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Mortgage Loan Custodial Agreement

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Sectors: Banking
Governing Law: New York, View New York State Laws
Effective Date: March 04, 1994
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EXHIBIT 10.8


DRY/CW/CONDUIT PROGRAMS
3/04/94


MORTGAGE LOAN CUSTODIAL AGREEMENT
---------------------------------


PURCHASER: PAINE WEBBER REAL ESTATE SECURITIES INC.


ADDRESS: 1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
ATTENTION: AL MARRAPODI


CUSTODIAN: CHEMICAL BANK


ADDRESS: 55 WATER STREET
NEW YORK, NEW YORK 10041
ATTENTION:


SELLER: CRESCENT BANK AND TRUST COMPANY


ADDRESS: SOUTH TERRACES, SUITE 285
115 PERIMETER CENTERPLACE
ATLANTA, GA 30346


DATE: MAY 23, 1994


TABLE OF CONTENTS
-----------------


Section 1. Definitions......................................................................... 1


Section 2. Delivery of Documents by Seller..................................................... 9


Section 3. Custodian as Custodian for, and Bailee of, Purchaser, Assignee and Warehouse
Lender.............................................................................. 10


Section 4. Certification by Custodian; Delivery of Documents................................... 11


Section 5. Funding by the Takeout Investor..................................................... 14


Section 6. Default............................................................................. 15


Section 7. Access to Documents................................................................. 15


Section 8. Custodian's Fees and Expenses; Successor Custodian; Standard of Care................ 15


Section 9. Assignment by Purchaser............................................................. 17


Section 10. Insurance........................................................................... 17


Section 11. Representations, Warranties and Covenants........................................... 18


Section 12. No Adverse Interests................................................................ 19


Section 13. Amendments.......................................................................... 19


Section 14. Execution in Counterparts........................................................... 19


Section 15. Agreement for Exclusive Benefit of Parties; Assignment.............................. 20


Section 16. Effect of Invalidity of Provisions.................................................. 20


Section 17. Governing Law....................................................................... 20


Section 18. Consent to Service.................................................................. 20


Section 19. Notices............................................................................. 20


Section 20. Certification....................................................................... 20


Section 21. Construction........................................................................ 20


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Exhibit A Dry Submission Package Exhibit B-1 Cash Window Submission Package Exhibit B-2 FHLMC Document List Exhibit B-3 FNMA Document List Exhibit B-4 FNMA Bailee Letter Exhibit C-1 Conduit Submission Package Exhibit C-2 Conduit Bailee Letter Exhibit D Conversion Submission Packages Exhibit E Request for Certification Exhibit F Document Codes Exhibit G-1 Warehouse Lender's Release Exhibit G-2 Warehouse Lender's Wire Instructions Exhibit H-1 Seller's Release Exhibit H-2 Seller's Wire Instructions Exhibit I-1 Purchaser's Wire Instructions to Seller Exhibit I-2 Purchaser's Wire Instructions to Custodian Exhibit I-3 Purchaser's Delivery Instructions to Custodian Exhibit J Notice by Assignee to Custodian of Purchaser's Default Exhibit K Limited Power of Attorney Exhibit L Unidentified Mortgage Loans List Exhibit M Unidentified/Suspension Mortgage Loan Directive Exhibit N Form of Delivery Instructions Exhibit O Purchaser's Instructions to Custodian to Destroy Specified Files Exhibit P List of Primary Mortgage Insurer Schedule A List of Conduits


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MORTGAGE LOAN CUSTODIAL AGREEMENT


THIS Mortgage Loan Custodial Agreement ("Agreement"), dated as of the date set forth on the cover page hereof, among PAINE WEBBER REAL ESTATE SECURITIES INC. ("Purchaser"), CHEMICAL BANK ("Custodian") and the SELLER whose name is set forth on the cover page hereof ("Seller").


