Common use of Ability to Perform; Solvency Clause in Contracts

Ability to Perform; Solvency. The Responsible Party does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Responsible Party is solvent and the sale of the Mortgage Loans will not cause the Responsible Party to become insolvent. The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of Responsible Party's creditors. SCHEDULE V Morgan Stanley ABS Capital I Inc. Mortgage Pass-Xxxxxxh Xxxxxxicates Series 2006-WMC1 Representations and Warranties of Morgan Stanley ABS Capital I Inc. as to the Mortgage Xxxxx The Depositor hereby makes with respect the Mortgage Loans the following representations and warranties to the Trustee, as of the Closing Date: (1) Immediately prior to the transfer of the Mortgage Loans by the Depositor to the Trust on the Closing Date, the Depositor had good title to the Mortgage Loans, free and clear of any liens, charges, claims or encumbrances whatsoever; (2) The original loan balance of each Group I Mortgage Loan was within Freddie Mac's and Fannie Mae's dollar amount limits for conforming one- xx xxxr-family moxxxxxx loans; and (3) No Group I Mortgage Loan has a Prepayment Charge period in excess of three years. EXHIBIT A [To be added to any Class A-1 Certificate while it remains a Private Certificate: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE. In the event that a transfer of a Private Certificate which is a Book-Entry Certificate is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer will be deemed to have made as of the transfer date each of the certifications set forth in the Transferor Certificate in respect of such Certificate and the transferee will be deemed to have made as of the transfer date each of the certifications set forth in the Rule 144A Letter in respect of such Certificate, in each case as if such Certificate were evidenced by a Physical Certificate.] Unless this Certificate is presented by an authorized representative of the Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER ASSETS. AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-8, PTCE 95-60 OR PTCE 96-23 OR A COMPARABLE EXEMPTIOX XXXXXXXXX XXXXX XXXXXXX LAW. Certificate No. : A-1-[ ] A-2a-[ ] A-2b-[ ] A-2c-[ ] M-1-[ ] M-2-[ ] M-3-[ ] M-4-[ ] M-5-[ ] M-6-[ ] B-1-[ ] B-2-[ ] B-3-[ ] Cut-off Date : January 1, 2006 First Distribution Date : February 27, 2006 Initial Certificate Balance of this Certificate ("Denomination") : $[ ] Initial Certificate Balances [A-1] $284,575,000 of all Certificates of this : [A-2a] $376,590,000 Class [A-2b] $124,930,000 [A-2c] $91,611,000 [M-1] $43,428,000 [M-2] $39,428,000 [M-3] $29,143,000 [M-4] $19,428,000 [M-5] $19,428,000 [M-6] $17,143,000 [B-1] $18,286,000 [B-2] $14,285,000 [B-3] $13,714,000 CUSIP : [Class A-1][61744C XJ 0] [Class A-2a][61744C XK 7] [Class A-2b][61744C XL 5] [Class A-2c][61744C WM 3] [Class M-1][61744C WN 1] [Class M-2][61744C WP 6] [Class M-3][61744C XQ 4] [Class M-4][61744C XR 2] [Class M-5][61744C XS 0] [Class M-6][61744C XT 8] [Class B-1][61744C XU 5] [Class B-2][61744C XV 3] [Class B-3][61744C XW 1] : ISIN [Class A-1][US61744CXJ07] [Class A-2a][US61744CXK79] [Class A-2b][US61744CXL52] [Class A-2c][US61744CWM36] [Class M-1][US61744CWN19] [Class M-2][US61744CWP66] [Class M-3][US61744CXQ40] [Class M-4][US61744CXR23] [Class M-5][US61744CXS06] [Class M-6][US61744CXT88] [Class B-1][US61744CXU51] [Class B-2][US61744CXV35] [Class B-3][US61744CXW18] MORGAN STANLEY ABS CAPITAL I INC. Morgan Stanley ABS Capxxxx X Xxx. Xxust 2006-WMC1 Mortgage Xxxx-Txxxxxx Certificates, Series 2006-WMC1 [Class A-][Class M-][Class B-] evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class. Principal in respect of this Certificate is distributable monthly as set forth herein. Accordingly, the Certificate Balance at any time may be less than the Certificate Balance as set forth herein. This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, the Trustee or any other party to the Agreement referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality. This certifies that [_____________] is the registered owner of the Percentage Interest evidenced by this Certificate (obtained by dividing the denomination of this Certificate by the aggregate of the denominations of all Certificates of the Class to which this Certificate belongs) in certain monthly distributions pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital I Inc., as depositor (the "Depositor"), JPMoxxxx Xhxxx Xxxk, National Association, as servicer, WMC Mortgage Corp., as responsible party and Wells Fargo Bank, National Association, as trustee (the "Trustee"). To xxx xxtent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound. Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually authenticated by an authorized signatory of the Trustee. ***

Ability to Perform; Solvency. The Responsible Party WMC does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Responsible Party WMC is solvent and the sale of the Mortgage Loans will not cause the Responsible Party WMC to become insolvent. The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of Responsible PartyWMC's creditors. SCHEDULE V Morgan Stanley ABS Capital I Inc. Mortgage Pass-Xxxxxxh Xxxxxxicates Throxxx Xxrxxxxxxxes Series 2006-WMC1 HE1 Representations and Warranties of Morgan Stanley ABS Capital I Inc. as to the Mortgage Xxxxx Lxxxx --------------------------------------- The Depositor hereby makes with respect the Mortgage Loans the following representations and warranties to the Trustee, as of the Closing Date: (1) : Immediately prior to the transfer of the Mortgage Loans by the Depositor to the Trust on the Closing Date, the Depositor had good title to the Mortgage Loans, free and clear of any liens, charges, claims or encumbrances whatsoever; (2) The original loan balance of each Group I Mortgage Loan was within Freddie Mac's and Fannie Mae's dollar amount limits for conforming one- xx xxxr-family moxxxxxx loans; and (3) No Group I Mortgage Loan has a Prepayment Charge period in excess of three years. EXHIBIT A [To be added to any Class A-1 Certificate while it remains a Private Certificate: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE. In the event that a transfer of a Private Certificate which is a Book-Entry Certificate is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer will be deemed to have made as of the transfer date each of the certifications set forth in the Transferor Certificate in respect of such Certificate and the transferee will be deemed to have made as of the transfer date each of the certifications set forth in the Rule 144A Letter in respect of such Certificate, in each case as if such Certificate were evidenced by a Physical Certificate.] Unless this Certificate is presented by an authorized representative of the Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER ASSETS. AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-8, PTCE 95-60 OR PTCE 96-23 OR A COMPARABLE EXEMPTIOX XXXXXXXXX XXXXX XXXXXXX LAW. Certificate No. : A-1-[ ] A-2a-[ ] A-2b-[ ] A-2c-[ ] M-1-[ ] M-2-[ ] M-3-[ ] M-4-[ ] M-5-[ ] M-6-[ ] B-1-[ ] B-2-[ ] B-3-[ ] Cut-off Date : January 1, 2006 First Distribution Date : February 27, 2006 Initial Certificate Balance of this Certificate ("Denomination") : $[ ] Initial Certificate Balances [A-1] $284,575,000 of all Certificates of this : [A-2a] $376,590,000 Class [A-2b] $124,930,000 [A-2c] $91,611,000 [M-1] $43,428,000 [M-2] $39,428,000 [M-3] $29,143,000 [M-4] $19,428,000 [M-5] $19,428,000 [M-6] $17,143,000 [B-1] $18,286,000 [B-2] $14,285,000 [B-3] $13,714,000 CUSIP : [Class A-1][61744C XJ 0] [Class A-2a][61744C XK 7] [Class A-2b][61744C XL 5] [Class A-2c][61744C WM 3] [Class M-1][61744C WN 1] [Class M-2][61744C WP 6] [Class M-3][61744C XQ 4] [Class M-4][61744C XR 2] [Class M-5][61744C XS 0] [Class M-6][61744C XT 8] [Class B-1][61744C XU 5] [Class B-2][61744C XV 3] [Class B-3][61744C XW 1] : ISIN [Class A-1][US61744CXJ07] [Class A-2a][US61744CXK79] [Class A-2b][US61744CXL52] [Class A-2c][US61744CWM36] [Class M-1][US61744CWN19] [Class M-2][US61744CWP66] [Class M-3][US61744CXQ40] [Class M-4][US61744CXR23] [Class M-5][US61744CXS06] [Class M-6][US61744CXT88] [Class B-1][US61744CXU51] [Class B-2][US61744CXV35] [Class B-3][US61744CXW18] MORGAN STANLEY ABS CAPITAL I INC. SCHEDULE VI Morgan Stanley ABS Capxxxx X Xxx. Xxust 2006-WMC1 Capital I Inc. Mortgage Xxxx-Txxxxxx CertificatesPass Throxxx Xxrxxxxxxxes, Series 2006-WMC1 [Class A-][Class M-][Class B-] evidencing a percentage interest in the distributions allocable HE1 Representations and Warranties of Decision One as to the Certificates of Decision One Mortgage Loans Decision One hereby makes the above-referenced Class. Principal in respect of this Certificate is distributable monthly as representations and warranties set forth herein. Accordinglyin this Schedule VI, the Certificate Balance at any time may be less than the Certificate Balance as set forth herein. This Certificate does not evidence an obligation ofto Decision One Mortgage Loans only, or an interest in, and is not guaranteed by to the Depositor, the Trustee or any other party to Servicer and the Trustee, as of the Closing Date (unless otherwise expressly indicated). Capitalized terms used but not otherwise defined in the Agreement referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality. This certifies that [_____________] is the registered owner of the Percentage Interest evidenced by this Certificate (obtained by dividing the denomination of this Certificate by the aggregate of the denominations of all Certificates of the Class to which this Certificate belongs) in certain monthly distributions pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital I Inc., as depositor (the "Depositor"), JPMoxxxx Xhxxx Xxxk, National Association, as servicer, WMC Mortgage Corp., as responsible party and Wells Fargo Bank, National Association, as trustee (the "Trustee"). To xxx xxtent not defined herein, the capitalized terms used herein Schedule VI is attached shall have the meanings assigned ascribed thereto in the Decision One Purchase Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound. Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually authenticated by an authorized signatory of the Trustee. ***.