EXHIBIT 4.2
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LOAN SALE AGREEMENT
Dated as of December 1, 1996
among
WILSHIRE CREDIT CORPORATION,
FIRST BANK OF XXXXXXX HILLS, F.S.B.,
XXXXXX SAVINGS BANK, F.S.B.,
and
WILSHIRE MORTGAGE FUNDING COMPANY IV, INC.
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LOAN SALE AGREEMENT
LOAN SALE AGREEMENT (this "Sale Agreement"), dated as of December 1,
1996, among WILSHIRE CREDIT CORPORATION, a Nevada corporation ("WCC"), FIRST
BANK OF XXXXXXX HILLS, F.S.B., a chartered Federal savings bank ("First Bank"),
XXXXXX SAVINGS BANK, F.S.B., a chartered Federal savings bank ("Xxxxxx") (each a
"Seller" and collectively, the "Sellers"), and WILSHIRE MORTGAGE FUNDING COMPANY
IV, INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, the Company has been formed for the sole purpose of
purchasing and selling certain Mortgage Loans owned by WCC, First Bank and
Xxxxxx; and
WHEREAS, WCC, First Bank and Xxxxxx intend to sell, and the Company
intends to purchase, such Mortgage Loans;
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. Unless otherwise defined herein, all
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capitalized terms shall have the meanings set forth in the Pooling and Servicing
Agreement, dated as of December 1, 1996 (the "Pooling and Servicing Agreement"),
by and among the Company, as Unaffiliated Seller (in such capacity, the
"Unaffiliated Seller"), CS First Boston Mortgage Securities Corp., a Delaware
corporation, as depositor (in such capacity, the "Depositor"), Wilshire
Servicing Corporation, as servicer (in such capacity, the "Servicer"), and
Bankers Trust Company of California, N.A., a national banking association, as
trustee (in such capacity, the "Trustee") and as back-up servicer (in such
capacity, the "Back-Up Servicer").
Section 2. Agreement to Purchase. (a) On the Closing Date, the
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Company shall purchase, without recourse (except as provided herein and in the
Pooling and Servicing Agreement), all of WCC's, all of First Bank's and all of
Xxxxxx'x right, title and interest in and to (i) the Mortgage Loans listed on
the List of Loans, attached hereto as Schedule 1 (the "WCC Purchased Loans," the
"First Bank Purchased Loans," and the "Xxxxxx Purchased Loans", respectively,
and collectively, the "Purchased Loans"), (ii) the Loan Files with respect to
the Purchased Loans, (iii) all of WCC's, all of First Bank's and all of Xxxxxx'x
right, title and interest in the Loan Collateral, including, without limitation,
insurance policies and (iv) all monies due or to become due and all amounts
received with respect thereto after the opening of business on December 1, 1996,
including, without limitation, insurance policies (collectively, the "Purchased
Assets"),
from WCC, First Bank and Xxxxxx on the terms and subject to the conditions of
this Sale Agreement, the Unaffiliated Seller's Agreement, dated as of December
1, 1996 (the "Unaffiliated Seller's Agreement"), between the Company and the
Depositor, and of the Pooling and Servicing Agreement. In connection and
simultaneously with such sale, each of WCC, First Bank and Xxxxxx will transfer
the Mortgage Loans and the related Loan Files to the Trustee, and the Trustee
will take possession thereof.
(b) On or prior to the Closing Date, WCC will complete and deliver to
the Company the List of Loans, which will contain the Required Information with
respect to the Purchased Loans.
(c) On the Closing Date, the Company shall (i) pay to WCC a purchase
price equal to $_____________ (the "WCC Sale Price") by transferring such amount
to an account designated by WCC and (ii) pay to First Bank a purchase price
equal to $____________ (the "First Bank Sale Price") by transferring such amount
to an account designated by First Bank and (iii) pay to Xxxxxx a purchase price
equal to $__________ (the "Xxxxxx Sale Price", and together with the WCC Sale
Price and the First Bank Sale Price, the "Sale Price") by transferring such
amount to an account designated by Xxxxxx. Following delivery of the List of
Loans and payment of the Sale Price, the ownership of each Purchased Loan,
WCC's, First Bank's and Xxxxxx'x interest in the related Loan Collateral, all
proceeds thereof and the remainder of the Purchased Assets shall be vested in
the Company, and none of WCC, First Bank and Xxxxxx shall take any action
inconsistent with such ownership or claim any ownership interest in any such
Purchased Loan or the other Purchased Assets.
