EXHIBIT 10.1
OWNERSHIP TRANSFER AGREEMENT
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This OWNERSHIP TRANSFER AGREEMENT (this "Agreement"), dated as of
September 29, 1998, is made between Wilshire REIT 1998-1, Inc. as transferor
(the "Transferor") and Salomon Brothers Mortgage Securities VII, Inc. as
transferee (the "Depositor").
W I T N E S S E T H :
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WHEREAS, pursuant to the terms of the Mortgage Loan Purchase
Agreement, the Seller will transfer the Mortgage Loans to the Transferor on the
Closing Date;
WHEREAS, pursuant to the terms of this Ownership Transfer Agreement,
the Transferor will transfer the Mortgage Loans and all of its rights under the
Mortgage Loan Purchase Agreement to the Depositor, as agent of the Transferor,
on the Closing Date;
WHEREAS, the Depositor, as agent of the Transferor, will transfer the
Mortgage Loans and transfer all of its rights under this Ownership Transfer
Agreement and the Mortgage Loan Purchase Agreement to the Issuer on the Closing
Date;
WHEREAS, pursuant to the terms of the Owner Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Transferor, the
Equity Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
and transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of the Servicing Agreements, the Master
Servicer and the Servicers will service the related Mortgage Loans directly or
through one or more Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the definitions
contained in Appendix A to the Indenture, dated as of September 1, 1998 (the
"Indenture"), between the Issuer and Norwest Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"), which Definitions
are incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
2. AGENCY
The Transferor hereby appoints the Depositor, and the Depositor hereby
accepts the appointment, as agent of the Transferor for purposes of (i) taking
ownership of the Mortgage Loans pursuant to this Agreement solely for purposes
of transferring such Mortgage Loans to the Issuer; (ii) creating the Issuer and
transferring the Mortgage Loans to the Issuer pursuant to the Owner Trust
Agreement; (iii) receiving the Equity Certificates issued by the Issuer and
delivering such Equity Certificates to the Transferor; (iv) selling the Notes
under the Depositor's shelf registration statement and (v) otherwise
facilitating the transactions contemplated by this Agreement. As agent of the
Transferor, the Depositor shall not be entitled to the economic benefits
associated with the ownership of the Mortgage Loans or the Equity Certificates
and will not be subject to the economic burdens associated with such ownership.
3. WARRANTIES
The Transferor warrants and represents that attached hereto as Exhibit
2 is a true, accurate and complete copy of the Mortgage Loan Purchase Agreement
with respect to the Mortgage Loans, which Mortgage Loan Purchase Agreement is in
full force and effect as of the date hereof and will be in full force and effect
as of the Closing Date and has not been nor will be amended or modified in any
respect nor has any notice of termination been given or will be given thereunder
as of the date hereof and as of the Closing Date.
4. TRANSFER OF MORTGAGE LOANS TO DEPOSITOR FOR TRANSFER TO THE ISSUER
The Transferor, by the execution and delivery of this Agreement, for
purposes of transferring the Mortgage Loans to the Issuer, does hereby assign,
set over, and otherwise convey to the Depositor, as agent of the Transferor,
without recourse but subject to the terms of this Agreement, all of its legal
right, title and interest in, to and under the Mortgage Loans listed on the
Mortgage Loan Schedule attached hereto as Exhibit 1, whether now existing or
hereafter acquired and wherever located, on the Closing Date and as of the
Cut-off Date, the proceeds thereof and all rights under the Related Documents
(including the related Mortgage Files).
In addition, the Transferor hereby assigns to the Depositor, as agent
of the Transferor, all of its legal right, title, and interest in, to, and under
the Mortgage Loan Purchase Agreement to the extent of the Mortgage Loans, and
the Depositor hereby assumes all of the Transferor's obligations under the
Mortgage Loan Purchase Agreement with respect to the Mortgage Loans from and
after the date hereof, and the Transferor shall be relieved and released of all
of its obligations under the Mortgage Loan Purchase Agreement to the extent of
the Mortgage Loans from and after the date hereof.
The parties hereto intend that the transactions set forth herein
constitute a sale by the Transferor to the Depositor in an amount equal to the
net sale proceeds of the Notes and as a contribution of the balance of the
assets to the capital of the Depositor by the Transferor,
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on the Closing Date of all the Transferor's legal right, title and interest in
and to the Mortgage Loans, and other property as and to the extent described
above. In addition, the Transferor hereby grants to the Depositor as of the
Closing Date a security interest in all of the Transferor's legal right, title
and interest in, to and under the Mortgage Loans, and such other property, to
secure all of the Transferor's obligations hereunder, and this Agreement shall
constitute a security agreement under applicable law, and in such event, the
parties hereto acknowledge that the Indenture Trustee, in addition to holding
the Mortgage Loans for the benefit of the Noteholders, holds the Mortgage Loans
as designee of the Depositor. The Transferor agrees to take or cause to be taken
such actions and to execute such documents, including without limitation the
filing of all necessary UCC-1 financing statements filed in the States of
Delaware, New York and Oregon (which shall be submitted for filing as of the
Closing Date), any continuation statements with respect thereto and any
amendments thereto required to reflect a change in the name or corporate
structure of the Transferor or the filing of any additional UCC-1 financing
statements due to the change in the principal office of the Transferor, as are
necessary to perfect and protect the interests of the Depositor and its
assignees in each Mortgage Loan and the proceeds thereof.
5. PURCHASE PRICE
The "Purchase Price" for the Mortgage Loans transferred to the
Depositor for transfer to the Issuer shall be (i) payment in immediately
available funds an amount equal to the net sale proceeds of the Notes and (ii)
the Equity Certificates representing a 100% Certificate Percentage Interest in
the Issuer.
6. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF AGREEMENT
This Agreement shall bind and inure to the benefit of and be
enforceable by the Transferor, the Depositor, the Issuer and their respective
successors and assigns, the Indenture Trustee. The obligations of the Transferor
under this Agreement cannot be assigned or delegated to a third party without
the consent of the Depositor and the Issuer, which consent shall be at the
Depositor's and the Issuer's sole discretion. The parties hereto acknowledge
that the Depositor, as agent of the Transferor, is acquiring the Mortgage Loans
solely for the purpose of selling them and assigning all of its rights under
this Agreement and under the Mortgage Loan Purchase Agreement to the Issuer, who
will in turn pledge the Mortgage Loans and assign all of its rights under this
Agreement and the Mortgage Loan Purchase Agreement to the Indenture Trustee for
the benefit of the Noteholders. As an inducement to the Depositor to acquire the
Mortgage Loans, the Transferor acknowledges and consents to (i) the assignment
by the Depositor to the Issuer of such rights and to the enforcement or exercise
of any right or remedy against the Transferor pursuant to this Agreement and the
Mortgage Loan Purchase Agreement as assigned by the Depositor and (ii) the
assignment by the Issuer to the Indenture Trustee for the benefit of the
Noteholders of such rights and to the enforcement or exercise of any right or
remedy against the Transferor pursuant to this Agreement. Such enforcement of a
right or remedy by the Issuer, the Owner Trustee or the Indenture Trustee, as
applicable, shall have the same force and effect as if the right or remedy had
been enforced or exercised by the
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Depositor directly. The Indenture Trustee is an express third-party beneficiary
to this Agreement.
7. GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
WILSHIRE REIT 1998-1, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxxx
Title: President
SALOMON BROTHERS
MORTGAGE SECURITIES VII, INC.
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
EXHIBIT 1
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MORTGAGE LOAN SCHEDULE
[AVAILABLE UPON REQUEST]
EXHIBIT 2
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WILSHIRE REIT 1998-1, INC.
as Purchaser,
WILSHIRE REAL ESTATE INVESTMENT TRUST INC.
as Seller,
and
WILSHIRE REIT TRUST SERIES 1998-1
as Issuer
______________________________
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of September 29, 1998
______________________________
Fixed and Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions..................................................2
ARTICLE II
TRANSFER OF MORTGAGE LOANS AND RELATED PROVISIONS
Section 2.1. Agreement to Transfer........................................2
Section 2.2. Mortgage Loan Schedule.......................................3
Section 2.3. Consideration................................................3
Section 2.4. Transfer of the Mortgage Files...............................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties........................7
Section 3.2. Repurchase Obligation for Defective Documentation and
for Breach of Representation and Warranty....................8
Section 3.3 Purchaser Representations and Warranties.....................9
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller.....................................10
Section 4.2. Payment of Expenses.........................................11
ARTICLE V
CONDITIONS TO MORTGAGE LOAN TRANSFER
Section 5.1. Conditions of Purchaser's Obligations.......................12
ARTICLE VI
LIMITATION ON LIABILITY OF THE SELLER
Section 6.1. Limitation on Liability of the Seller.......................12
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ARTICLE VII
TERMINATION
Section 7.1. Termination.................................................13
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment...................................................14
Section 8.2. Governing Law...............................................14
Section 8.3. Notices.....................................................15
Section 8.4. Severability of Provisions..................................15
Section 8.5. Relationship of Parties.....................................15
Section 8.6. Counterparts................................................16
Section 8.7. Further Agreements..........................................16
Section 8.8. Intention of the Parties....................................16
Section 8.9. Successors And Assigns; Assignment of Purchase Agreement....16
Section 8.10. Survival....................................................17
Section 8.11. No Recourse to Owner Trustee................................17
Exhibits
Exhibit 1 Mortgage Loan Schedule for Mortgage Loans
Exhibit 2 Representations and Warranties regarding the Mortgage Loans
Exhibit 3 Schedule of Mortgage Loans from Series 1997-LB1 and Series 1996-LB3
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This MORTGAGE LOAN PURCHASE AGREEMENT (this "Agreement"), dated as of
September 29, 1998, is made among Wilshire Real Estate Investment Trust Inc.
(the "Seller"), Wilshire REIT 1998-1, Inc. (the "Purchaser") and Wilshire REIT
Trust Series 1998-1 (the "Issuer").
W I T N E S S E T H :
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WHEREAS, the Seller owns the Mortgage Loans indicated on the Mortgage
Loan Schedule attached as Exhibit 1 hereto (the "Mortgage Loans"), including
rights to (a) any property acquired by foreclosure or deed in lieu of
foreclosure or otherwise, and (b) the proceeds of any insurance policies
covering the Mortgage Loans;
WHEREAS, pursuant to the terms of this Agreement the parties hereto
desire that the Seller transfer the Mortgage Loans to the Purchaser on the
Closing Date, and that the Seller make certain representations and warranties on
the Closing Date;
WHEREAS, pursuant to the terms of the Ownership Transfer Agreement,
the Purchaser will transfer the Mortgage Loans and transfer all of its rights
under this Mortgage Loan Purchase Agreement to the Depositor on the Closing
Date;
WHEREAS, the Depositor will transfer the Mortgage Loans and transfer
all of its rights under the Ownership Transfer Agreement and this Mortgage Loan
Purchase Agreement to the Issuer on the Closing Date;
WHEREAS, pursuant to the terms of the Owner Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Depositor the
Equity Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
and transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of the Servicing Agreements, the Master
Servicer and the Servicers will service the related Mortgage Loans directly or
through one or more Sub-Servicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. For all purposes of this Mortgage Loan
Purchase Agreement, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the Definitions contained in
Appendix A to the Indenture dated as of September 1, 1998 between the Issuer and
the Indenture Trustee, which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
ARTICLE II
TRANSFER OF MORTGAGE LOANS AND RELATED PROVISIONS
Section 2.1. AGREEMENT TO TRANSFER.
The Seller agrees to transfer and the Purchaser agrees to accept the
transfer, on or before September 30, 1998 (the "Closing Date"), certain
fixed-rate and adjustable-rate conventional residential mortgage loans (the
"Mortgage Loans"), having an aggregate principal balance as of the close of
business on September 1, 1998 (the "Cut-off Date") of approximately $380,853,964
(the "Closing Balance"), after giving effect to all payments due on the Mortgage
Loans on or before the Cut-off Date, whether or not received.
The parties hereto intend that the transactions set forth herein
constitute a sale by the Seller to the Purchaser in an amount equal to the net
sale proceeds of the Notes and as a contribution of the balance of the assets to
the capital of the Purchaser by the Seller. The Seller hereby conveys on the
Closing Date of all the Seller's right, title and interest in and to the
Mortgage Loans and other property as and to the extent described above. In the
event the transactions set forth herein be deemed a pledge of such Mortgage
Loans, the Seller hereby grants to the Purchaser as of the Closing Date a
security interest in all of the Seller's right, title and interest in, to and
under the Mortgage Loans and such other property, to secure all of the Seller's
obligations hereunder, and this Agreement shall constitute a security agreement
under applicable law and in such event, the parties hereto acknowledge that the
Indenture Trustee, in addition to holding the Mortgage Loans for the benefit of
the Noteholders, holds the Mortgage Loans as designee of the Purchaser. The
Seller agrees to take or cause to be taken such actions and to execute such
documents, including without limitation the filing of all necessary UCC-1
financing statements filed in the States of Delaware, New York and Oregon (which
shall have been submitted for filing as of the Closing Date, as applicable), any
continuation statements with respect thereto and any amendments thereto required
to reflect a change in the name or
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corporate structure of the Seller or the filing of any additional UCC-1
financing statements due to the change in the principal office of the Seller, as
are necessary to perfect and protect the interests of the Purchaser and its
assignees in each Mortgage Loan and the proceeds thereof.
Section 2.2. MORTGAGE LOAN SCHEDULE.
The Purchaser and the Seller have agreed that the Mortgage Loans
listed on Exhibit 1 hereto (the "Mortgage Loan Schedule") are to be transferred
to the Purchaser pursuant to this Agreement.
Section 2.3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be transferred
hereunder, the Purchaser shall pay to or upon the order of the Seller: (i) in
immediately available funds an amount equal to the net sale proceeds of the
Notes and (ii) 100% of the shares of the stock of the Purchaser.
(b) The Purchaser or any assignee, transferee or designee of the
Purchaser shall be entitled to all scheduled payments of principal due after the
Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller. Notwithstanding the above, the Purchaser or any
assignee, transferee or designee of the Purchaser shall be entitled to all
scheduled payments of principal and interest due on or before the Cut-off Date
and collected after the Cut-off Date with respect to any Mortgage Loan listed on
Exhibit 3 attached hereto.
Section 2.4. TRANSFER OF THE MORTGAGE FILES.
(a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse but
subject to the terms of this Agreement, all of its right, title and interest in,
to and under the Mortgage Loans. The contents of each Mortgage File not
delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser. Upon the transfer of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.
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(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller will, on or prior
to the Closing Date, deliver or cause to be delivered to the Purchaser or any
assignee, transferee or designee of the Purchaser each of the following
documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in one of the following
forms: (i) "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee, without recourse," (ii) "Pay to the order of
Norwest Bank Minnesota, National Association, as Trustee for the registered
holders of Salomon Brothers Mortgage Securities VII, Inc., Series 1996-LB3,
without recourse" or (iii) "Pay to the order of Norwest Bank Minnesota,
National Association, as Trustee for the registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Series 1997-LB1, without recourse,
in each case with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so endorsing in the
form as provided above;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon;
(iii) an original Assignment of the Mortgage executed in one of the
following forms: (i) "Norwest Bank Minnesota, National Association, as
Trustee", (ii) "Norwest Bank Minnesota, National Association, as Trustee
for the registered holders of Salomon Brothers Mortgage Securities VII,
Inc., Series 1996-LB3" or (iii) "Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., Series 1997-LB1";
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together with all
endorsements or riders which were issued with or subsequent to the issuance
of such policy, insuring the priority of the Mortgage as a first lien on
the Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is unavailable, a
written commitment or uniform binder or preliminary report of title issued
by the title insurance company or escrow company.
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The Seller, at its own expense, shall promptly (and in no event later
than five Business Days following the later of the Closing Date and the date of
receipt by the Seller of the recording information for a Mortgage) submit or
cause to be submitted for recording, at no expense to the Trust Estate, the
Indenture Trustee or the Owner Trustee, in the appropriate public office for
real property records, each Assignment referred to in Sections 2.4(b)(iii) and
(b)(iv) above. In the event that such Assignment is lost or returned unrecorded
because of a defect therein, the Seller shall promptly prepare or cause to be
prepared a substitute assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding anything to the contrary contained in this Section
2.4, if any document referred to in Section 2.4(b)(ii), 2.4(b)(iii) or
2.4(b)(iv) above has been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller hereunder shall be deemed to have been satisfied upon
(1) delivery by or on behalf of the Seller promptly upon receipt thereof to or
on behalf of the Purchaser or any assignee, transferee or designee of the
Purchaser of either the original or a copy of such document certified by the
Seller in the case of (x) above or the public recording office in the case of
(y) above to be a true and complete copy of the recorded original thereof and
(2) if such copy is certified by the Seller delivery promptly upon receipt
thereof of either the original or a copy of such document certified by the
public recording office to be a true and complete copy of the original.
In the event that the original lender's title insurance policy has not
been delivered pursuant to Section 4.2(b)(vi) above, the Seller shall deliver or
cause to be delivered to the Purchaser or any assignee, transferee or designee
of the Purchaser, promptly after receipt thereof, the original lender's title
insurance policy.
Each original document relating to a Mortgage Loan which is not
delivered to the Purchaser or its assignee, transferee or designee, if held by
the Seller, shall be so held for the benefit of the Purchaser or its assignee,
transferee or designee.
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered pursuant to
Section 2.4(b) hereof shall be reviewed by the Purchaser or any assignee,
transferee or designee of the Purchaser at any time before or after the Closing
Date (and with respect to each document permitted to be delivered after the
Closing Date within seven days of its delivery) to ascertain that all required
documents have been executed and received and that such documents relate to the
Mortgage Loans identified on the Mortgage Loan Schedule.
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(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, to the Depositor,
the Issuer and the Indenture Trustee, as may be required to effect the purposes
of the Ownership Transfer Agreement, the Owner Trust Agreement and the
Indenture, without the consent of the Seller, and the assignee shall succeed to
the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser, the Depositor, the Issuer or the
Indenture Trustee in connection with enforcing any obligations of the Seller
under this Agreement will be promptly reimbursed by the Seller.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date, the
Seller shall either (i) deliver in escrow to the Purchaser or to any assignee,
transferee or designee of the Purchaser, for examination, the Mortgage File
pertaining to each Mortgage Loan, or (ii) make such Mortgage Files available to
the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination. Such examination may be made by the Purchaser or the Indenture
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Mortgage Loan Schedule. The Purchaser may, at its option and
without notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Indenture or related Servicing
Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. SELLER REPRESENTATIONS AND WARRANTIES. The Seller hereby
represents and warrants to the Purchaser and the Issuer as of the date hereof,
as of the Closing Date (or if otherwise specified below, as of the date so
specified):
(a) As to the Seller:
(i) The Seller (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and (ii) is
qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not have a material adverse effect on the
Seller's ability to enter into this Agreement and to consummate the
transactions contemplated hereby and thereby;
(ii) The Seller has the power and authority to make, execute, deliver
and perform its obligations under this Agreement and all of the
transactions contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of
this Agreement;
(iii) The Seller is not required to obtain the consent of any other
Person or any consent, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, approvals or
authorization, or registration or declaration, as shall have been obtained
or filed, as the case may be;
(iv) The execution and delivery of this Agreement and the performance
of the transactions contemplated hereby by the Seller will not violate any
provision of any existing law or regulation or any order or decree of any
court applicable to the Seller or any provision of the certificate of
incorporation or bylaws of the Seller, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Seller is
a party or by which the Seller may be bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of
the Seller threatened, against the Seller or any of its properties or with
respect to this Agreement, the Notes or the Equity Certificates which in
the opinion of the Seller has a reasonable
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likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement;
(vi) This Agreement constitutes the legal, valid and binding
obligations of the Seller, enforceable against the Seller in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(vii) This Agreement constitutes a valid transfer and assignment to
the Purchaser of all right, title and interest of the Seller in and to the
principal balance of the Mortgage Loans as of the Cut-off Date, all monies
due or to become due with respect thereto, and all proceeds of such
principal balance of the Mortgage Loans;
(viii) The Seller is not in default with respect to any order or
decree of any court or any order or regulation of any federal, state or
governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Seller or its properties or might have consequences that
would materially adversely affect its performance hereunder; and
(ix) The Master Servicer, any Servicer or any Subservicer who will be
servicing any Mortgage Loan pursuant to the related Servicing Agreements or
Subservicing Agreements is qualified to do business in all jurisdictions in
which its activities as the Master Servicer, such Servicer or such
Subservicer of the Mortgage Loans serviced by it require such
qualifications except where failure to be so qualified will not have a
material adverse effect on such servicing activities.
(b) As to each Mortgage Loan as of the Closing Date, the information set
forth in Exhibit 2 is true and correct in all material respects as of the
Closing Date.
Section3.2. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION AND FOR
BREACH OF REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 3.1 shall
not be impaired by any review and examination of loan files or other documents
evidencing or relating to the Mortgage Loans or any failure on the part of the
Purchaser to review or examine such documents and shall inure to the benefit of
any assignee, transferee or designee of the Purchaser, including the Indenture
Trustee for the benefit of Noteholders evidencing an interest in all or a
portion of the Mortgage Loans. With respect to the representations and
warranties contained herein which are made to the knowledge or the best of
knowledge of the
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Seller, or as to which the Seller has no knowledge, if it is discovered that the
substance of any such representation and warranty was inaccurate as of the date
such representation and warranty was made or deemed to be made, and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interest therein of the Purchaser or the Purchaser's assignee,
transferee or designee, then notwithstanding the lack of knowledge by the Seller
with respect to the substance of such representation and warranty being
inaccurate at the time the representation and warranty was made, the Seller
shall take such action described in the following paragraph in respect of such
Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report), as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 3.1
that materially and adversely affects the value of any Mortgage Loan, the
Purchaser or the Purchaser's assignee, transferee or designee, the party
discovering the breach shall give prompt written notice to the others. Within
ninety (90) days of its discovery or its receipt of notice of any such missing
documentation which was not transferred to the Seller as described above or
materially defective documentation or any such breach of a representation and
warranty the Seller promptly shall deliver such missing document or cure such
defect or breach in all material respects, or in the event the Seller cannot
deliver such missing document or such defect or breach cannot be cured, the
shall, within 90 days of its discovery or receipt of notice, either (i)
repurchase the affected Mortgage Loan at a price equal to the Purchase Price (as
such term is defined in the Indenture) or (ii) in accordance with the provisions
of the related Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Estate and substitute one or more Qualified Substitute Mortgage Loans.
The Seller shall amend the Mortgage Loan Schedule to reflect the withdrawal of
such Mortgage Loan from the terms of this Agreement and the related Servicing
Agreement and the Indenture and the addition, if any, of a Qualified Substitute
Mortgage Loan. The Seller shall deliver to the Purchaser such amended Mortgage
Loan Schedule and shall deliver such other documents as are required by this
Agreement or the related Servicing Agreement and Indenture within five (5) days
of any such amendment. Any repurchase pursuant to this Section 3.2(a) shall be
accomplished by deposit in the related Collection Account of the amount of the
Purchase Price in accordance with Section 2.01 of the related Servicing
Agreement. Any repurchase or substitution required by this Section shall be made
in a manner consistent with Section 2.01 of the related Servicing Agreement.
(b) It is understood and agreed that the obligations of the Seller set
forth in this Section 3.2 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser against the Seller
respecting a missing or defective document or a breach of the representations
and warranties.
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Section 3.3 PURCHASER REPRESENTATIONS AND WARRANTIES. The Purchaser hereby
represents and warrants to the Seller as of the date hereof and as of the
Closing Date that:
(a) The Purchaser is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
(b) The Purchaser is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its property
or the conduct of its business shall require such qualifications and in which
the failure to so qualify would have a material adverse effect on the business,
properties, assets or condition (financial or other) of the Purchaser and the
ability of the Purchaser to perform under this Agreement.
(c) The Purchaser has the power and authority to execute and deliver
this Agreement and to carry out its terms; the Purchaser has full power and
authority to purchase the property to be purchased from the Seller and the
Purchaser has duly authorized such purchase by all necessary corporate action;
and the execution, delivery and performance of this Agreement have been duly
authorized by the Purchaser by all necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of incorporation
or bylaws of the Purchaser, or any indenture, agreement or other instrument to
which the Purchaser is a party or by which it is bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than pursuant
to the Basic Documents); nor violate any law or, to the best of the Purchaser's
knowledge, any order, rule or regulation applicable to the Purchaser of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or its
properties.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. COVENANTS OF THE SELLER.
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(a) The Seller hereby covenants as of the date hereof and as of the
Closing Date that, except for the transfer hereunder, on and after the Closing
Date, the Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur or assume any Lien on, any Mortgage Loan, whether now
existing or hereafter created, or any interest therein; the Seller will notify
the Issuer, on its own behalf and as assignee of the Purchaser and the Indenture
Trustee of the existence of any such Lien on any Mortgage Loan immediately upon
discovery thereof; and the Seller will defend the right, title and interest of
the Issuer, on its own behalf and as assignee of the Purchaser, in, to and under
the Mortgage Loans, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Seller.
In the event that the Indenture Trustee receives actual notice of any
transfer taxes arising out of the transfer, assignment and conveyance of the
Mortgage Loans, on written demand by the Indenture Trustee, or upon the Seller's
otherwise being given notice thereof by the Indenture Trustee, the Seller shall
pay any and all such transfer taxes (it being understood that the Holders of the
Notes, the Indenture Trustee shall have no obligation to pay such transfer
taxes).
(b) The Seller hereby covenants to qualify and remain qualified as a
real estate investment trust ("REIT") under Section 856 of the Code and to cause
any subsidiary owning interests in the Issuer to be a "qualified REIT
subsidiary" (as defined in Section 856(i) of the Code).
Section 4.2. PAYMENT OF EXPENSES.
(a) The Seller will pay on the Closing Date all expenses incident to
the performance of its obligations under this Agreement and the Underwriting
Agreement, including (i) the preparation, printing and any filing of the
preliminary prospectus, Prospectus Supplement and Prospectus (including any
schedules or exhibits and any document incorporated therein by reference)
originally filed and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Underwriter of this Agreement and the
Underwriting Agreement, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Notes, (iii) the preparation, issuance and delivery of the certificates for the
Notes to the Underwriter, including any charges of DTC in connection therewith;
(iv) the fees and disbursements of the Depositor's accountants and other
advisors in connection with the filing of the preliminary prospectus, the
Prospectus Supplement and Prospectus, (v) the qualification of the Notes under
securities laws in accordance with the provisions of the Underwriting Agreement,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto for delivery to potential
investors, (vi) in addition to the initial printing and filing costs under (i)
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above, the printing and delivery to the Underwriter of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto for delivery to potential investors, (vi) the expenses of the Indenture
Trustee and Owner Trustee, including the fees and disbursements of counsel for
the Indenture Trustee and Owner Trustee in connection with the Indenture, the
Owner Trust Agreement and the Notes and (vii) any fees payable in connection
with the rating of the Notes.
(b) If the Underwriting Agreement is terminated by the Underwriter in
accordance with the provisions thereof, the Seller shall reimburse the
Underwriter for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriter.
ARTICLE V
CONDITIONS TO MORTGAGE LOAN TRANSFER
Section 5.1. CONDITIONS OF PURCHASER'S OBLIGATIONS. The Purchaser's
obligation to purchase the Mortgage Loans which it accepts for purchase
hereunder shall be subject to each of the following conditions:
(i) the Mortgage File for each Mortgage Loan shall have
been delivered in accordance with this Agreement and
the Owner Trust Agreement;
(ii) the representations and warranties set forth in Section
3.1(b) hereof with respect to each Mortgage Loan shall
be true as of the Closing Date;
(iii)The Underwriter or its affiliates shall have had an
opportunity to perform a due diligence review of each
Mortgage Loan; and
(iv) The Seller shall have provided to the Underwriter or
its affiliates such other documents which are then
required to have been delivered under this Agreement or
which are reasonably requested by the Underwriter or
its affiliates, which other documents may include UCC
financing statements, a favorable opinion or opinions
of counsel with respect to matters which are reasonably
requested by the Underwriter, and/or an Officers'
Certificate.
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ARTICLE VI
LIMITATION ON LIABILITY OF THE SELLER
Section 6.1. LIMITATION ON LIABILITY OF THE SELLER. None of the
directors, officers, employees or agents of the Seller shall be under any
liability to the Purchaser, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement. Except as and to the extent
expressly provided in the Basic Documents, the Seller shall not be under any
liability to the Issuer, the Owner Trust, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders. The Seller and any director,
officer, employee or agent of the Seller may rely in good faith on any document
of any kind PRIMA FACIE properly executed and submitted by any Person respecting
any matters arising hereunder.
ARTICLE VII
TERMINATION
Section 7.1. TERMINATION.
(a) Except as provided in Section 7.1(b) hereof, the respective
obligations and responsibilities of the Seller, the Purchaser and the Issuer
created hereby shall terminate, except for the Seller's indemnity obligations as
provided herein, upon the termination of the Issuer pursuant to the terms of the
Owner Trust Agreement.
(b) The Purchaser may terminate this Agreement, by notice to the
Seller, at any time at or prior to the Closing Date:
(i) if the Underwriting Agreement is terminated by the Underwriter
pursuant to the terms of the Underwriting Agreement or if there has been,
since the time of execution of this Agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse
change in the financial condition, earnings, business affairs or business
prospects of the Seller, whether or not arising in the ordinary course of
business, or
(ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Underwriter, impracticable to market
the Notes or to enforce contracts for the sale of the Notes, or
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(iii) if trading in any securities of the Seller has been suspended or
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or
in the NASDAQ National Market System has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority,
(iv) if a banking moratorium has been declared by either Federal or
New York authorities,
(v) either (A) a change in control of the Seller shall have occurred
other than in connection with and as a result of the issuance and sale by
the Seller or registered, publicly offered common stock; or (B) the
Underwriter determines in its sole discretion that any material adverse
change has occurred in the management of the Seller,
(vi) there is (A) a material breach by the Seller of any
representation and warranty contained in this Agreement or the Underwriting
Agreement other than a representation or warranty relating to particular
Mortgage Loans, and the Underwriter has reason to believe in good faith
either that such breach is not curable within two (2) days or that such
breach may not have been cured in all material respects at the expiration
of two (2) days following discovery thereof by the Seller OR (B) a failure
by the Seller to make any payment payable by it under this Agreement OR (C)
any other failure by the Seller to observe and perform in any material
respect its material covenants, agreements and obligations with the
Purchaser, including without limitation those contained in this Agreement,
and the Purchaser has reason to believe in good faith that such failure may
not have been cured in all material respects at the expiration of two (2)
days following discovery thereof by the Seller, or
(vii) the Seller fails to provide written notification to the
Underwriter of any change in its loan origination, acquisition or appraisal
guidelines or practices, or the Seller, without the prior consent of the
Underwriter (which shall not be unreasonably withheld), amends in any
material respect its loan origination, acquisition or appraisal guidelines
or practices.
If this Agreement is terminated pursuant to this Section 7.1(b), such
termination shall be without liability of any party to any other party except as
provided in Section 4.2 hereof.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. AMENDMENT. This Agreement may be amended from time to
time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.
Section 8.2. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 8.3. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
(i) if to the Seller:
Wilshire Real Estate Investment Trust Inc.
0000 Xxxxx Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxx
or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
(ii) if to the Purchaser:
Wilshire REIT 1998-1, Inc.
0000 Xxxxx Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxx
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
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(iii) if to the Issuer:
Wilshire REIT Trust Series 1998-1
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
or such other address as may hereafter be furnished to the Seller in writing by
the Issuer.
Section 8.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 8.5. RELATIONSHIP OF PARTIES. Nothing herein contained shall
be deemed or construed to create a partnership or joint venture between the
parties hereto, and the services of the Seller shall be rendered as an
independent contractor and not as agent for the Purchaser.
Section 8.6. COUNTERPARTS. This Agreement may be executed in two or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts together shall constitute one and the same agreement.
Section 8.7. FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement. Each of the Purchaser and the Seller agrees to use its best
reasonable efforts to take all actions necessary to be taken by it to cause the
Notes to be issued and rated in the highest rating category by each of the
Rating Agencies, and each party will cooperate with the other in connection
therewith.
Section 8.8. INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing on the Closing Date, and the Seller is
selling on the Closing Date, the Mortgage Loans, rather than the Purchaser
providing to the Seller a loan secured by the Mortgage Loans on the Closing
Date. Accordingly, the parties hereto each intend to treat this transaction as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans on
the Closing Date. The Purchaser and the Issuer will have the right to review the
Mortgage Loans and the Related Documents to determine the characteristics of the
Mortgage Loans
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which will affect the federal income tax consequences of owning the Mortgage
Loans and the Seller will cooperate with all reasonable requests made by the
Purchaser and/or the Issuer in the course of such review.
Section 8.9. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Issuer and their respective successors and assigns.
The obligations of the Seller under this Agreement cannot be assigned or
delegated to a third party without the consent of the Purchaser, which consent
shall be at the Purchaser's sole discretion. The parties hereto acknowledge that
the Purchaser is acquiring the Mortgage Loans for the purpose of selling them to
the Depositor, who will in turn sell them to the Issuer, who will in turn pledge
the Mortgage Loans to the Indenture Trustee for the benefit of the Noteholders.
As an inducement to the Purchaser and the Issuer to purchase the Mortgage Loans,
the Seller acknowledges and consents to (i) the assignment by the Purchaser to
the Depositor of all of the Purchaser's rights against the Seller pursuant to
this Agreement and to the enforcement or exercise of any right or remedy against
the Seller pursuant to this Agreement by the Purchaser, the Depositor and the
Issuer, (ii) the assignment by the Depositor to the Issuer of all of the
Depositor's rights against the Seller pursuant to this Agreement and the
Ownership Transfer Agreement and to the enforcement or exercise of any right or
remedy against the Seller pursuant to this Agreement and the Ownership Transfer
Agreement and (iii) the assignment by the Issuer to the Indenture Trustee of
such rights and to the enforcement or exercise of any right or remedy against
the Seller pursuant to this Agreement and the Ownership Transfer Agreement. Such
enforcement of a right or remedy by the Depositor, the Issuer, the Owner Trustee
or the Indenture Trustee, as applicable, shall have the same force and effect as
if the right or remedy had been enforced or exercised by the Purchaser or the
Issuer directly.
Section 8.10. SURVIVAL. The representations and warranties made herein
by the Seller and the provisions of Article V hereof shall survive the purchase
of the Mortgage Loans hereunder.
Section 8.11. NO RECOURSE TO OWNER TRUSTEE. It is expressly understood
and agreed by and between the parties hereto (i) that this Agreement is executed
and delivered by the Owner Trustee, not in its individual capacity but solely as
Owner Trustee under the Owner Trust Agreement in the exercise of the power and
authority conferred and vested in it as such Owner Trustee, (ii) each of the
representations, undertakings and agreements made herein by the Issuer are not
personal representations, undertakings and agreements of the Owner Trustee but
are binding only on the Issuer created pursuant to the Owner Trust Agreement,
(iii) nothing contained herein shall be construed as creating any liability on
the Owner Trustee, individually or personally, to perform any covenant of the
Issuer either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any person claiming by,
through or under any such party and (iv) under no circumstances shall
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the Owner Trustee be personally liable for the payment of any indebtedness or
expense of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant make or undertaken by the Issuer under this
Agreement.
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IN WITNESS WHEREOF, the Seller, the Purchaser and the Issuer have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year first
above written.
WILSHIRE REIT 1998-1, INC.
as Purchaser
By: /s/ Xxxxxxxx Xxxxxxxxxx
------------------------------------
Name: /s/ Xxxxxxxx Xxxxxxxxxx
Title: President
WILSHIRE REAL ESTATE INVESTMENT
TRUST INC.
as Seller
By: /s/ Xxxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: President
WILSHIRE REIT TRUST SERIES 1998-1
as Issuer
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely in its
capacity as Owner Trustee
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Authorized Signatory
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EXHIBIT 1
MORTGAGE LOAN SCHEDULE
[AVAILABLE UPON REQUEST]
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EXHIBIT 2
Representations and Warranties with respect to the Mortgage Loans
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EXHIBIT 3
SCHEDULE OF MORTGAGE LOANS FROM SERIES 1997-LB1 AND SERIES 1996-LB3
[AVAILABLE UPON REQUEST]
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