SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 10, 1995
(Date of earliest event reported)
Commission File No. 33-72966
The Prudential Home Mortgage Securities Company, Inc.
Delaware 43-1490160
(State of Incorporation) (I.R.S. Employer Identification No.)
5325 Spectrum Drive, Frederick , Maryland 21701
Address of principal executive offices (Zip Code)
(301) 846-8199
Registrant's Telephone Number, including area code
(Former name, former address and former fiscal year, if changed since last
report)
INDEX TO EXHIBITS
Exhibit No. Description
EX-1 Amendment No. 1 to the Pooling and Servicing Agreement dated as
of
November 10, 1995 among The Prudential Home Mortgage Securities
Company, Inc., The Prudential Home Mortgage Company, Inc., and
First Trust National Association, as trustee.
<PAGE>
ITEM 5. Other Events
On November 10, 1995, The Prudential Home Mortgage Securities Company, Inc., a
Delaware corporation (the "Registrant"), sold Mortgage Pass-Through
Certificates, Series 1994-8, Class A-18 (the "Offered Certificates"). The
Offered Certificates, together with the other Subclasses of Class A
Certificates (designated as the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-16, Class
A-17, Class A-R and Class A-LR), the Class M Certificates and the Class B
Certificates were originally issued on February 16, 1994 pursuant to a Pooling
and Servicing Agreement, dated as of February 16, 1994 (the "Pooling and
Servicing Agreement"), among the Registrant, The Prudential Home Mortgage
Company, Inc., as servicer (the "Servicer" or "PHMC"), and First Trust National
Association, as trustee (the "Trustee"). The Pooling and Servicing Agreement
was amended by Amendment No. 1 dated as of November 10, 1995 (the "Amendment"),
a copy of which Amendment is filed as an exhibit hereto. The primary purpose
of the Amendment was to remove certain transfer restrictions on the Offered
Certificates and to change the minimum denominations in which such Offered
Certificates could be issued.
Interest on the Offered Certificates is distributed on each Distribution Date
(as defined in the Pooling and Servicing Agreement). Distributions of interest
on any Distribution Date are made to the extent that the Pool Distribution
Amount (as defined in the Pooling and Servicing Agreement) is sufficient
therefor.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
Item 601(a)
of Regulation S-K
Exhibit No. Description
(EX-1) Amendment No. 1 to the Pooling and Servicing Agreement
dated as of November 10, 1995, among The Prudential Home
Mortgage Securities Company, Inc., The Prudential Home
Mortgage Company, Inc., and First Trust National
Association, as trustee.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PRUDENTIAL HOME MORTGAGE
SECURITIES COMPANY, INC.
November 10, 1995
By: /s/ M. Kathryn Gray
Name: M. Kathryn Gray
Title: Vice President
THE PRUDENTIAL HOME MORTGAGE SECURITIES COMPANY, INC.
(Seller)
and
THE PRUDENTIAL HOME MORTGAGE COMPANY, INC.
(Servicer)
and
FIRST TRUST NATIONAL ASSOCIATION
(Trustee)
___________________________
AMENDMENT NO. 1
Dated as of November 10, 1995
TO
POOLING AND SERVICING AGREEMENT
DATED AS OF February 16, 1994
___________________________
$450,857,728.46
Mortgage Pass-Through Certificates
Series 1994-8
<PAGE>
AMENDMENT NO. 1, dated as of November 10, 1995, ("Amendment"), to the Pooling
and Servicing Agreement dated as of February 16, 1994 (the "Agreement") among
THE PRUDENTIAL HOME MORTGAGE SECURITIES COMPANY, INC., as seller (the
"Seller"), THE PRUDENTIAL HOME MORTGAGE COMPANY, INC., as servicer (the
"Servicer"), and FIRST TRUST NATIONAL ASSOCIATION, as trustee (the "Trustee").
WHEREAS, Section 10.01 of the Agreement provides, among other things, that the
Seller, the Servicer and the Trustee may amend the Agreement, subject to
certain provisos, with the consent of the Holders of Certificates evidencing
Percentage Interests aggregating not less than 66-2/3% of each Class or
Subclass of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or modifying in any manner the rights of the Holders of
Certificates of such Class or Subclass.