(d) The purchase of the Purchased Assets hereunder (the "Purchase")
shall be subject to the condition precedent that each of WCC, First Bank, Xxxxxx
and the Company shall have taken all other required action, including, but not
limited to, the delivery of approvals, consents, opinions, documents and
instruments required by the terms of the Pooling and Servicing Agreement and the
other documents entered into in connection with the transactions contemplated
thereby.
(e) On or prior to the Closing Date, each of WCC, First Bank and
Xxxxxx shall indicate in its respective Records that ownership of each Purchased
Loan and the other Purchased Assets is held by the Company. In addition, each
of WCC, First Bank and Xxxxxx shall respond to any inquiries with respect to
ownership of a Purchased Loan by stating that it is no longer the owner of such
Purchased Loan and that ownership of such Purchased Loan is held by the Company
or its assignees.
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(f) WCC, acting as sub-servicer, shall conduct the servicing,
administration and collection of each Purchased Loan and shall take, or cause to
be taken, all such actions as may be necessary or advisable to service,
administer and collect each Purchased Loan, in accordance with the terms of the
Pooling and Servicing Agreement. Any documents relating to Purchased Loans
held by WCC shall be held in trust for the benefit of the Company and its
assignees, and possession of any document relating to the Purchased Loans is for
the sole purpose of facilitating the servicing of the Purchased Loans. Such
possession thereof is in a custodial capacity for the benefit of the Company and
its assignees.
Section 3. Representations and Warranties and Covenants of the
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Sellers. (a) Pursuant to this Sale Agreement, each of WCC, First Bank and
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Xxxxxx, as of the Closing Date, make the following representations and
warranties with respect to itself, to the Company:
(i) It is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, is duly qualified to do
business and is in good standing in every jurisdiction in which the nature
of its business requires it to be so qualified.
(ii) It has the power and authority to own and convey all of its
properties and assets and to execute and deliver this Sale Agreement and to
perform the transactions contemplated hereby.
(iii) The execution, delivery and performance by it of this Sale
Agreement and the transactions contem plated hereby, (A) have been duly
authorized by all necessary corporate or other action on its part, (B) do
not contravene or cause it to be in default under (1) its organizational
documents, (2) any contractual restriction with respect to any of its debt
or contained in any material indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note, or other agreement or instrument
binding on or affecting it or its property or (3) any law, rule,
regulation, order, writ, judgment, award, injunction or decree applicable
to, binding on or affecting it or its property, and (C) do not result in or
require the creation of any Adverse Claim.
(iv) This Sale Agreement has been duly executed and delivered on
its behalf and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to bankruptcy
laws and other similar laws of general application affecting creditors, and
subject to the application of rules of
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equity, including those respecting the availability of specific
performance.
(v) All material actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits, authorizations, rights
and licenses required to be taken, given or obtained, as the case may be,
by or from any Governmental Authority, that are necessary in connection
with the performance by it of its obligations as a seller under this Sale
Agreement and, in the case of WCC only, as the sub-servicer referred to
under the Pooling and Servicing Agreement, have been obtained and are in
full force and effect and are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) which could have a material
adverse impact on its performance of its obligations under this Sale
Agreement.
(vi) There is no action, suit, proceeding or investigation
pending or, to the best of its knowledge, threatened, before any court,
administrative agency or tribunal against it which, either in any one
instance or in the aggregate, may result in any material adverse change in
its business, operations, financial condition, properties or assets or in
any material prohibition or impairment of its right or ability to carry on
its business substantially as now conducted, or which would draw into
question the validity or enforceability of this Sale Agreement or any of
the Purchased Loans or of any material action taken or to be taken in
connection with its obligations contemplated herein, or which would be
likely to impair materially its ability to perform under the terms of this
Sale Agreement or that might prohibit its entering into this Sale Agreement
or the consummation of any of the transactions contemplated hereby.
(vii) It is not in violation of or in default with respect to,
any order or decree of any court or any order or demand of any Governmental
Authority, which violation or default would materially and adversely affect
its condition (financial or other) or operations or its properties or its
performance hereunder.
(viii) No defaulted Debt exists under any instrument or
agreement evidencing, securing or providing for the issuance of its Debt.
(ix) The principal place of business and chief executive office
of each of WCC, First Bank and Xxxxxx are located at the address set forth
in the designated space beneath its respective signature line in this Sale
Agreement and, except as set forth in the designated space beneath its
respective signature line in this Sale
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Agreement, there are now no, and during the past four months there have not
been any, other locations where any of WCC, First Bank or Xxxxxx, as the
case may be, has been located (as that term is used in the Uniform
Commercial Code in the state of such location).
(x) The legal name of each of WCC, First Bank and Xxxxxx is as
set forth at the beginning of this Sale Agreement and none of WCC, First
Bank or Xxxxxx has changed its name in the last four years, and during such
period, neither First Bank nor Xxxxxx did use, nor does First Bank or
Xxxxxx now use, any tradenames, fictitious names, assumed names or "doing
business as" names; the only tradename, fictitious name, assumed name or
"doing business as" name used by WCC is Wilshire Mortgage Corporation.
(xi) It is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Sale Agreement; it is
paying its Debts as they mature; it has not sold any Mortgage Loan to the
Company with intent to hinder, delay or defraud any entity to which it was,
or became, after the date that such transfer was made, indebted; its sales
of the Mortgage Loans to the Company have been and will be made for
reasonably equivalent value and fair consideration; it has not incurred
Debts beyond its ability to pay as they mature; and it, after giving effect
to the transactions contemplated by this Sale Agreement, will have an
adequate amount of capital to conduct its business in the foreseeable
future.
(xii) For federal income tax, reporting and ac counting
purposes, it will treat the transfer of each Mortgage Loan pursuant to this
Sale Agreement as a sale, or absolute assignment, of its full right, title
and ownership interest in such Mortgage Loan to the Company, and it has not
in any other respect accounted for or treated the transactions contemplated
by this Sale Agreement.
(xiii) It has and maintains all permits, licenses,
authorizations, registrations, approvals and consents of Governmental
Authorities (including, without limitation, sales finance company licenses,
if any) necessary for (A) its activities and business as currently
conducted and as proposed to be conducted, (B) the ownership, use,
operation and maintenance of its properties, facilities and assets and (C)
the performance by it of this Sale Agreement.
(xiv) It has filed on a timely basis all tax returns (federal,
state, and local) required to be filed
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and has paid or made adequate provisions for the payment of all taxes,
assessments and other governmental charges due from it.
(xv) Each pension plan or profit sharing plan to which such
Seller is a party has been fully funded in accordance with its obligations
set forth in such plan.
(xvi) With respect to each Seller, there has occurred no event
which has a material adverse effect on its ability to perform its
obligations under this Sale Agreement.
(xvii) Its balance sheet as of the date of its most recently
completed fiscal year and its related statements of income and
shareholders' equity for the fiscal year then ended together with all
quarterly reports with respect to completed fiscal quarters occurring after
such fiscal year until the date of this representation and warranty, copies
of which have been furnished to the Company, fairly present its financial
condition, business and operations as at such date and the results of its
operations for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and since
such date of the most recent financial statements there has been no
material adverse change in any such condition, business or operations.
(xviii) It has valid business reasons for selling its interests
in the Purchased Loans rather than obtaining a loan with the Purchased
Loans as collateral.
(b) With respect to each Purchased Loan sold pursuant to this Sale
Agreement, WCC, as of the Closing Date, makes the representations and warranties
set forth in Section 3.05 of the Pooling and Servicing Agreement for the benefit
of the Company. Such representations and warranties are incorporated by
reference in this Section 3(b), and the Company may rely thereon as if such
representations and warranties were fully set forth herein.
(c) It is understood and agreed that the representations and
warranties in this Section 3 shall survive the sale of the Purchased Loans and
the other Purchased Assets to the Company and any sale or assignment of the
Purchased Loans and the other Purchased Assets by the Company to the Depositor
and by the Depositor to the Trustee for the benefit of the Trust and shall
continue so long as any Purchased Loan shall remain outstanding.
(d) Each of WCC, First Bank and Xxxxxx acknowledges that, pursuant to
the Unaffiliated Seller's Agreement, the
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Company has assigned all of its right, title and interest in and to the
Purchased Loans and the other Purchased Assets and its right to exercise the
remedies created by Section 4 hereof to the Depositor and that, pursuant to the
Pooling and Servicing Agreement, the Depositor has assigned all of its right,
title and interest in and to the Purchased Loans and the other Purchased Assets
and its right to exercise the remedies created by Section 4 hereof to the
Trustee, on behalf of the holders of the Certificates, as the case may be. Each
of WCC, First Bank and Xxxxxx agrees that the Trustee, on behalf of the holders
of the Certificates, may enforce directly, without joinder of the Company, the
repurchase obligations of WCC set forth in Section 4 hereof with respect to
breaches of the representations and warranties made by it set forth in this
Section 3.
(e) Each of WCC, First Bank and Xxxxxx covenants and agrees, so long
as any Certificates are outstanding, as follows:
(i) Any change in the location of the principal place of business or
chief executive office (as such terms are used in the Uniform Commercial
Code in the state of such location) of any of WCC, First Bank and Xxxxxx
occurring after the Closing Date shall be specifically disclosed to the
Company, the Depositor and the Trustee in writing.
(ii) Any change in the legal name of WCC, First Bank or Xxxxxx after
the Closing Date shall be specifically disclosed to the Company, the
Depositor and the Trustee in writing.
Section 4. Breach of Representations and Warranties; Repurchase of
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Purchased Loans. Upon discovery by WCC, First Bank, Xxxxxx or the Company of,
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or, upon a Responsible Officer of the Trustee, obtaining actual knowledge of, a
breach by WCC of any of the representations and warranties set forth in Section
3 hereof, without regard to any limitation set forth in such representation or
warranty concerning the knowledge of WCC as to the facts stated therein which
materially and adversely affects the value, or the interest, of the Trust in any
Purchased Loan, the party discovering such breach shall give prompt written
notice to the other parties. Thereafter, WCC shall, if such breach materially
and adversely affects the interests of the Trust or any holder of a Certificate,
as the case may be, in any Purchased Loan, on the Servicer Remittance Date in
the month following the expiration of a 60 day period since the date of notice
of such breach (the "Repurchase Date"), if such breach remains uncured,
repurchase such Purchased Loan by remitting to the Certificate Account, the
related Repurchase Price. Any
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such repurchase shall be made without recourse against, or warranty, express or
implied, of such transferring party.
Section 5. Assignment of Repurchased Loans. In the event a Purchased
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Loan is repurchased pursuant to Section 4 hereof, such Purchase Loan shall be
assigned to the related Seller, or its designee, in the manner described in the
Pooling and Servicing Agreement.
Section 6. Grant of Security Interest. It is the intention of the
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parties hereto that each transfer of Purchased Loans and the other Purchased
Assets to be made hereunder shall constitute a purchase and sale and not a loan
secured by such Purchased Loans and other Purchased Assets. In the event,
however, that a court of competent jurisdiction were to hold that the
transaction evidenced hereby constitutes a loan and not a purchase and sale, it
is the intention of the parties hereto that this Sale Agreement shall constitute
a security agreement under applicable law and that each of WCC, First Bank and
Xxxxxx shall be deemed to have granted to the Company a first priority security
interest in all of its respective right, title and interest in, to and under the
Purchased Loans, all payments of principal or interest on such Purchased Loans,
the Loan Collateral, subject to such Purchased Loans, any insurance policies
with respect to such Loan Collateral, all other Purchased Assets, and all
proceeds of any Purchased Loans and all other Purchased Assets.
Section 7. Notices, Etc. All notices and other communications
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provided for hereunder shall, unless otherwise stated herein, be in writing
(including telecommunication and express mail) and mailed or telecommunicated,
or delivered as to each party hereto, at its address set forth under its name on
the signature page hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices
and communications shall not be effective until received by the party to whom
such notice or communication is addressed.
Section 8. No Waiver; Remedies. No failure on the part of WCC,
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First Bank, Xxxxxx or the Company to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any other remedies provided by law.
Section 9. Binding Effect; Assignability. This Sale Agreement shall
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be binding upon and inure to the benefit of WCC, First Bank, Xxxxxx and the
Company, and their respective successors and permitted assigns. Except as set
forth in Section 3, no party to this Sale Agreement may assign
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any of its rights and obligations hereunder or any interest herein without the
prior written consent of each other party. Each of WCC, First Bank and Xxxxxx
hereby acknowledges and consents to the assignment by the Company to the
Depositor of all of the Company's rights hereunder and interests herein and by
the Depositor to the Trustee on behalf of the holders of the Certificates, of
all of such rights and interests. This Sale Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until its termination;
provided, that the rights and remedies described in Section 4 hereof with
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respect to any breach of any representation and warranty made by any of WCC,
First Bank and Xxxxxx pursuant to Section 3 hereof shall continue so long as any
of the Certificates are outstanding irrespective of any termination of this Sale
Agreement.
Section 10. Amendments; Consents and Waivers. No modification,
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amendment or waiver of, or with respect to, any provision of this Sale
Agreement, and all other agreements, instruments and documents delivered
pursuant hereto, nor consent to any departure by WCC, First Bank, Xxxxxx or the
Company from any of the terms or conditions hereof shall be effective unless it
shall be (a) in writing and signed by each of the parties hereto and (b)
consented to in writing by the Trustee. Any waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
consent to or demand by WCC, First Bank, Xxxxxx or the Company in any case
shall, in itself, entitle it to any other consent or further notice or demand in
similar or other circumstances. This Sale Agreement, the Unaffiliated Seller's
Agreement and the Pooling and Servicing Agreement and the documents referred to
herein and therein embody the entire agreement of WCC, First Bank, Xxxxxx and
the Company with respect to the Purchased Loans and supersede all prior
agreements and understandings relating to the subject hereof.
Section 11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
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TRIAL. (a) THIS SALE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
(b) WCC, FIRST BANK, XXXXXX AND THE COMPANY HEREBY SUBMIT TO THE NON-
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND
EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS
SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON RECEIPT THEREOF. WCC, FIRST BANK, XXXXXX AND THE COMPANY EACH
HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND
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ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 11 SHALL AFFECT THE RIGHT OF WCC, FIRST BANK,
XXXXXX OR THE COMPANY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT ANY SUCH PARTY'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) WCC, FIRST BANK, XXXXXX AND THE COMPANY EACH HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, SOUNDING IN CONTRACT,
TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION
WITH THIS SALE AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 12. Execution in Counterparts; Severability. This Sale
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Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and both of which
when taken together shall constitute one and the same agreement. In case any
provision in or obligation under this Sale Agreement shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation,
shall not in any way be affected or impaired thereby in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have caused this Sale Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
WILSHIRE CREDIT CORPORATION
By /s/ Xxxxxxxx Xxxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxxx
Title: President
Address: 0000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
FIRST BANK OF XXXXXXX HILLS, F.S.B.
By /s/ R. Xxxxx Xxxxxxxxx
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Name: R. Xxxxx Xxxxxxxxx
Title: President
Address: 0000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
XXXXXX SAVINGS BANK, F.S.B.
By /s/ R. Xxxxx Xxxxxxxxx
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Name: R. Xxxxx Xxxxxxxxx
Title: President
Address: 0000 X.X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
WILSHIRE MORTGAGE FUNDING COMPANY
IV, INC.
By /s/ Xxxxxxxx Xxxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxxx
Title: President
Address: 0000 X.X. Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
[Signature Page to the Loan Sale Agreement]