PRELIMINARY STATEMENT


Purchaser has agreed to purchase, from time to time, at its sole election from Seller, certain residential first mortgage loans pursuant to the terms and conditions of one or more Purchase Agreements between Purchaser and Seller relating to Dry Transactions, Cash Window Transactions or Conduit Transactions. Seller is obligated to service the Mortgage Loans pursuant to the terms and conditions of the Purchase Agreements. Purchaser desires to have Custodian take possession of the Mortgage Notes evidencing the Mortgage Loans, along with certain other documents specified herein, as the custodian for and bailee of Purchaser or Assignee in accordance with the terms and conditions hereof.


The parties hereto agree as follows:


Section 1. Definitions.
-----------


As used in this Agreement, the following terms shall have the
following meanings:


"Agency": FHLMC or FNMA, as applicable.


"Applicable Agency Documents": The documents listed on Exhibit B-
2 or Exhibit B-3, as applicable.


"Applicable Guide": With respect to each Takeout Investor the
applicable guide published by such Takeout Investor setting forth the
requirements each Mortgage Loan needs to satisfy in order to be
eligible for purchase by such Takeout Investor, as such guide may be
amended or supplemented from time to time.


"Assignee": Chemical Bank, as agent for certain beneficiaries
pursuant to certain Repurchase Transaction Tri-Party Custody
Agreements.


"Assignment of Mortgage": An assignment of the Mortgage, notice
of transfer or equivalent instrument sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of a Mortgage Loan.


1


"Bailee Letter": A FNMA Bailee Letter or a Conduit Bailee
Letter, as applicable.


"Business Day": Any day other than (a) a Saturday, Sunday or
other day on which banks located in The City of New York, New York are
authorized or obligated by law or executive order to be closed, or (b)
any day on which Paine Webber Real Estate Securities Inc. is closed
for business, provided that notice thereof shall have been given not
less than sevens calendar days prior to such day.


"Cash Window Submission Package": The documents listed on
Exhibit B-1, which shall be delivered by Seller to Custodian in
connection with each Cash Window Transaction.


"Cash Window Transaction": A transaction initiated by
Purchaser's delivery of a Request for Certification which identifies
FNMA or FHLMC as the Takeout Investor but does not include a
Conversion Code.


"Certification": With respect to a Mortgage Loan, the full
performance by Custodian of the procedures set forth in Sections 4(a)
and 4(b).


"Certification Code": A Mortgage Loan Absentee Code, a Mortgage
Loan Approval Code or a Mortgage Loan Suspension Code.


"Certification Report": A Request for Certification to which
Custodian has added its Certification Codes and, when a Certification
Code indicates suspension, applicable Exception Codes, and which is
transmitted by Custodian to Purchaser in an appropriate data layout
provided by Purchaser.


"Commitment": A commitment executed by Takeout Investor and
Seller evidencing Takeout Investor's agreement to purchase one or more
Mortgage Loans from Seller and Seller's agreement to sell one or more
Mortgage Loans to an investor in a forward trade by the applicable
Commitment Expiration Date.


"Commitment Expiration Date": With respect to any Commitment, the
expiration date thereof.


"Conduit": Any of the Entities listed on Schedule A, as amended
or supplemented from time to time.


"Conduit Bailee Letter": The master bailee letter, in the form of
Exhibit C-2, for use by Custodian in connection with the delivery of a


2


Conduit Submission Package, provided, however, for the purposes of
delivering the related Conduit Submission Package, excluding (i) a
copy of the Commitment, (ii) the Warehouse Lender's Release or
Seller's Release, as applicable, and (iii) the original Assignment of
Mortgage, in blank, to a Conduit.


"Conduit Submission Package": The documents listed on Exhibit C-
1, which shall be delivered by Seller to Custodian in connection with
each Conduit Transaction.


"Conduit Transaction": A transaction initiated by Purchaser's
delivery of a Request for Certification which identifies a Conduit as
the Takeout Investor but does not include a Conversion Code.


"Confirmation": A confirmation confirming a trade between Seller
and Takeout Investor.


"Conversion Code": With respect to a Mortgage Loan, the
conversion code set forth in Part II of Exhibit F, entered by
Purchaser, along with the Program Code, in the "PROG CODE" column of
the related Request for Certification indicating that (i) such
Mortgage Loan was previously acquired by Purchaser in a Dry
Transaction and (ii) a Conversion Submission Package shall be received
by Custodian on the applicable Delivery Date.


"Conversion Submission Package": One of the sets of documents
listed on Exhibit D, which shall be delivered by Seller to Custodian
in connection with each Conversion Transaction.


"Conversion Transaction": With respect to a Mortgage Loan, a
transaction initiated by Purchaser's delivery to Custodian of a
Request for Certification containing a Conversion Code. A Conversion
Transaction shall always be preceded by a Dry Transaction.


"Custodian": Chemical Bank and its permitted successors
hereunder.


"Delivery Date": With respect to a Mortgage Loan, the date set
forth on the related Request for Certification in the "DELIVERY DATE"
column, which shall be the Business Day on which Seller desires the
applicable portion of the related Submission Package be sent by
----
Custodian to the Takeout Investor, i.e., one Business Day prior to the
Business Day on which Seller desires the applicable portion of the
Submission Package to be received by the Takeout Investor.
--------


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"Delivery Directive": With respect to each Mortgage Loan either
appearing on an Unidentified Mortgage Loan List or marked by Custodian
with a Suspension Code on a Certification Report, the delivery
directive, set forth in Part IV of Exhibit F, used by Purchaser in a
notice in the form of Exhibit M, to direct Custodian to deliver the
related Submission Package in accordance with the Delivery
Instructions.


"Delivery Instructions": With respect to a Mortgage Loan,
instructions prepared by Seller, in the form of Exhibit N indicating
the address for the delivery by Custodian of the applicable portion of
the related Submission Package.


"Dry Submission Package": The documents listed on Exhibit A,
which shall be delivered by Seller to Custodian in connection with
each Dry Transaction.


"Dry Transaction": A transaction initiated by Purchaser's
delivery to Custodian of a Request for Certification, which does not
identify a Takeout Investor, and which does not include a Conversion
Code.


"Entity": Any individual, corporation, partnership, joint
venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.


"Exception Code": Each of the exception codes set forth in Part
V of Exhibit F, placed by Custodian on a Certification Report
indicating missing documents, incomplete documents and deficiencies in
documents reviewed by Custodian.


"Expected Delivery Date": The date identified on a Request for
Certification as the "Expected Delivery Date of Mortgage File", which
shall be the date on which Seller has informed Purchaser that a
Submission Package will be received by Custodian from Seller.


"FHLMC": The Federal Home Loan Mortgage Corporation and any
successor thereto.


"FHLMC Commitment": A commitment executed by FHLMC and Seller
evidencing FHLMC's agreement to purchase one or more Mortgage Loans
from Seller and Seller's agreement to sell one or more Mortgage Loans
to FHLMC by the applicable Commitment Expiration Date under the
Applicable Guide.


4


"FNMA": The Federal National Mortgage Association and any
successor thereto.


"FNMA Bailee Letter": The master bailee letter, in the form of
Exhibit B-4, for use by Custodian in connection with the delivery to
FNMA of the Cash Window Submission Package, excluding (i) the original
Assignment of Mortgage, in blank, (ii) the Warehouse Lender's Release
or Seller's Release, as applicable, (iii) all modification agreements
relating to a Mortgage, (iv) the Delivery Instructions and (v) a copy
of the Commitment.


"FNMA Commitment": A commitment executed by FNMA and Seller,
evidencing FNMA's agreement to purchase one or more Mortgage Loans
from Seller and Seller's agreement to sell one or more Mortgage Loans
to FNMA by the applicable Commitment Expiration Date under the
Applicable Guide.


"Hold Directive": With respect to a Mortgage Loan either
appearing on an Unidentified Mortgage Loan List or marked by Custodian
with a Suspension Code on a Certification Report, the hold directive,
set forth in Part IV of Exhibit F, used by Purchaser in a notice in
the form of Exhibit M to direct Custodian to continue to hold the
related Submission Package.


"HUD": United States Department of Housing and Urban Development
and any successor thereto.


"Limited Power of Attorney": A limited power of attorney, in the
form of Exhibit K, executed by Seller and delivered to Custodian,
authorizing Custodian to prepare Mortgage Note endorsements in the
form indicated thereon.


"Loan Identification Data": The applicable information regarding
a Mortgage Loan, set forth on a Request for Certification, which shall
include Purchaser's reference number, the name of Purchaser's
applicable program, the Mortgage Loan number, the last name of the
Mortgagor, the face amount of the Mortgage Note, the number of months
to maturity of the Mortgage Loan, and the interest rate borne by the
Mortgage Note and, solely with respect to Cash Window Transactions,
Conduit Transactions and Conversion Transactions, the name of the
Takeout Investor, the sale price of the Mortgage Loan to the Takeout
Investor, the commitment number, the Commitment Expiration Date, the
Delivery Date, the Release Payment, and the name of the Warehouse
Lender.


"Losses": Any and all losses, claims, damages, liabilities or
expenses (including reasonable attorney's fees) incurred by any person


5


specified; provided however that "Losses" shall not include losses,
claims, damages, liabilities or expenses which would have been avoided
had such person taken reasonable actions to mitigate such losses,
claims, damages, liabilities or expenses.


"Mortgage": A mortgage, deed of trust or other security
instrument creating a first lien on an estate in fee simple in real
property securing a Mortgage Note.


"Mortgage Loan": A one-to-four family residential mortgage loan
that is subject to this Agreement.


"Mortgage Loan Absentee Code": The mortgage loan absentee code,
set forth in Part III of Exhibit F, placed by Custodian on a
Certification Report to notify Purchaser that a Submission Package
related to a Mortgage Loan listed on a Request for Certification is
not in Custodian's possession.


"Mortgage Loan Approval Code": The mortgage loan approval code,
set forth in Part III of Exhibit F, placed by Custodian on a
Certification Report to notify Purchaser that Custodian's review of
the applicable items in a Submission Package is complete and that such
items satisfy all the applicable requirements set forth in Section
4(a) and Section 4(b).


"Mortgage Loan Suspension Code": The mortgage loan suspension
code, set forth in Part III of Exhibit F, placed by Custodian on a
Certification Report to notify Purchaser that Custodian's review of
the Submission Package has determined that one or more of the
documents in the Submission Package are missing, incomplete or
incorrect and/or do not satisfy one or more of the requirements set
forth in Section 4(a) or Section 4(b).


"Mortgage Note": The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.


"Mortgaged Property": The property subject to the lien of the
Mortgage securing a Mortgage Note.


"Mortgagor": The obligor on a Mortgage Note.


"Notice of Bailment": A notice, in the form of Schedule A to
Exhibit B-4 or C-2, as applicable, delivered by Custodian to Takeout
Investor in connection with each delivery to Takeout Investor of the
applicable portion of each Submission Package.


6


"Payee Number": The code used by FNMA to indicate the wire
transfer instructions that will be used by FNMA to purchase a Mortgage
Loan.


"Primary Mortgage Insurer": Any one of the Entities set forth on
Exhibit P, as such Exhibit may be amended or supplemented from time to
time.


"Program Code": Each of the codes, set forth in Part I of
Exhibit F, placed by the Purchaser in the "PROG CODE" column of a
Request for Certification indicating that the Mortgage Loan is being
offered by Seller to Purchaser in a Dry Transaction, Cash Window
Transaction or a Conduit Transaction, as applicable.


"Purchase Agreement": Each Mortgage Loan Purchase Agreement,
dated as of the date set forth on the cover page thereof, between
Seller and Purchaser, as each is amended from time to time providing
the terms of Dry Transactions, Cash Window Transactions, Conduit
Transactions or Conversion Transactions.


"Purchase Date": With respect to a Mortgage Loan, the date on
which Purchaser purchases such Mortgage Loan from Seller.


"Purchaser": Paine Webber Real Estate Securities Inc. and its
successors.


"Purchaser's Wire Instructions to Seller": The wire
instructions, set forth on Exhibit I-1, specifying the account which
shall be used for the payment of all amounts due and payable by Seller
to Purchaser hereunder.


"Purchaser's Payment": The amount set forth on the Request for
Certification in the "RELEASE PAYMENT" column.


"Purchaser's Wire Instructions to Custodian": Wire Instructions
delivered by Purchaser to Custodian, in the form of Exhibit I-2,
executed by Purchaser, receipt of which has been acknowledged by
Custodian specifying the wire address where all funds received in
accordance with Purchaser's Wire Instructions to Seller shall be
transferred by Custodian.


"Release Payment": The funds referred to in a Warehouse Lender's
Release or Seller's Release, as applicable.


"Request for, Certification": A report detailing Loan
Identification Data supplied by Seller to Purchaser, transmitted by
Purchaser to Custodian either via facsimile in the form of Exhibit E
or


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transmitted electronically in an appropriate data layout, regarding
all Mortgage Loans being offered for sale by Seller to Purchaser on
the Submission Package Delivery Date.


"Return Directive": With respect to each Mortgage Loan either
appearing on an Unidentified Mortgage Loan List or marked by Custodian
with a Suspension Code on a Certification Report, the return
directive, set forth in Part IV of Exhibit F, used by Purchaser in a
notice in the form of Exhibit M, to direct Custodian to deliver (i)
the related Submission Package in accordance with the terms of the
applicable bailee letter pursuant to which such Submission Package was
delivered to Custodian or (ii) the related Submission Package to the
Entity who sent such Submission Package to Custodian if no bailee
letter was included in the Submission Package, as applicable.


"Seller": The Seller whose name is set forth on the cover page
hereof, and its permitted successors hereunder.


"Seller's Release": A letter, in the form of Exhibit H-1,
delivered by Seller when no Warehouse Lender has an interest in a
Mortgage Loan, conditionally releasing all of Seller's right, title
and interest in such Mortgage Loan upon receipt of payment by Seller.


"Seller's Wire Instructions": The wire instructions, set forth
in a letter in the form of Exhibit H-2, to be used for the payment of
funds to Seller when no Warehouse Lender has an interest in the
Mortgage Loans to which such payment relates.


"Submission Package": With respect to each Mortgage Loan, a Dry
Submission Package, a Cash Window Submission Package, a Conduit
Submission Package or a Conversion Submission Package, as applicable.


"Successor Servicer": An entity designated by Purchaser, in
conformity with the Purchase Agreement, to replace Seller as servicer
for Purchaser, and, with respect to Cash Window Transactions, as
seller/servicer of the Mortgage Loans for the Agency.


"Takeout Investor": An Agency or a Conduit, as applicable.


"Underwriter": Any party, including but not limited to a
mortgage loan pool insurer, who underwrites a Mortgage Loan prior to
its purchase by Purchaser.


"Underwriter's Form": A FNMA/FHLMC Form 1008/1077, HUD 92900WS,
HUD92900.4, VA Form 26-6393, VA Form 26-1866, a


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mortgage loan pool insurance certificate, or an underwriting approval
form from a Primary Mortgage Insurer, as applicable, completed by an
Underwriter with respect to a Mortgage Loan, indicating that such
Mortgage Loan complies with its underwriting requirements.


"Unidentified/Suspension Mortgage Loan Directive": A Delivery
Directive, a Hold Directive or a Return Directive, as applicable.


"Unidentified Mortgage Loans List": A list of Mortgage Loans for
which Custodian has received the related Submission Packages from
Seller but which have not been identified by Purchaser in a Request
for Certification. Such list shall include, with respect to each
Mortgage Loan, the information set forth in Exhibit L.


"Warehouse Lender": Any lender providing financing to Seller in
any fractional amount for the purpose of originating or purchasing
Mortgage Loans, which lender has a security interest in such Mortgage
Loans as collateral for the obligations of Seller to such lender. In
all Dry Transactions and Conversion Transactions, Purchaser shall be
the Warehouse Lender.


"Warehouse Lender's Release": A letter, in the form of Exhibit
G-1, from a Warehouse Lender to Purchaser, conditionally releasing all
of Warehouse Lender's right, title and interest in certain Mortgage
Loans identifie
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