WHEREAS, the Seller, the Servicer and the Trustee desire to amend the
Agreement, as set forth in this Amendment and have obtained the consent of the
Holder of 100% Percentage Interest of the Class A-18 Certificates and the
Opinion of Counsel required by Section 10.01 in connection with such amendment.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the
Seller, the Servicer and the Trustee agree as follows:
All terms used in this Amendment which are defined in the Agreement, either
directly or by reference therein, have the meanings assigned to them therein,
except to the extent such terms are defined or modified in this Amendment or
the context clearly requires otherwise.
Section 1. Amendment of Section 1.01. Article I of the Agreement is hereby
amended as follows:
(a) The definition of "Denomination" is amended to read as follows:
Denomination: The amount, if any, specified on the face of each Certificate
(other than a Class A-8 or Class A-18 Certificate) representing the principal
portion of the Cut-Off Date Aggregate Principal Balance evidenced by such
Certificate. As to a Class A-8 Certificate, the amount specified on the face
of such Certificate representing the portion of the Original Class A-8 Notional
Amount evidenced by such Certificate. As to a Class A-18 Certificate, the
amount specified on the face of such Certificate representing the portion of
the Initial Class A-18 Notional Amount evidenced by such Certificate.
(b) A new definition "Initial Class A-18 Notional Amount" is added to read
as follows:
Initial Class A-18 Notional Amount: The Initial Class A-18 Notional Amount as
set forth in Section 11.29.
(c) The third sentence of the definition of "Percentage Interest" is amended
to read as follows:
With respect to a Class A-18 Certificate, the undivided percentage interest
obtained by dividing the initial notional amount of such Certificate by the
Initial Class A-18 Notional Amount.
Section 2. Amendment of Section 5.01(a). The first sentence of Section
5.01(a) of the Agreement is hereby amended to read as follows:
(a) The Class A, Class M and Class B Certificates shall be issued only in
minimum denominations of a Single Certificate and, except for the Class A-18,
Class A-R, Class A-LR and Class B Certificates, integral multiples of $1,000
(or $1 in the case of Class B Certificates and any amount in the case of the
Class A-18 Certificates) in excess thereof (except, if necessary, for one
Certificate of each Class or Subclass that evidences one Single Certificate
<PAGE>
plus such additional principal portion as is required in order for all
Certificates of such Class or Subclass to equal the aggregate Original Class A
Subclass Principal Balance of such Subclass or the Original Class B Principal
Balance or the Original Class M Principal Balance, as the case may be), and
shall be substantially in the respective forms set forth as Exhibits A-1, A-2,
A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11, A-12, A-13, A-14, A-15, A-16, A-
17, A-18, A-R, A-LR, B, C and D (reverse side of Certificates) hereto.
Section 3. Amendment of Section 5.02(b) and 5.02(c). Sections 5.02(b) and
5.02(c) of the Agreement are hereby amended to read as follows:
(b) No transfer of a Class B Certificate shall be made unless the
registration requirements of the Securities Act of 1933, as amended, and any
applicable State securities laws are complied with, or such transfer is exempt
from the registration requirements under said Act and laws. In the event that
a transfer is to be made in reliance upon an exemption from said Act or laws,
(i) unless such transfer is made in reliance on Rule 144A, the Trustee or the
Seller may, if such transfer is to be made within three years from the date of
the initial sale of Certificates, require a Class B Certificateholder to
deliver a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Seller, to the effect that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from said Act and laws or is being made pursuant to said
Act and laws, which Opinion of Counsel shall not be an expense of the Trustee,
the Seller or the Servicer, and (ii) the Trustee shall require the transferee
to execute an investment letter in the form of Exhibit J hereto certifying to
the Seller and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee, the Seller or the
Servicer. The Holder of a Class B Certificate desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Seller, the
Servicer and any Paying Agent acting on behalf of the Trustee against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws. Neither the Seller nor the
Trustee is under an obligation to register the Class B Certificates under said
Act or any other securities law.
(c) No transfer of a Class M or Class B Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Class B Certificate in the form of Exhibit J hereto, or, in
the case of such Class M Certificate, in the form of Exhibit K hereto, to the
effect that such transferee is not an employee benefit plan subject to the
fiduciary responsibility provisions of ERISA, or a governmental plan as defined
in Section 3(32) of ERISA or Code Section 4975 subject to any federal, state or
local law ("Similar Law") which is to a material extent, similar to the
foregoing provisions of ERISA or the Code (collectively, a "Plan") and is not a
person acting on behalf of any such Plan or using the assets of any such Plan
to effect such purchases, which representation letter shall not be an expense
of the Trustee, the Seller or the Servicer, or (ii) in the case of any such
Class M or Class B Certificate presented for registration in the name of a
Plan, or a trustee of any such Plan, an Opinion of Counsel satisfactory to the
Trustee and the Seller to the effect that the purchase or holding of such Class
M or Class B Certificate will not result in the assets of the Trust Estate
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code or Similar Law and will not subject the
Trustee, the Seller or the Servicer to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Seller or the Servicer. The Class M and Class B
Certificates shall bear a legend referring to the foregoing restrictions
contained in this paragraph and in the case of the Class B Certificates, the
<PAGE>
preceding paragraph.
Section 4. Amendment of Section 11.16. Section 11.16 of the Agreement is
hereby amended to read as follows:
Section 11.16. Wire Transfer Eligibility. With respect to the Certificates
(other than the Class A-3, Class A-8, Class A-9, Class A-12, Class A-13, Class
A-15, Class A-18, Class A-R and Class A-LR Certificates), the minimum
Denomination eligible for wire transfer on each Distribution Date is
$5,000,000.00. With respect to the Class A-3, Class A-8, Class A-9, Class A-
12, Class A-13, or Class A-15 Certificates, the minimum Denomination eligible
for wire transfer on each Distribution Date is 100% Percentage Interest. With
respect to the Class A-18 Certificates, the minimum Percentage Interest
eligible for wire transfer on each Distribution Date is 25% Percentage
Interest. The Class A-R and Class A-LR Certificates are not eligible for wire
transfer.
Section 5. Amendment of Section 11.17. Section 11.17 of the Agreement is
hereby amended to read as follows:
Section 11.17. Single Certificate. A Single Certificate for each Subclass of
Class A Certificates (other than the Class A-8, Class A-18, Class A-R and Class
A-LR Certificates), the Class M Certificates and the Class B Certificates
represents a $100,000 Denomination. A Single Certificate for the Class A-8
Certificates represents a $6,200,000 Denomination. A Single Certificate for
the Class A-R and Class A-LR Certificates represents a $1,000 Denomination. A
Single Certificate for the Class A-18 Certificates represents a $190,000,000
Initial Class A-18 Notional Amount.
Section 6. Addition of Section 11.29. A new Section 11.29 is added to read
as follows:
Section 11.29. Initial Class A-18 Notional Amount. The Initial Class A-18
Notional Amount is $450,794,419.25.
Section 7. Amendment of Exhibit A-18. Exhibit A-18 to the Agreement is
hereby amended as attached hereto as Exhibit A.
Section 8. Amendment of Exhibit J. Exhibit J to the Agreement is hereby
amended as attached hereto as Exhibit B.
Section 9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of such counterparts shall together constitute but one and the same
instrument.
Section 10. Ratification of Agreement. Except as modified and expressly
amended by this Agreement, the Agreement is in all respects ratified and
confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
Section 11. Governing Law. This Amendment shall be construed in
accordance with the laws of the State of New York (without regard to conflicts
of laws principles), and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
THE PRUDENTIAL HOME MORTGAGE
SECURITIES COMPANY, INC.
as Seller
By:
Name: M. Kathryn Gray
Title: Vice President
THE PRUDENTIAL HOME MORTGAGE
COMPANY, INC.
as Servicer
By:
Name: M. Kathryn Gray
Title: Vice President
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By:
Name:
Title:
Attest:
By:______________________
Name:____________________
Title:_____________________
<PAGE>
STATE OF NEW YORK)
ss.:
COUNTY OF NEW YORK)
On this 10th day of November, 1995, before me, a notary public in and for the
State of New York, personally appeared M. Kathryn Gray, known to me who, being
by me duly sworn, did depose and say that she resides at Brookeville, Maryland;
that she is a Vice President of The Prudential Home Mortgage Securities
Company, Inc., a Delaware corporation, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the
Board of Directors of said corporation.
_________________________
Notary Public
[NOTARIAL SEAL]
<PAGE>
STATE OF NEW YORK)
ss.:
COUNTY OF NEW YORK)
On this 10th day of November, 1995, before me, a notary public in and for the
State of New York, personally appeared M. Kathryn Gray, known to me who, being
by me duly sworn, did depose and say that she resides at Brookeville, Maryland;
that she is a Vice President of The Prudential Home Mortgage Company, Inc., a
New Jersey corporation, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said corporation.
_________________________
Notary Public
[NOTARIAL SEAL]
<PAGE>
STATE OF _________)
ss.:
COUNTY OF ________)
On this _____ day of November, 1995 before me, a notary public in and for the
State of , personally appeared , known to me
who, being by me duly sworn, did depose and say that she resides at
; that she is the ______________ of First Trust National Association, a
national banking association, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said association.
_________________________
Notary Public
[NOTARIAL SEAL]
STATE OF _________)
ss.:
COUNTY OF ________)
On this ____ day of November, 1995 before me, a notary public in and for the
State of , personally appeared , known to me
who, being by me duly sworn, did depose and say that she resides at
; that she is the ______________ of First Trust National Association, a
national banking association, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said association.
_________________________
Notary Public
[NOTARIAL SEAL]
EXHIBIT A-18
[FORM OF FACE OF CLASS A-18 CERTIFICATE]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1994-8, CLASS A-18
evidencing an interest in a pool of fixed
interest rate, conventional, monthly pay,
fully amortizing, first lien, one- to
four-family mortgage loans, which may
include loans secured by shares issued by
cooperative housing corporations, sold by
THE PRUDENTIAL HOME MORTGAGE SECURITIES COMPANY, INC.
(Not an interest in or obligation of the Seller)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, THE
SELLER, ANY AFFILIATE OF THE SELLER OR THE TRUSTEE, AND IS NOT INSURED OR
GUARANTEED BY THE SELLER, ANY AFFILIATE OF THE SELLER, THE TRUSTEE, ANY
GOVERNMENT AGENCY OR PRIVATE INSURER.
Certificate No.
Percentage Interest evidenced
by this Certificate: %
Denomination: $ (Initial Class A-18 Notional Amount)
Cut-Off Date: February 1, 1994
First Distribution Date: March 25, 1994
CUSIP No:
<PAGE>
THIS CERTIFIES THAT _______________________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in monthly distributions
to the Holders of the Class A-18 Certificates with respect to a Trust Estate
consisting of a pool of fixed interest rate, conventional, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans, which
may include loans secured by shares issued by cooperative housing corporations
(the "Mortgage Loans") formed by The Prudential Home Mortgage Securities
Company, Inc. (hereinafter called the "Seller", which term includes any
successor entity under the Agreement referred to below). The Trust Estate was
created pursuant to a Pooling and Servicing Agreement dated as of February 16,
1994 (the "Agreement") among the Seller, The Prudential Home Mortgage Company,
Inc., as servicer (the "Servicer"), and First Trust National Association, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereinafter. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to such terms in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
preceding the month of such distribution, in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the Class A Subclass
Distribution Amount for the Class A-18 Certificates required to be distributed
to Holders of Class A-18 Certificates on such Distribution Date, subject to
adjustment in certain events as specified in the Agreement. Distributions in
reduction of the principal balance of certain Subclasses of Class A
Certificates may not commence on the first Distribution Date specified above.
The Class A-18 Certificates are not entitled to distributions of principal.
Interest will accrue on the Class A-18 Certificates during each month in an
amount equal to the product of (A) 1/12th of (i) the weighted average Net
Mortgage Interest Rate of the Mortgage Loans on the first day of such month
minus (ii) 7.30% and (B) the Class A-18 Notional Amount as of the related
Distribution Date. The amount of interest which accrues on this Certificate in
any month will be subject to adjustment with respect to any Non-Supported
Interest Shortfall and the interest portion of certain Realized Losses
allocated to the Class A-18 Certificates, as described in the Agreement.
Distributions on this Certificate will be made on behalf of the Trustee either
by the Servicer or by a Paying Agent appointed by the Servicer by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, unless such Person is entitled to receive
payments by wire transfer of immediately available funds in accordance with the
Pooling and Servicing Agreement and such Person has notified the Servicer
pursuant to the Pooling and Servicing Agreement that such payments are to be
made by wire transfer of immediately available funds. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
of the pendency of such distribution and only upon presentation and surrender
of this Certificate at the office or agency specified by the Trustee for that
purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
This Certificate is issued on February 16, 1994, at an issue price of 0.22221%
of the initial Class A-18 Notional Amount, including accrued interest, and a
stated redemption price at maturity equal to all interest distributions hereon,
and is issued with original issue discount ("OID") for federal income tax
purposes. Assuming (a) that this Certificate pays in accordance with projected
cash flows reflecting the prepayment assumption of 400% SPA (as defined in the
Prospectus Supplement dated February 9, 1994 with respect to the offering of
the Class A Certificates and the Class M Certificates) used to price this
Certificate and (b) that the interest rate at which distributions of interest
on this Certificate actually will be made will be determined as though the
pass-through rate on this Certificate applicable to the first Distribution Date
will not change thereafter: (i) the amount of OID as a percentage of the
initial Class A-18 Notional Amount is approximately 0.15818273%; and (ii) the
annual yield to maturity of this Certificate, compounded monthly, is
approximately 18.66%. There is no short first accrual period.
This Certificate constitutes a "regular interest" in a "real estate mortgage
investment conduit" as those terms are defined in Section 860G(a)(1) and
Section 860D, respectively, of the Internal Revenue Code of 1986, as amended.
Unless this Certificate has been countersigned by an authorized officer of the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed
as of the date set forth below.
Dated:
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
By____________________________
Authorized Officer
Countersigned:
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
By ________________________
Authorized Officer
EXHIBIT J
THE PRUDENTIAL HOME MORTGAGE SECURITIES COMPANY, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1994-8
CLASS B CERTIFICATES
TRANSFEREE'S LETTER
_________________ __, ____
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
The Prudential Home Mortgage Securities Company, Inc.
5325 Spectrum Drive
Frederick, Maryland 21701
The undersigned (the "Purchaser") proposes to purchase The Prudential Home
Mortgage Securities Company, Inc. Mortgage Pass-Through Certificates, Series
1994-8, Class B Certificates (the "Class B Certificates") in the principal
amount of $___________. In doing so, the Purchaser hereby acknowledges and
agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not otherwise
defined herein shall have the meaning ascribed to it in the Pooling and
Servicing Agreement, dated as of February 16, 1995 (the "Pooling and Servicing
Agreement") between The Prudential Home Mortgage Securities Company, Inc., as
seller ("PHMSC"), The Prudential Home Mortgage Company, Inc., as servicer (the
"Servicer") and First Trust National Association, as trustee (the "Trustee"),
of The Prudential Home Mortgage Securities Company, Inc. Mortgage Pass-Through
Certificates, Series 1994-8.
Section 2. Representation and Warranties of the Purchaser. In connection with
the proposed transfer, the Purchaser represents and warrants to PHMSC and the
Trustee that:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which the Purchaser is
organized, is authorized to invest in the Class B Certificates, and to enter
into this Agreement, and duly executed and delivered this Agreement.
(b) The Purchaser is acquiring the Class B Certificates for its own
account as principal and not with a view to the distribution thereof, in whole
or in part.
[(c) The Purchaser has knowledge of financial and business matters and
is capable of evaluating the merits and risks of an investment in the Class B
Certificates; the Purchaser has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision; and the
Purchaser is able to bear the economic risk of an investment in the Class B
Certificates and can afford a complete loss of such investment.]
[(c) The Purchaser is a "Qualified Institutional Buyer" within the
meaning of Rule 144A of the Act.]
(d) The Purchaser confirms that (a) it has had the opportunity to ask
questions of, and receive answers from The Prudential Home Mortgage Securities
Company, Inc. concerning the Class B Certificates and all matters relating
thereto, and obtain any additional information (including documents) relevant
to its decision to purchase the Class B Certificates that PHMSC possesses or
can possess without unreasonable effort or expense, and (b) it has undertaken
<PAGE>
its own independent analysis of the investment in the Class B Certificates.
The Purchaser will not use or disclose any information it receives in
connection with its purchase of the Class B Certificates other than in
connection with a subsequent sale of Class B Certificates.
(e) The Purchaser (i) is not an employee benefit plan subject to the
fiduciary responsibility provisions of the Employee Retirement Income Security
Act of 1974, as amended, ("ERISA") or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or any governmental plan, as defined in
Section 3(32) of ERISA subject to any federal, state or local law ("Similar
Law") which is, to a material extent, similar to the foregoing provisions of
ERISA or the Code (collectively, a "Plan"), an agent acting on behalf of a
Plan, or a person utilizing the assets of a Plan or (ii) has provided a
"Benefit Plan Opinion" satisfactory to The Prudential Home Mortgage Securities
Company, Inc. and the Trustee of the Trust Estate. A Benefit Plan Opinion is
an opinion of counsel to the effect that the proposed transfer will not (a)
cause the assets of the Trust Estate to be regarded as "plan assets" and
subject to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of the Code or Similar Law, (b) give rise to a fiduciary
duty under ERISA, Section 4975 of the Code or Similar Law on the part of The
Prudential Home Mortgage Securities Company, Inc., the Servicer or the Trustee
with respect to any Plan or (c) constitute a prohibited transaction under ERISA
or Section 4975 of the Code or Similar Law.
(f) If the Purchaser is a depository institution subject to the
jurisdiction of the Office of the Comptroller of the Currency ("OCC"), the
Board of Governors of the Federal Reserve System ("FRB"), the Federal Deposit
Insurance Corporation ("FDIC"), the Office of Thrift Supervision ("OTS") or the
National Credit Union Administration ("NCUA"), the Purchaser has reviewed the
"Supervisory Policy Statement on Securities Activities" dated January 28, 1992
of the Federal Financial Institutions Examination Council as adopted by the
OCC, FRB, FDIC, OTS and NCUA (with modifications as applicable), as
appropriate, other applicable investment authority, rules, supervisory policies
and guidelines of these agencies and, to the extent appropriate, state banking
authorities and has concluded that its purchase of the Offered Class B
Certificates is in compliance therewith.
Section 3. Transfer of Class B Certificates.
(a) The Purchaser understands that the Class B Certificates have not
been registered under the Securities Act of 1933 (the "Act") or any state
securities laws and that no transfer may be made unless the Class B
Certificates are registered under the Act and applicable state law or unless an
exemption from registration is available. The Purchaser further understands
that neither PHMSC nor the Trustee is under any obligation to register the
Class B Certificates or make an exemption available. In the event that such a
transfer is to be made in reliance upon an exemption from the Act or applicable
state securities laws, (i) the Trustee shall require, in order to assure
compliance with such laws, that the Certificateholder's prospective transferee
each certify to PHMSC and the Trustee as to the factual basis for the
registration or qualification exemption relied upon, and (ii) unless the
transferee is a "Qualified Institutional Buyer" within the meaning of Rule 144A
of the Act, the Trustee or PHMSC may, if such transfer is made within three
years from the Closing Date, require an Opinion of Counsel that such transfer
may be made pursuant to an exemption from the Act and state securities laws,
which Opinion of Counsel shall not be an expense of the Trustee or PHMSC. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and PHMSC against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
<PAGE>
(b) No transfer of a Class B Certificate shall be made unless the
transferee provides PHMSC and the Trustee with a Transferee's Letter,
substantially in the form of this Agreement.
(c) The Purchaser acknowledges that its Class B Certificates bear a
legend setting forth the applicable restrictions on transfer.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Agreement to the validly
executed by its duly authorized representative as of the day and the year first
above written.
[PURCHASER]
By:
Its:
