
Company.
1. Representations and Warranties. (a) The Company represents and warrants
to and agrees with the Underwriters, as of the date of the related Terms
Agreement, that:
(i) The registration statement specified in the related Terms
Agreement, on Form S-3, including a prospectus, has been filed with the
Securities and Exchange Commission (the "Commission") for the registration
under the Securities Act of 1933, as amended (the "Act"), of pass-through
certificates issuable in series, which registration statement has been
declared effective by the Commission. Such registration statement, as
amended to the date of the related Terms Agreement, including any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act which were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or before the effective date of the Registration
Statement, is hereinafter called the "Registration Statement," and such
prospectus, as such prospectus is supplemented by a prospectus supplement
relating to the Offered Certificates of the related Series, each in the
form first filed after the date of the related Terms Agreement pursuant to
Rule 424(b) under the Act, including any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act which were
filed under the Exchange Act on or before the date of such Prospectus
Supplement (other than any such incorporated documents that relate to
Collateral Term Sheets (as defined herein)) (such prospectus supplement,
including such incorporated documents (other than those that relate to
Collateral Term Sheets), in the form first filed after the date of the
related Terms Agreement pursuant to Rule 424(b) is hereinafter called the
"Prospectus Supplement"), is hereinafter called the "Final Prospectus". Any
preliminary prospectus, including any preliminary prospectus supplement
which, as completed, is proposed to be used in connection with the sale of
a Series of Offered Certificates and any prospectus filed with the
Commission pursuant to Rule 424(a) of the Act is hereinafter referred to as
a "Preliminary Prospectus"; it being understood that the Company is not
obligated to prepare any such Preliminary Prospectus without its consent.
Any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Preliminary Prospectus, the
Final Prospectus or the Prospectus Supplement shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
effective date of the Registration Statement or the issue date of the
Preliminary Prospectus, the Final Prospectus or Prospectus Supplement, as
the case may be, deemed to be incorporated therein by reference pursuant to
Item 12 of Form S-3 under the Act.
(ii) The related Registration Statement, at the time it became
effective, and the prospectus contained therein, and any amendments thereof
and supplements thereto filed prior to the date of the related Terms
Agreement, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder; on the date
of the related Terms Agreement and on each Closing Date (as defined in
Section 3 below), the related Registration Statement and the related Final
Prospectus, and any amendments thereof and supplements thereto, will
conform in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder; such Registration
Statement, at the time it became effective, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; such Final Prospectus, on the date of any filing pursuant to
Rule 424(b) and on each Closing Date, will not include any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading; and the Detailed Description referred to in such
Final Prospectus, on each Closing Date and the date of any filing thereof
under cover of Form 8-K, will not include any untrue statement of a
material fact or omit to state any information which such Final Prospectus
states will be included in such Detailed Description; provided, however,
that the Company makes no representations or warranties as to the
information contained in or omitted from (A) such Registration Statement or
such Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriters specifically for use in the preparation thereof
or (B) any Current Report (as defined in Section 5(b) below), or in any
amendment thereof or supplement thereto, incorporated by reference in such
Registration Statement or such Final Prospectus (or any amendment thereof
or supplement thereto).
(iii) The Certificates of the related Series will conform to the
description thereof contained in the related Final Prospectus; and will
each on the related Closing Date be duly and validly authorized, and, when
validly executed, countersigned, issued and delivered in accordance with
the related Pooling and Servicing Agreement and sold to you as provided
herein and in the related Terms Agreement, will each be validly issued and
outstanding and entitled to the benefits of the related Pooling and
Servicing Agreement.
(iv) Neither the issuance nor sale of the Certificates of the related
Series nor the consummation of any other of the transactions herein
contemplated, nor the fulfillment of the terms hereof or of the related
Terms Agreement, will conflict with any statute, order or regulation
applicable to the Company of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Company or with
any organizational document of the Company or any instrument or any
agreement under which the Company is bound or to which it is a party.
(v) This Agreement and the related Terms Agreement have been duly
authorized, executed and delivered by the Company.
(vi) At or prior to the related Closing Date, the Company will have
entered into the related Pooling and Servicing Agreement and, if
applicable, the related Supplemental Agreement and, assuming the due
authorization, execution and delivery thereof by the Trustee, and by GECC,
in the case of the Supplemental Agreement, such Pooling and Servicing
Agreement and such Supplemental Agreement (each on such Closing Date) will
each constitute the valid and binding agreement of the Company enforceable
in accordance with its terms, subject as to enforceability, to bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights and to general principles of equity (regardless of whether the
enforceability of each such Pooling and Servicing Agreement or such
Supplemental Agreement is considered in a proceeding in equity or at law).
2. Purchase and Sale. Subject to the execution of the Terms Agreement for a
particular Certificate Offering and subject to the terms and conditions and in
reliance upon the representations and warranties set forth in this Agreement and
such Terms Agreement, the Company agrees to sell to each Underwriter, severally
and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, the respective original principal amounts of the
related Offered Certificates set forth in the related Terms Agreement opposite
the name of such Underwriter, plus any additional original principal amount of
Offered Certificates which such Underwriter may be obligated to purchase
pursuant to Section 12 hereof, at the purchase price therefor set forth in such
Terms Agreement (the "Purchase Price").
The parties hereto agree that settlement for all securities sold pursuant
to this Agreement and the applicable Terms Agreement shall take place on the
settlement date agreed upon at the time of the related transaction and set forth
as the "Closing Date" in such Terms Agreement and not as set forth in Rule
15c6-1(a) of the Exchange Act.
3. Delivery and Payment. Delivery of and payment for the Offered
Certificates of a Series shall be made at the offices of Cleary, Gottlieb, Xxxxx
& Xxxxxxxx, New York, New York, at 10:00 A.M., New York City time, on the
Closing Date specified in the related Terms Agreement, which date and time may
be postponed by agreement between the Underwriters and the Company (such date
and time being herein called the "Closing Date"). Delivery of such Offered
Certificates shall be made to the Underwriters against payment by the
Underwriters of the Purchase Price thereof to or upon the order of the Company
by wire transfer in federal or other immediately available funds or by check
payable in federal funds, as the Company shall specify no later than five full
business days prior to such Closing Date. Unless delivery is made through the
facilities of The Depository Trust Company, the Offered Certificates shall be
registered in such names and in such authorized denominations as the
Underwriters may request not less than two full business days in advance of each
Closing Date.
The Company agrees to notify the Underwriters at least two business days
before each Closing Date of the exact principal balance evidenced by the Offered
Certificates and to have such Offered Certificates available for inspection,
checking and packaging in New York, New York, no later than 12:00 noon on the
business day prior to such Closing Date.
4. Offering by the Underwriters. It is understood that the Underwriters
propose to offer the Offered Certificates of the related Series for sale to the
public as set forth in the related Final Prospectus.
5. Agreements. The Company agrees with the Underwriters that:
(a) The Company will cause the each of the Preliminary Prospectus and
the Final Prospectus as supplemented by a Prospectus Supplement relating to
the Offered Certificates to be filed pursuant to Rule 424 under the Act and
will promptly advise the Underwriters when such Preliminary Prospectus and
such Final Prospectus as so supplemented has been so filed, and prior to
the termination of the Certificate Offering to which such Preliminary
Prospectus and Final Prospectus relates also will promptly advise the
Underwriters (i) when any amendment to the related Registration Statement
specifically relating to such Offered Certificates shall have become
effective or any further supplement to such Preliminary Prospectus or such
Final Prospectus has been filed, (ii) of any request by the Commission for
any amendment of such Registration Statement, Preliminary Prospectus or
Final Prospectus or for any additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of such
Registration Statement or the institution or threatening of any proceeding
for that purpose and (iv) of the receipt by the Company of any written
notification with respect to the suspension of the qualification of such
Offered Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will not file
any amendment of the related Registration Statement or supplement to the
related Preliminary Prospectus or Final Prospectus (other than any
amendment or supplement specifically relating to one or more Series of
pass-through certificates other than the Series that includes the related
Offered Certificates) unless the Company has furnished the Underwriters
with a copy for its review prior to filing. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to
the Offered Certificates of a Series that are delivered by an Underwriter
to the Company pursuant to Section 8 to be filed with the Commission on a
Current Report on Form 8-K (each such filing of such materials, a "Current
Report") pursuant to Rule 13a-11 under the Exchange Act on the business day
immediately following the later of (i) the day on which such Computational
Materials and Structural Term Sheets are delivered to counsel for the
Company by an Underwriter prior to 10:30 a.m. and (ii) the date on which
this Agreement is executed and delivered. The Company will cause one
Collateral Term Sheet (as defined in Section 9 below) with respect to the
Offered Certificates of a Series that is delivered by the Underwriters to
the Company in accordance with the provisions of Section 9 to be filed with
the Commission on a Current Report pursuant to Rule 13a-11 under the
Exchange Act on the business day immediately following the day on which
such Collateral Term Sheet is delivered to counsel for the Company by the
Underwriters prior to 10:30 a.m. In addition, if at any time prior to the
availability of the related Prospectus Supplement, the Underwriters have
delivered to any prospective investor a subsequent Collateral Term Sheet
that reflects, in the reasonable judgment of the Underwriters and the
Company, a material change in the characteristics of the Mortgage Loans for
the related Series from those on which a Collateral Term Sheet with respect
to the related Series previously filed with the Commission was based, the
Company will cause any such Collateral Term Sheet that is delivered by the
Underwriters to the Company in accordance with the provisions of Section 9
to be filed with the Commission on a Current Report on the business day
immediately following the day on which such Collateral Term Sheet is
delivered to counsel for the Company by the Underwriters prior to 10:30
a.m. In each case, the Company will promptly advise the Underwriters when
such Current Report has been so filed. Each such Current Report shall be
incorporated by reference in the related Final Prospectus and the related
Registration Statement. Notwithstanding the five preceding sentences, the
Company shall have no obligation to file any materials provided by the
Underwriters pursuant to Sections 8 and 9 which, in the reasonable
determination of the Company after making reasonable efforts to consult
with the Underwriters, are not required to be filed pursuant to the Xxxxxx
Letters or the PSA Letter (each as defined in Section 8 below), or which
contain erroneous information or contain any untrue statement of a material
fact or, when read in conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being
understood, however, that the Company shall have no obligation to review or
pass upon the accuracy or adequacy of, or to correct, any Computational
Materials, Structural Term Sheets or Collateral Term Sheets provided by the
Underwriters to the Company pursuant to Section 8 or Section 9 hereof. The
Company shall give notice to the Underwriters of its determination not to
file any materials pursuant to clause (i) of the preceding sentence and
agrees to file such materials if the Underwriters reasonably object to such
determination within one business day after receipt of such notice.
(c) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, any
event occurs as a result of which the related Final Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, or if it shall be necessary at any time to amend or supplement
the related Final Prospectus to comply with the Act or the rules
thereunder, the Company promptly will prepare and file with the Commission,
subject to paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; provided, however, that the Company will not be
required to file any such amendment or supplement with respect to any
Computational Materials, Structural Term Sheets or Collateral Term Sheets
incorporated by reference in the Final Prospectus other than any amendments
or supplements of such Computational Materials or Structural Term Sheets
that are furnished to the Company by the Under- writers pursuant to Section
8(e) hereof or any amendments or supplements of such Collateral Term Sheets
that are furnished to the Company by the Underwriters pursuant to Section
9(d) hereof which are required to be filed in accordance therewith.
(d) The Company will furnish to the Underwriters and counsel for the
Underwriters, without charge, as many signed copies of the related
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by the Underwriters or dealer may be required by
the Act, as many copies of the related Preliminary Prospectus and the
related Final Prospectus and any supplements thereto (other than exhibits
to the related Current Report) as the Underwriters may reasonably request.
(e) The Company will furnish such information, execute such
instruments and take such actions as may be reasonably requested by the
Underwriters to qualify the Offered Certificates of a Series for sale under
the laws of such jurisdictions as the Underwriters may designate, to
maintain such qualifications in effect so long as required for the
distribution of such Offered Certificates and to determine the legality of
such Offered Certificates for purchase by institutional investors;
provided, however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not qualified on the date of the
related Terms Agreement or to take any action which would subject it to
general or unlimited service of process in any jurisdiction in which it is
not, on the date of the related Terms Agreement, subject to such service of
process.
(f) So long as the Offered Certificates of a Series are outstanding,
the Company will furnish to the Underwriters copies of the annual
independent public accountants' servicing report furnished to the Trustee
pursuant to Section 3.13 of the related Pooling and Servicing Agreement.
(g) Whether or not the transactions contemplated hereby and by the
related Terms Agreement shall be consummated, the Company shall be
responsible for the payment of any costs and expenses for which details are
submitted, in connection with the performance of its obligations under this
Agreement and the related Terms Agreement, including, without limitation,
(a) the cost and expenses of printing or otherwise reproducing the related
Registration Statement, the related Preliminary Prospectus, the related
Final Prospectus, this Agreement, the related Terms Agreement, the related
Pooling and Servicing Agreement and the Offered Certificates, and (b) the
cost of delivering the related Offered Certificates to the office of the
Underwriters, insured to the satisfaction of the Underwriters (it being
understood that, except as provided in this paragraph (g) and in Section 7
hereof, the Underwriters will pay all their own costs and expenses,
including the fees of Xxxxx & Xxxx LLP, counsel for the Underwriters,
transfer taxes on resale of any Offered Certificates by them, advertising
expenses connected with any offers that they may make, the fees of KPMG
Peat Marwick LLP with respect to its letters furnished pursuant to Section
6(l) of the Agreement and any letter furnished pursuant to the last
sentence of Section 6(k) hereof, the fees of any firm of public accountants
selected by the Underwriters with respect to their letter furnished
pursuant to Section 8(c) of the Agreement and any other costs and expenses
specified in the related Terms Agreement as "Additional Expenses", and all
expenses (e.g., shipping, postage and courier costs) associated with the
delivery of the related Prospectus to prospective investors and investors,
other than the costs of delivery to the Underwriter's facilities, provided,
that if courier services (other than overnight delivery services utilized
in the ordinary course of business) are required to ensure that such
Prospectus is delivered to investors on the day immediately preceding the
related Closing Date, the Company will pay such courier expenses).
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Offered Certificates of any Series shall be
subject to the accuracy in all material respects of the representations and
warranties on the part of the Company contained in this Agreement, as
supplemented by the related Terms Agreement, as of the respective dates thereof
and the related Closing Date, to the accuracy of the statements of the Company
made in any applicable officers' certificates pursuant to the provisions hereof,
to the performance by the Company of its obligations under this Agreement and
such Terms Agreement and to the following additional conditions applicable to
the related Certificate Offering:
(a) No stop order suspending the effectiveness of the related
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Company, shall
have furnished to the Underwriters an opinion, dated the related Closing
Date, to the effect that:
(i) this Agreement and the related Terms Agreement have been duly
executed and delivered by the Company under the law of the State of
New York;
(ii) each of the related Pooling and Servicing Agreement and, if
applicable, the related Supplemental Agreement has been duly executed
and delivered by the Company under the law of the State of New York
and is a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms;
(iii) the Offered Certificates, when duly executed and
countersigned by the Trustee in accordance with the related Pooling
and Servicing Agreement, will be validly issued and outstanding and
entitled to the benefits of such Pooling and Servicing Agreement;
(iv) the related Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as amended, and
the trust created thereunder is not required to be registered under
the Investment Company Act of 1940, as amended;
(v) such counsel confirms that (based solely upon telephonic
confirmation from a representative of the Commission) the related
Registration Statement is effective under the Act and, to the best of
such counsel's knowledge, no stop order with respect thereto has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission under the Act; such Registration
Statement (except the financial statements and schedules and other
financial and statistical data included therein and the documents
incorporated by reference therein, as to which such counsel need
express no view), at the time it became effective and the related
Final Prospectus (except the financial statements and schedules and
the other financial and statistical data included therein, the
documents incorporated by reference therein and any
Underwriter-Provided Information (as defined herein) as to which such
counsel need express no view), as of the date of the Prospectus
Supplement, appeared on their face to be appropriately responsive in
all material respects to the requirements of the Act and the rules and
regulations thereunder; and no information has come to the attention
of such counsel that causes it to believe that (A) such Registration
Statement (except the financial statements and schedules and the other
financial and statistical data included therein and the documents
incorporated by reference therein, as to which such counsel need
express no view) at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (B) such Final Prospectus or any amendment
or supplement thereto (except the financial statements and schedules
and the other financial and statistical data included therein and the
documents incorporated by reference therein and any
Underwriter-Provided Information, as to which such counsel need
express no view), as of the date of the Prospectus Supplement or at
the related Closing Date, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) the statements set forth under the heading "Description of
the Certificates" in the related Final Prospectus, insofar as such
statements purport to summarize certain provisions of the related
Pooling and Servicing Agreement and the related Offered Certificates,
provide a fair summary of such provisions;
(vii) the statements set forth in the related Final Prospectus
under the headings "Certain Legal Aspects of the Mortgage Loans and
Contracts --The Mortgage Loans", "Certain Federal Income Tax
Consequences" (insofar as they relate specifically to the purchase,
ownership and disposition of the related Offered Certificates) and
"ERISA Considerations" (insofar as they relate specifically to the
purchase, ownership and disposition of such Offered Certificates), to
the extent that they constitute matters of law or legal conclusions,
provide a fair summary of such law or conclusions; and
(viii) assuming compliance with all provisions of the related
Pooling and Servicing Agreement, for federal income tax purposes, (A)
if any election is made to treat the assets of the Trust Fund (other
than assets excluded from a REMIC, as described in the Final
Prospectus) as one or more REMICs: the related Trust Fund and any
specified subgrouping therein (other than any such excluded assets)
will qualify as one or more REMICs pursuant to Section 860D of the
Internal Revenue Code of 1986, as amended (the "Code"), each Class of
Certificates of the related Series, other than the related Residual
Class or Classes, will constitute a class of "regular interests" in a
related REMIC within the meaning of the Code, and each Class of such
Certificates specified in the related Final Prospectus as a Class of
Residual Certificates will constitute the "residual interest" in a
related REMIC within the meaning of the Code; (B) if no such REMIC
election is made: the Trust Fund will be treated as a "grantor trust".
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by, officers of the parties to this Agreement, the related Terms
Agreement, the related Pooling and Servicing Agreement or the related Supplement
Agreement. Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties thereto
other than the Company. Such opinion may be qualified, insofar as it concerns
the enforceability of the documents referred to therein, to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights in general and by
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law). Such opinion may be further qualified as
expressing no opinion as to (x) the statements in the related Final Prospectus
under the heading "Certain Legal Aspects of the Mortgage Loans and Contracts --
The Mortgage Loans" except insofar as such statements relate to the laws of the
State of New York and the laws of the United States, and (y) the statements in
such Final Prospectus under the headings "ERISA Considerations" and "Certain
Federal Income Tax Consequences" except insofar as such statements relate to the
laws of the United States. In addition, such opinion may be qualified as an
opinion only on the laws of the State of New York and the laws of the United
States.
(c) The General Counsel for the Company shall have furnished to the
Underwriters an opinion, dated the related Closing Date, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey, with corporate power to own its properties, to conduct
its business as described in the related Final Prospectus and to enter
into and perform its obligations under this Agreement, the related
Terms Agreement, the related Pooling and Servicing Agreement, the
related Supplemental Agreement and the Certificates of the related
Series;
(ii) The Company has full power and authority to sell and service
the related Mortgage Loans as contemplated herein and in the related
Pooling and Servicing Agreement;
(iii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated herein, in the related
Pooling and Servicing Agreement or in the related Supplemental
Agreement, except such as may be required under the blue sky laws of
any jurisdiction and such other approvals as have been obtained;
(iv) Neither the issuance of the Certificates of the related
Series nor delivery of the related Offered Certificates, nor the
consummation of any other of the transactions contemplated in this
Agreement, the related Terms Agreement, the related Pooling and
Servicing Agreement or the related Supplemental Agreement, nor the
fulfillment of the terms of the related Certificates, the related
Pooling and Servicing Agreement, the related Supplemental Agreement,
this Agreement or the related Terms Agreement will conflict with or
violate any term or provision of the articles of incorporation or
by-laws of the Company or any statute, order or regulation applicable
to the Company of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company and will not
conflict with, result in a breach or violation or the acceleration of
or constitute a default under the terms of any indenture or other
agreement or instrument known to such counsel to which the Company is
a party or by which it is bound; and
(v) There are no actions, proceedings or investigations pending
or, to the best knowledge of such counsel, threatened before any
court, administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, the related Terms Agreement, the related
Pooling and Servicing Agreement, the related Supplemental Agreement or
the related Certificates, (ii) seeking to prevent the issuance of the
Certificates of the related Series or the consummation by the Company
of any of the transactions contemplated by this Agreement, such Terms
Agreement, such Pooling and Servicing Agreement or such Supplemental
Agreement, or (iii) which might materially and adversely affect the
performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement, such Terms Agreement, such
Pooling and Servicing Agreement, such Supplemental Agreement or the
related Certificates.
In rendering her opinion such counsel may rely as to matters of fact, to the
extent deemed proper and as stated therein, on certificates of responsible
officers of the Company or public officials. In addition, such opinion may be
qualified as an opinion only on the laws of the State of New Jersey.
(d) If applicable, counsel for GECC shall have furnished to the
Underwriters an opinion, dated the related Closing Date, to the effect
that:
(i) GECC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New York
and in each jurisdiction in which the conduct of its business requires
such qualification;
(ii) GECC has full corporate power and authority to execute and
deliver the Supplemental Agreement and to carry out its terms, and the
execution, delivery and performance of the Supplemental Agreement have
been duly authorized by GECC by all necessary corporate action;
(iii) The related Supplemental Agreement has been duly executed
and delivered by GECC and constitutes a legal, valid and binding
agreement of GECC enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditor's rights in general and by general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law; and
(iv) The execution, delivery and performance of the Supplemental
Agreement by GECC does not and will not conflict with or violate any
term or provision of the articles of incorporation or by-laws of GECC
or any statute, order or regulation applicable to GECC of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over GECC and will not conflict with, result in a breach
or violation or the acceleration of or constitute a default under the
terms of any indenture or other agreement or instrument known to such
counsel to which GECC is a party or by which it is bound.
In rendering such opinion such counsel may rely as to matters of fact, to the
extent deemed proper and as stated therein, on certificates of responsible
officers of GECC or public officials.
(e) The Underwriters shall have received from Xxxxx & Xxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated the related
Closing Date, with respect to the issuance and sale of the Certificates of
the related Series, the related Registration Statement, the related Final
Prospectus and such other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents as the Underwriters may reasonably request for the purpose
of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Underwriters a certificate
of the Company, signed by the President or any Vice President and the
Senior Vice President-Finance or the principal financial or accounting
officer of the Company, dated the related Closing Date, to the effect that
the signers of such certificate have carefully examined the related
Registration Statement (excluding any Current Reports and any other
documents incorporated by reference therein), the related Final Prospectus,
the Detailed Description referred to in such Final Prospectus (excluding
any related Current Report), this Agreement and the related Terms Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the related Closing Date with the same effect as if made on such
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of such
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to their knowledge, threatened; and
(iii) nothing has come to their attention that would lead them to
believe that such Registration Statement (excluding any Current
Report) contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, that the related Final
Prospectus (excluding any related Current Report) contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or that the Detailed Description referred to in such
Final Prospectus includes any untrue statement of a material fact or
omits to state any information which the Final Prospectus states will
be included in such Detailed Description.
(g) If applicable, GECC shall have furnished to the Underwriters a
certificate of GECC, signed by the President or any Vice President and the
Senior Vice President-Finance or the principal financial or accounting
officer of GECC, dated the related Closing Date, to the effect that the
signers of such certificate have carefully examined the information under
the headings "Description of the Certificates--Supplemental Agreement with
GECC" and "General Electric Capital Corporation" contained in the related
Final Prospectus and the related Supplemental Agreement and that:
(i) nothing has come to their attention that would lead them to
believe that such information in the related Final Prospectus contains
any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made,
not misleading; and
(ii) the representations and warranties of GECC in the related
Supplemental Agreement are true and correct in all material respects
on and as of the related Closing Date with the same effect as if made
on such Closing Date, and GECC has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(h) Counsel for the Trustee shall have furnished to the Underwriters
an opinion, dated the related Closing Date, to the effect that:
(i) the Trustee has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of organization with corporate power to own its
properties and conduct its business as presently conducted by it, to
conduct business as a trustee and to enter into and perform its
obligations under the related Pooling and Servicing Agreement and, if
applicable, the related Supplemental Agreement;
(ii) each of the related Pooling and Servicing Agreement and the
related Supplemental Agreement has been duly authorized, executed and
delivered by the Trustee and constitutes the legal, valid and binding
agreement of the Trustee enforceable against the Trustee in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and to judicial discretion,
and general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(iii) the Trustee has duly accepted its appointment as trustee
under the related Pooling and Servicing Agreement;
(iv) no consent, approval, authorization or order of any state or
federal court or government agency or body is required on the part of
the Trustee for the consummation of the transactions contemplated in
the related Pooling and Servicing Agreement and the related
Supplemental Agreement, except such as may be required under any
federal or state securities law; and
(v) the performance on the part of the Trustee of any of the
transactions contemplated in the related Pooling and Servicing
Agreement and the related Supplemental Agreement does not conflict
with or result in a breach or violation of any term or provision of,
or constitute a default under, the Articles of Organization, as
amended, or By-Laws of the Trustee, or any state or federal statute or
regulation applicable to the Trustee, or to such counsel's knowledge,
any indenture or other agreement or instrument to which the Trustee is
a party or by which it is bound, or, to such counsel's knowledge, any
order of any state or federal court, regulatory body, administrative
agency or governmental body having jurisdiction over the Trustee.
In addition, such counsel shall furnish to the Underwriters such opinions as to
the treatment of the Trust Fund for purposes of state tax law where the Trustee
maintains possession of the assets of the Trust Fund as are reasonably
satisfactory to the Underwriters.
(i) If any Preliminary Prospectus has been prepared with respect to a
Series of Certificates, KPMG Peat Marwick LLP shall have furnished to the
Underwriters a letter, dated as of the date of such Preliminary Prospectus,
in form and substance satisfactory to the Underwriters, stating in effect
that:
(i) they have performed certain specified procedures as a result
of which they have determined that such information as the
Underwriters may reasonably request of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of
the Company) set forth in the related Preliminary Prospectus under the
caption "Delinquency and Foreclosure Experience of the Company" agrees
with the accounting records of the Company, excluding any questions of
legal interpretation; and
(ii) they have performed certain specified procedures as a result
of which they have determined that such information as the
Underwriters may reasonably request of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of
the Company and which is obtained from an analysis of a sample of the
Mortgage Loans included in the related pool) set forth in the related
Preliminary Prospectus under the caption "Description of the Mortgage
Pool and the Mortgaged Properties" or "Description of the Mortgage
Pools and the Mortgaged Properties", as the case may be, is mutually
consistent and agrees with the accounting records of the Company and,
where applicable, the related Mortgage Loan files of the Company,
excluding any questions of legal interpretation.
(j) KPMG Peat Marwick LLP shall have furnished to the Underwriters a
letter, dated as of the date of the related Terms Agreement, in form and
substance satisfactory to the Underwriters, stating in effect that they
have performed certain specified procedures as a result of which they have
determined that such information as the Underwriters may reasonably request
of an accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company) set forth in the related Final
Prospectus under the caption "Delinquency and Foreclosure Experience of the
Company" agrees with the accounting records of the Company, excluding any
questions of legal interpretation.
(k) KPMG Peat Marwick LLP shall have furnished to the Underwriters a
letter, dated as of the related Closing Date, in form and substance
satisfactory to the Underwriters, stating in effect that they have
performed certain specified procedures as a result of which they have
determined that such information as the Underwriters may reasonably request
of an accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and which is obtained from an analysis of
a sample of the Mortgage Loans included in the related pool) set forth in
the related Final Prospectus under the caption "Description of the Mortgage
Pool and the Mortgaged Properties" or "Description of the Mortgage Pools
and the Mortgaged Properties", as the case may be, and in the Detailed
Description relating to such Final Prospectus is mutually consistent and
agrees with the accounting records of the Company and, where applicable,
the related Mortgage Loan files of the Company, excluding any questions of
legal interpretation. In addition, if applicable, such accountants shall
have furnished to the Underwriters a letter, dated as of the related
Closing Date, which shall include a statement or statements to the effect
that based upon the assumptions and methodology agreed to by the Company
(and which is consistent with the manner in which any final PAC Balances,
TAC Balances, Scheduled Balances, Maximum and Minimum Scheduled Balances or
any other scheduled balances are to be calculated as set forth in the
related Final Prospectus), all of which shall be described by reference in
such letter, such accountants shall have verified the mathematical accuracy
of any final PAC Balances Table, TAC Balances Table, Scheduled Balances
Table, Maximum or Minimum Scheduled Balances Table or other scheduled
balances table attached as an exhibit to the related Pooling and Servicing
Agreement.
(l) KPMG Peat Marwick LLP shall have furnished to the Underwriters and
the Company a letter or letters, dated as of the date of the related Terms
Agreement, in form and substance satisfactory to the Underwriters and the
Company, including, without limitation, statements, if applicable, to the
effect that:
(i) based upon the assumptions and methodology set forth in the
related Final Prospectus, all of which shall be described by reference
in such letter, they recomputed the percentages of initial principal
balance outstanding as of each of the Distribution Dates (as defined
in such Final Prospectus) indicated and the weighted average lives of
each Class of Offered Certificates at each of the indicated
percentages of the applicable Prepayment Assumption, and they compared
the recomputed percentages and weighted average lives to the
corresponding percentages and weighted average lives set forth in the
related tables and found them to be in agreement;
(ii) based upon the assumptions and methodology set forth in such
Final Prospectus, all of which shall be described by reference in such
letter, they have verified the mathematical accuracy of any Scheduled
Final Distribution Dates for the Offered Certificates, PAC Balances,
TAC Balances, Scheduled Balances, Maximum and Minimum Scheduled
Balances or any other scheduled balances set forth in such Final
Prospectus for each indicated Distribution Date, and have verified the
mathematical accuracy of any initial Effective Ranges of any PAC
Certificates, Scheduled Certificates or other scheduled Certificates
set forth in such Final Prospectus; and
(iii) based upon the assumptions and methodology set forth in
such Final Prospectus, all of which shall be described by reference in
such letter, they have verified the mathematical accuracy of the
pre-tax yields to maturity and, if applicable, aggregate cash flows of
any Class of Certificates for which such pre-tax yields and, if
applicable, aggregate cash flows are set forth in such Final
Prospectus at the indicated percentages of the Prepayment Assumption
and, if applicable, at the indicated values of COFI, LIBOR or any
other index, as applicable.
(m) The Offered Certificates of the related Series shall have received
the ratings specified in the related Terms Agreement (the "Required
Ratings").
(n) Prior to the related Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
(o) If any Certificates of the related Series are to be sold to any
other underwriter and/or offered in reliance upon an exemption from the
registration requirements of the Act, the sale at or prior to the related
Closing Date of such Certificates to the purchaser thereof shall have
occurred.
(p) Subsequent to the date of the related Terms Agreement, there shall
not have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Company or GECC
which the Underwriters conclude in their judgment, after consultation with
the Company, materially impairs the investment quality of the Offered
Certificates of the related Series so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of such
Offered Certificates as contemplated by the related Final Prospectus.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects with respect to the particular Offered
Certificates of a Series when and as provided in this Agreement and the related
Terms Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement and the related Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Underwriters and their counsel, this Agreement (with respect to the related
Offered Certificates) and the related Terms Agreement and all obligations of the
Underwriters hereunder (with respect to the related Offered Certificates) and
thereunder may be canceled at, or at any time prior to, the related Closing Date
by the Underwriters. Notice of such cancellation shall be given to the Company
in writing, or by telephone or telegraph confirmed in writing.
7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person who controls any Underwriter
within the meaning of the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act, or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement relating to the Offered
Certificates of the applicable Series as it became effective or in any amendment
or supplement thereof, or in such Registration Statement, in the related
Preliminary Prospectus or the related Final Prospectus, or in any amendment
thereof, or in the Detailed Description referred to in such Final Prospectus or
arise out of or are based upon the omission or alleged omission (in the case of
any Computational Materials or ABS Term Sheets (in each case as defined herein)
in respect of which the Company agrees to indemnify each Underwriter, as set
forth below, when such are read in conjunction with the related Final Prospectus
and Prospectus Supplement) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein (A) in reliance upon and in conformity with written information
furnished to the Company as herein stated by or on behalf of any Underwriter
through you specifically for use in connection with the preparation thereof or
(B) in any Current Report or any amendment or supplement thereof, except to the
extent that any untrue statement or alleged untrue statement therein or omission
therefrom results (or is alleged to have resulted) directly from an error (a
"Mortgage Pool Error") in the information concerning the characteristics of the
Mortgage Loans furnished by the Company to any Underwriter in writing or by
electronic transmission that was used in the preparation of either (x) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) included in such Current Report (or amendment or supplement thereof) or
(y) any written or electronic materials furnished to prospective investors on
which the Computational Materials (or amendments or supplements) were based,
(ii) such indemnity with respect to any Preliminary Prospectus or any Corrected
Statement (as defined below) in any Final Prospectus (or supplement thereto)
shall not inure to the benefit of any Underwriter (or any person controlling any
Underwriter) from whom the person asserting any loss, claim, damage or liability
purchased the Certificates of the related Series that are the subject thereof if
such person did not receive a copy of the related Final Prospectus or a
supplement to such Final Prospectus, as the case may be, at or prior to the
confirmation of the sale of such Certificates and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus or Final
Prospectus (or supplement thereto) was corrected (a "Corrected Statement") in
such Final Prospectus (with respect to any Preliminary Prospectus) or in such
other supplement (with respect to any Final Prospectus) and such Final
Prospectus or such supplement was furnished by the Company to such Underwriter
prior to the delivery of such confirmation, and (iii) such indemnity with
respect to any Mortgage Pool Error shall not inure to the benefit of any
Underwriter (or any person controlling any Underwriter) from whom the person
asserting any loss, claim, damage or liability received any Computational
Materials or ABS Term Sheets (or any written or electronic materials on which
the Computational Materials or ABS Term Sheets are based) that were prepared on
the basis of such Mortgage Pool Error, if, prior to the time of confirmation of
the sale of the applicable Certificates to such person, the Company notified
such Underwriter in writing of the Mortgage Pool Error or provided in written or
electronic form information superseding or correcting such Mortgage Pool Error
(in any such case, a "Corrected Mortgage Pool Error"), and such Underwriter
failed to notify such person thereof or to deliver to such person corrected
Computational Materials (or underlying written or electronic materials) or ABS
Term Sheets. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement relating to the Offered Certificates
of the applicable Series, and each person who controls the Company within
the meaning of the Act or the Exchange Act to the same extent as the
foregoing indemnities from the Company to each Underwriter, but only with
reference to (A) written information furnished to the Company by or on
behalf of such Underwriter through you specifically for use in the
preparation of the documents referred to in the foregoing indemnity with
respect to the related Series, or (B) any Computational Materials or ABS
Term Sheets (or amendments or supplements thereof) delivered to prospective
investors by such Underwriter and furnished to the Company by such
Underwriter pursuant to Section 8 and incorporated by reference in such
Registration Statement, the related Preliminary Prospectus or the related
Final Prospectus or any amendment or supplement thereof (except that no
such indemnity shall be available for any losses, claims, damages or
liabilities, or actions in respect thereof, resulting from any Mortgage
Pool Error, other than a Corrected Mortgage Pool Error). This indemnity
agreement will be in addition to any liability which each Underwriter may
otherwise have. The Company acknowledges that the Underwriter-Provided
Information constitute the only information furnished in writing by or on
behalf of the Underwriters for inclusion in the related Preliminary
Prospectus or Final Prospectus (other than any Computational Materials or
ABS Term Sheets (or amendments or supplements thereof)), and the
Underwriters confirm that such statements are correct.
"Underwriter-Provided Information" means any statements provided to the
Company by the Underwriters specifically for use in the preparation of the
related Preliminary Prospectus or Final Prospectus and designated as such
in the Terms Agreement for the related Series. Any Computational Materials
or ABS Term Sheets (or amendments or supplements thereof) furnished to the
Company by a particular Underwriter shall relate exclusively to and be the
several responsibility of such Underwriter and no other Underwriter.
(c) Promptly after receipt by an indemnified party under Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
this Section 7, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify such indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party or parties of the commencement thereof, the indemnifying party or
parties will be entitled to participate therein, and to the extent that
they may elect by written notice delivered to an indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both
an indemnified party and an indemnifying party and such indemnified party
shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to an indemnifying party, such indemnified
party or parties shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from an indemnifying party or parties to such indemnified party of
their election so to assume the defense of such action and approval by such
indemnified party of counsel, such indemnifying party or parties will not
be liable to such indemnified party under this Section 7 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) such indemnified party shall
have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party or parties shall not
be liable for the expenses of more than one separate counsel approved by
the indemnified party or parties in the case of subparagraph (a) or (b),
representing the indemnified parties under subparagraph (a) or (b), who are
parties to such action), (ii) the indemnifying party or parties shall not
have employed counsel satisfactory to the indemnified party or parties to
represent such indemnified party or parties within a reasonable time after
notice of commencement of the action or (iii) the indemnifying party or
parties have authorized the employment of counsel for an indemnified party
at the expense of the indemnifying parties; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the
counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is due in accordance with its terms but is for any reason
held by a court to be unavailable from the Company or any Underwriter, on
grounds of policy or otherwise, or if an indemnified party failed to give
notice under paragraph (c) of this Section 7 in respect of a claim
otherwise subject to indemnification in accordance with paragraph (a) or
(b) of this Section 7, the Company and such Underwriter shall contribute to
the aggregate losses, claims, damages and liabilities (including legal and
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and such Underwriter may be subject,
as follows:
(i) in the case of any losses, claims, damages and liabilities
(or actions in respect thereof) which do not arise out of or are not
based upon any untrue statement or omission of a material fact in any
Computational Materials or ABS Term Sheets (or any amendments or
supplements thereof), in such proportion so that the Underwriters are
responsible for that portion represented by the difference between the
proceeds to the Company in respect of the Offered Certificates
appearing on the cover page of the Final Prospectus for the related
Series and the total proceeds received by the Underwriters from the
sale of such Offered Certificates (the "Underwriting Discount"), and
the Company is responsible for the balance; provided, however, that in
no case shall the Underwriters be responsible under this subparagraph
(i) for any amount in excess of such Underwriting Discount applicable
to the Offered Certificates purchased by the Underwriters pursuant to
this Agreement and the related Terms Agreement; and
(ii) in the case of any losses, claims, damages and liabilities
(or actions in respect thereof) which arise out of or are based upon
any untrue statement or omission of a material fact in any
Computational Materials or ABS Term Sheets (or any amendments or
supplements thereof) or in any written or electronic materials
distributed to prospective investors on which the Computational
Materials are based, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Underwriter
that delivered such materials to prospective investors on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact in such
Computational Materials or ABS Term Sheets (or any amendments or
supplements thereof or such written or electronic materials) results
from information prepared by the Company on the one hand or such
Underwriter on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
Notwithstanding anything to the contrary in this Section 7(d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls any Underwriter within the meaning of either the Act or the Exchange
Act shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the immediately preceding
sentence of this paragraph (d).
8. Computational Materials and Structural Term Sheets. (a) Not later than
10:30 a.m., New York time, on the business day before the date on which the
Current Report relating to the Offered Certificates of a Series is required to
be filed by the Company with the Commission pursuant to Section 5(b) hereof, the
Underwriters shall deliver to the Company five complete copies of all materials
provided by the Underwriters to prospective investors in such Offered
Certificates which constitute (i) "Computational Materials" within the meaning
of the no-action letter dated May 20, 1994 issued by the Division of Corporation
Finance of the Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx,
Peabody & Co. Incorporated, and Xxxxxx Structured Asset Corporation and the
no-action letter dated May 27, 1994 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (together, the
"Xxxxxx Letters") and the filing of such material is a condition of the relief
granted in such letter (such materials being the "Computational Materials"), and
(ii) "Structural Term Sheets" within the meaning of the no-action letter dated
February 17, 1995 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (the "PSA Letter") and the
filing of such material is a condition of the relief granted in such letter
(such materials being the "Structural Term Sheets"). Each delivery of
Computational Materials and Structural Term Sheets to the Company pursuant to
this paragraph (a) shall be effected by delivering four copies of such materials
to counsel for the Company on behalf of the Company at the address specified in
Section 3 hereof and one copy of such materials to the Company.
(b) Each Underwriter represents and warrants to and agrees with the
Company, as of the date of the related Terms Agreement and as of the
Closing Date, that:
(i) the Computational Materials furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute (either in original,
aggregated or consolidated form) all of the materials furnished to
prospective investors by such Underwriter prior to the time of
delivery thereof to the Company that are required to be filed with the
Commission with respect to the related Offered Certificates in
accordance with the Xxxxxx Letters, and such Computational Materials
comply with the requirements of the Xxxxxx Letters;
(ii) the Structural Term Sheets furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to the
time of delivery thereof to the Company that are required to be filed
with the Commission as "Structural Term Sheets" with respect to the
related Offered Certificates in accordance with the PSA Letter, and
such Structural Term Sheets comply with the requirements of the PSA
Letter;
(iii) on the date any such Computational Materials or Structural
Term Sheets with respect to such Offered Certificates (or any written
or electronic materials furnished to prospective investors on which
the Computational Materials are based) were last furnished to each
prospective investor by such Underwriter and on the date of delivery
thereof to the Company pursuant to Section 8(a) and on the related
Closing Date, such Computational Materials (or such other materials)
or Structural Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and
(iv) all Computational Materials (or underlying materials
distributed to prospective investors on which the Computational
Materials were based) delivered to prospective investors by such
Underwriter and all Structural Term Sheets delivered to prospective
investors by such Underwriter contained and will contain a legend,
prominently displayed on the first page thereof, stating that the
Computational Materials or Structural Term Sheets are being produced
and provided exclusively by the Underwriter and that the Underwriter
is acting as an underwriter and not acting as an agent of the Company
in connection with the securities described herein, and otherwise in
form and substance satisfactory to the Company.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Computational Materials or Structural Term Sheets (or
any written or electronic materials on which the Computational Materials are
based) included or will include any untrue statement resulting directly from any
Mortgage Pool Error (except any Corrected Mortgage Pool Error, with respect to
materials prepared after the receipt by such Underwriter from the Company of
notice of such Corrected Mortgage Pool Error or materials superseding or
correcting such Corrected Mortgage Pool Error).
(c) The Underwriters shall cause a firm of public accountants to
furnish to the Company a letter, dated as of the date on which the
Underwriters deliver any Computational Materials (which term shall be
deemed to include, for purposes of this paragraph (c), calculated
statistical information delivered to prospective investors in the form of a
Structural Term Sheet) to the Company pursuant to Section 8(a), in form and
substance satisfactory to the Company, stating in effect that they have
verified the mathematical accuracy of any calculations performed by each
Underwriter and set forth in such Computational Materials.
(d) Each Underwriter acknowledges and agrees that any Computational
Materials or Structural Term Sheets with respect to any Series of
Certificates furnished to prospective investors from and after September
10, 1996 have been prepared and disseminated by the Underwriters and not by
or on behalf of the Company, and that such materials included and shall
include a disclaimer in the form described in paragraph (b)(iv) above. Each
Underwriter agrees that it will not represent to prospective investors that
any Computational Materials or Structural Term Sheets were prepared or
disseminated on behalf of the Company.
(e) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, it
shall be necessary to amend or supplement the related Final Prospectus as a
result of an untrue statement of a material fact contained in any
Computational Materials or Structural Term Sheets provided by any
Underwriter pursuant to this Section 8 or the omission to state therein a
material fact required, when considered in conjunction with the related
Final Prospectus and Prospectus Supplement, to be stated therein or
necessary to make the statements therein, when read in conjunction with the
related Final Prospectus and Prospectus Supplement, not misleading, or if
it shall be necessary to amend or supplement any Current Report relating to
any Computational Materials or Structural Term Sheets to comply with the
Act or the rules thereunder, such Underwriter promptly will prepare and
furnish to the Company for filing with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Each Underwriter represents and warrants
to the Company, as of the date of delivery by it of such amendment or
supplement to the Company, that such amendment or supplement will not
include any untrue statement of a material fact or, when read in
conjunction with the related Final Prospectus and Prospectus Supplement,
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, each such
Underwriter makes no representation or warranty as to whether any such
amendment or supplement will include any untrue statement resulting
directly from any Mortgage Pool Error (except any Corrected Mortgage Pool
Error, with respect to any such amendment or supplement prepared after the
receipt by such Underwriter from the Company of notice of such Corrected
Mortgage Pool Error or materials superseding or correcting such Corrected
Mortgage Pool Error). The Company shall have no obligation to file such
amendment or supplement if (i) the Company determines that such amendment
or supplement contains any untrue statement of a material fact or, when
read in conjunction with the related Final Prospectus and Prospectus
Supplement, omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being
understood, however, that the Company shall have no obligation to review or
pass upon the accuracy or adequacy of, or to correct, any such amendment or
supplement provided by any Underwriter to the Company pursuant to this
paragraph (e) or (ii) the Company reasonably determined that such filing is
not required under the Act and the Underwriters do not object as provided
below. The Company shall give notice to the Underwriters of its
determination not to file an amendment or supplement pursuant to clause
(ii) of the preceding sentence and agrees to file such amendment or
supplement if the Underwriters reasonably object to such determination
within one business day after receipt of such notice.
9. Collateral Term Sheets. (a) Prior to the delivery of any "Collateral
Term Sheet" within the meaning of the PSA Letter, the filing of which material
is a condition of the relief granted in such letter (such material being the
"Collateral Term Sheets"), to a prospective investor in the Offered
Certificates, the Underwriters shall notify the Company and its counsel by
telephone of their intention to deliver such materials and the approximate date
on which the first such delivery of such materials is expected to occur. Not
later than 10:30 a.m., New York time, on the business day immediately following
the date on which any Collateral Term Sheet was first delivered to a prospective
investor in the Offered Certificates, the Underwriters shall deliver to the
Company five complete copies of all materials provided by the Underwriters to
prospective investors in such Offered Certificates which constitute "Collateral
Term Sheets." Each delivery of a Collateral Term Sheet to the Company pursuant
to this paragraph (a) shall be effected by delivering four copies of such
materials to counsel for the Company on behalf of the Company at the address
specified in Section 3 hereof and one copy of such materials to the Company.
(Collateral Term Sheets and Structural Term Sheets are, together, referred to
herein as "ABS Term Sheets.") At the time of each such delivery, the Underwriter
making such delivery shall indicate in writing that the materials being
delivered constitute Collateral Term Sheets, and, if there has been any prior
such delivery with respect to the related Series, shall indicate whether such
materials differ in any material respect from any Collateral Term Sheets
previously delivered to the Company with respect to such Series pursuant to this
Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Mortgage Loans.
(b) Each Underwriter represents and warrants to and agrees with the
Company as of the date of the related Terms Agreement and as of the Closing
Date, that:
(i) The Collateral Term Sheets furnished to the Company by such
Underwriter pursuant to Section 9(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to time
of delivery thereof to the Company that are required to be filed with
the Commission as "Collateral Term Sheets" with respect to the related
Offered Certificates in accordance with the PSA Letter, and such
Collateral Term Sheets comply with the requirements of the PSA Letter;
(ii) On the date any such Collateral Term Sheets with respect to
such Offered Certificates were last furnished to each prospective
investor by such Underwriter and on the date of delivery thereof to
the Company pursuant to Section 9(a) and on the related Closing Date,
such Collateral Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and
(iii) such Underwriter has not represented to any prospective
investor that any Collateral Term Sheets with respect to any Series
were prepared or disseminated on behalf of the Company, and, except as
otherwise disclosed by such Underwriter to the Company in writing
prior to the date hereof, all Collateral Term Sheets previously
furnished to prospective investors included a disclaimer to the effect
set forth in Section 9(c).
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Collateral Term Sheet included or will include any
untrue statement or material omission resulting directly from any Mortgage Pool
Error (except any Corrected Mortgage Pool Error, with respect to materials
prepared after the receipt by such Underwriter from the Company of notice of
such Corrected Mortgage Pool Error or materials superseding or correcting such
Corrected Mortgage Pool Error).
(c) Each Underwriter acknowledges and agrees that any Collateral Term
Sheets with respect to any Series of Certificates furnished to prospective
investors from and after the date hereof shall include a disclaimer in form
satisfactory to the Company to the effect set forth in Section 8(d) hereof,
and to the effect that the information contained in such materials
supersedes information contained in any prior Collateral Term Sheet with
respect to such Series of Offered Certificates and will be superseded by
the description of the related Mortgage Loans in the related Prospectus
Supplement and in the Detailed Description relating to such Prospectus
Supplement to be filed under cover of Form 8-K. Each Underwriter agrees
that it will not represent to prospective investors that any Collateral
Term Sheets were prepared or disseminated on behalf of the Company.
(d) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, it
shall be necessary to amend or supplement the related Final Prospectus as a
result of an untrue statement of a material fact contained in any
Collateral Term Sheets provided by any Underwriter pursuant to this Section
9 or the omission to state therein a material fact required, when
considered in conjunction with the related Final Prospectus and Prospectus
Supplement, to be stated therein or necessary to make the statements
therein, when read in conjunction with the related Final Prospectus and
Prospectus Supplement, not misleading, or if it shall be necessary to amend
or supplement any Current Report relating to any Collateral Term Sheets to
comply with the Act or the rules thereunder, such Underwriter promptly will
prepare and furnish to the Company for filing with the Commission an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Each Underwriter represents
and warrants to the Company, as of the date of delivery of such amendment
or supplement to the Company, that such amendment or supplement will not
include any untrue statement of a material fact or, when read in
conjunction with the related Final Prospectus and Prospectus Supplement,
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, each such
Underwriter makes no representation or warranty as to whether any such
amendment or supplement will include any untrue statement resulting
directly from any Mortgage Pool Error (except any Corrected Mortgage Pool
Error, with respect to any such amendment or supplement prepared after the
receipt by such Underwriter from the Company of notice of such Corrected
Mortgage Pool Error or materials superseding or correcting such Corrected
Mortgage Pool Error). The Company shall have no obligation to file such
amendment or supplement if the Company determines that (i) such amendment
or supplement contains any untrue statement of a material fact or, when
read in conjunction with the related Final Prospectus and Prospectus
Supplement, omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being
understood, however, that the Company shall have no obligation to review or
pass upon the accuracy or adequacy of, or to correct, any such amendment or
supplement provided by any Underwriter to the Company pursuant to this
paragraph (d) or (ii) such filing is not required under the Act.
10. Termination. This Agreement (with respect to a particular Certificate
Offering) and the related Terms Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
delivery of and payment for the related Offered Certificates, if prior to the
related Closing Date (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either federal or New York State authorities, or (iii) there shall have
occurred any outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States is such
as to make it, in the reasonable judgment of the Underwriters, impracticable to
market such Offered Certificates.
11. Representations and Indemnities to Survive Delivery. The agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement and the related Terms Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or the
Company or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the related
Offered Certificates. The provisions of Section 7 hereof shall survive the
termination or cancellation of this Agreement and the related Terms Agreement.
12. Default by One or More of the Underwriters. If any of the Underwriters
shall fail on the Closing Date to purchase the Offered Certificates which it is
obligated to purchase hereunder and under the applicable Terms Agreement (the
"Defaulted Certificates"), you shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Certificates in such amounts as may be agreed upon and upon the terms herein set
forth and under the applicable Terms Agreement. If, however, you have not
completed such arrangements within such 24-hour period, then:
(a) if the aggregate original Certificate Principal Balance of
Defaulted Certificates does not exceed 10% of the aggregate original
Certificate Principal Balance of the Offered Certificates to be purchased
pursuant to such Terms Agreement, the non-defaulting Underwriters named in
such Terms Agreement shall be obligated to purchase the full amount thereof
in the proportions that their respective underwriting obligations
thereunder bear to the underwriting obligations of all non-defaulting
Underwriters; and
(b) if the aggregate original Certificate Principal Balance of
Defaulted Certificates exceeds 10% of the aggregate original Certificate
Principal Balance of the Offered Certificates to be purchased pursuant to
such Terms Agreement, the applicable Terms Agreement shall terminate
without any liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 12 and nothing in this Agreement
shall relieve any defaulting Underwriter from liability in respect of its
default.
In the event of any such default which does not result in a termination of
this Agreement or such applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Date for a period of time not
exceeding seven days in order to effect any required changes in the Registration
Statement or in any other documents or arrangements.
13. Successors. This Agreement and the related Terms Agreement will inure
to the benefit of and be binding upon the parties hereto and thereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 7 hereof, and their successors and assigns, and no other
person will have any right or obligation hereunder or thereunder. No purchaser
of any Offered Certificate from the Underwriters shall be deemed a successor or
assign by reason of such purchase.
14. APPLICABLE LAW. THIS AGREEMENT AND THE RELATED TERMS AGREEMENT WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
15. Miscellaneous. This Agreement, as supplemented by the related Terms
Agreement, supersedes all prior and contemporaneous agreements and
understandings relating to the subject matter hereof. This Agreement and the
related Terms Agreement or any term of each may not be changed, waived,
discharged or terminated except by an affirmative written agreement made by the
party against whom enforcement of the change, waiver, discharge or termination
is sought. The headings in this Agreement and the related Terms Agreement are
for purposes of reference only and shall not limit or otherwise affect the
meaning hereof or thereof.
16. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Underwriters, will be delivered to the
Underwriters at the address first above written; or if sent to the Company, will
be delivered to GE Capital Mortgage Services, Inc., Three Executive Campus,
Cherry Hill, New Jersey 08002, Attention: General Counsel.
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
Company and the Underwriters.
Very truly yours,
GE CAPITAL MORTGAGE SERVICES, INC.
By: _____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
PRUDENTIAL SECURITIES INCORPORATED
as Representative of the Underwriters
named in the applicable Terms Agreement
By: ____________________________________
Name:
Title:
EXHIBIT A
GE CAPITAL MORTGAGE SERVICES, INC.
REMIC MULTI-CLASS PASS-THROUGH CERTIFICATES
SERIES ____-__
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 [Date]
Xxxxxx Xxxx, XX 00000
Each of Prudential Securities Incorporated [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 such Classes of Series ____-__
Certificates specified opposite its name in Section 2(a) hereof (the "Offered
Certificates"). This letter supplements and modifies the Underwriting Agreement
solely as it relates to the purchase and sale of the Offered Certificates
described below. The Series ____-__ Certificates are registered with the
Securities and Exchange Commission by means of an effective Registration
Statement (No. 33-___). Capitalized terms used and not defined herein have the
meanings given them in the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series ____-__ 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 Prospectus Supplement dated the date hereof.
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 the variance referred to in Section 1(a)[and,
as to any particular Class, to an upward or downward variance of up to [
]%]:
Principal Interest Class Purchase
Underwriter Class Balance Rate Price Percentage
(b) The Offered Certificates shall have such other characteristics as
described in the related 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 Certificates Principal Balance
thereof plus accrued interest at the rate of [ ]% per annum from and including
the Cut-off Date up to, but not including, _________ __, ____ (the "Closing
Date").
Section 4. Required Ratings: The Offered Certificates shall have received
Required Ratings of at least [ ] from [ ].
Section 5. Tax Treatment: [One or more elections will be made to treat the
assets of the Trust Fund as a REMIC.] [The Trust Fund will be treated as a
"grantor trust" for federal income tax purposes.]
[Section 6. Additional Expenses:]*
--------
* to be inserted if applicable.
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:
[name of Underwriter]
By: _____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
GE CAPITAL MORTGAGE SERVICES, INC.
By: _____________________________
Name:
Title:
GE CAPITAL MORTGAGE SERVICES, INC.
REMIC MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-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 23, 0000
Xxxxxx Xxxx, XX 00000
Each of Prudential Securities Incorporated ("Prudential") and Xxxxxx
Brothers Inc. ("Xxxxxx," 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 such Classes of Series 1999-HE2 Certificates specified
opposite its name in Section 2(a) hereof (the "Offered Certificates"). This
letter supplements and modifies the Underwriting Agreement solely as it relates
to the purchase and sale of the Offered Certificates described below. The Series
1999-HE2 Certificates are registered with the Securities and Exchange Commission
by means of an effective Registration Statement (Nos. 333-68951 and
333-68951-01). Capitalized terms used and not defined herein have the meanings
given them in the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series 1999-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:
Class
Principal Interest Purchase Price
Underwriter Class Balance Rate Percentage
----------- ----- --------- -------- --------------
Prudential Class A1 $38,500,000 6.380% 99.775000%
Xxxxxx Class A1 38,500,000 6.380 99.775000
Prudential Class A2 15,500,000 6.655 99.775000
Xxxxxx Class A2 15,500,000 6.655 99.775000
Prudential Class A3 26,500,000 6.820 99.775000
Xxxxxx Class A3 26,500,000 6.820 99.775000
Prudential Class A4 16,000,000 7.270 99.775000
Xxxxxx Class A4 16,000,000 7.270 99.775000
Prudential Class A5 6,924,000 (1) 99.775000
Xxxxxx Class A5 6,923,000 (1) 99.775000
Prudential Class A6 11,500,000 7.295 99.775000
Xxxxxx Class A6 11,500,000 7.295 99.775000
Prudential Class M 7,481,000 (1) 99.775000
Xxxxxx Class M 7,481,000 (1) 99.775000
Prudential Class B1 3,401,000 (1) 99.775000
Xxxxxx Class B1 3,400,000 (1) 99.775000
Prudential Class B2 2,721,000 (3) 98.790625
Xxxxxx Class B2 2,720,000 (3) 98.790625
Prudential Class R1 500 0.000 0.000000(2)
Prudential Class R2 500 0.000 0.000000(2)
-------------------
(1) Interest will accrue on the Class A5, Class M and Class B1 Certificates
during the initial Interest Accrual Period at Certificate Interest
Rates of 7.510%, 7.560% and 7.905% per annum, respectively, and during
each subsequent Interest Accrual Period at Certificate Interest Rates
equal to the lesser of (i) 7.510%, 7.560% and 7.905% 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.
(3) Interest will accrue on the Class B2 Certificates during the initial
Interest Accrual Period at a Certificate Interest Rate of 9.165% per
annum and during each subsequent Interest Accrual Period at Certificate
Interest Rates equal to the Weighted Average Net Mortgage Rate of the
Mortgage Loans as of the first day of the related Interest Accrual
Period.
(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, 1999, up to, but not including, June 25,
1999 (the "Closing Date").
Section 4. Required Ratings: The Class A1, Class A2, Class A3, Class A4,
Class A5, Class A6, Class R1 and Class R2 Certificates shall have received
Required Ratings of at least "Aaa" from Xxxxx'x Investors Service, Inc.
("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 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 Underwriters for inclusion in such
Final Prospectus (other than any Computational Materials or ABS Terms Sheets (or
amendments or supplements thereof)), and the Underwriters confirm that such
statements are correct.
* * * * *
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 BROTHERS INC.
By: _____________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
GE CAPITAL MORTGAGE SERVICES, INC.
By: _____________________________
Name:
Title:
