CHASE MORTGAGE FINANCE CORPORATION PURCHASER CHASE HOME FINANCE LLC MORTGAGE LOAN SELLER MORTGAGE LOAN SALE AGREEMENT Dated as of June 1, 2007 $689,012,528 (APPROXIMATE)
Exhibit
99.1
CHASE MORTGAGE FINANCE CORPORATION
PURCHASER
CHASE HOME FINANCE LLC
MORTGAGE LOAN SELLER
MORTGAGE LOAN SALE AGREEMENT
Dated as of June 1, 2007
Dated as of June 1, 2007
$689,012,528 (APPROXIMATE)
Mortgage Loan Sale Agreement (the “Agreement”), dated as of June 1, 2007 between Chase
Mortgage Finance Corporation, as purchaser (the “Purchaser”), and Chase Home Finance LLC, as seller
(the “Mortgage Loan Seller”).
The Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase, certain
mortgage loans listed in Exhibit A hereto (the “Mortgage Loans”) as described herein. The
Purchaser, a Delaware corporation with its principal place of business in Iselin, New Jersey, is a
wholly-owned limited-purpose finance subsidiary of JPMorgan Chase & Co. The Purchaser intends to
deposit the Mortgage Loans into a trust and sell a series of Multi-Class Mortgage Pass-Through
Certificates, Series 2007-S5 (the “Certificates”), evidencing interests in the Mortgage Loans under
a Pooling and Servicing Agreement to be dated as of June 1, 2007 among the Purchaser, JPMorgan
Chase Bank, N.A., as servicer, JPMorgan Chase Bank, N.A., as custodian, and The Bank of New York
Trust Company, N.A., as trustee (the “Trustee”) and paying agent (the “Paying Agent”),
substantially in the form previously delivered by the Purchaser to the Mortgage Loan Seller (the
“Pooling and Servicing Agreement”) and a Trust Agreement, dated as of June 1, 2007 among the
Depositor, the Trustee and the Paying Agent (the “Trust Agreement”).
Pursuant to the Pooling and Servicing Agreement, the Purchaser will assign all of its right,
title and interest in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. The Certificates will consist of Class A Certificates (the “Class A
Certificates”), Class M Certificates (the “Class M Certificates,” and together with the Class A
Certificates, the Class B-1 Certificates and the Class B-2 Certificates, the “Offered
Certificates”), and the Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates
(collectively, the “Class B Certificates”) and will evidence specified interests in a pool of
Mortgage Loans and certain other property held in trust under the Pooling and Servicing Agreement
and the Trust Agreement. The Class M Certificates and the Class B Certificates, the aggregate
original principal amount of which will initially equal approximately 2.50% and 1.25%,
respectively, of the outstanding principal balance of the Mortgage Loans, will be subordinate to
the Class A Certificates, the aggregate original principal amount of which will initially equal
approximately 96.25% of the outstanding principal balance of the Mortgage Loans.
The Purchaser has filed with the Securities and Exchange Commission (the “Commission”)
registration statements on Form S-3 relating to the Offered Certificates, and the offering thereof
from time to time in accordance with Rule 415 under the Securities Act of 1933 and the rules of the
Commission thereunder. The Purchaser has caused a prospectus dated April 17, 2007 as supplemented
by a prospectus supplement, dated June 25, 2007 (as supplemented, the “Prospectus”) to be prepared
with respect to the sale of the Offered Certificates, copies of which have been delivered to the
Mortgage Loan Seller.
All capitalized terms not otherwise defined herein have the meanings set forth in the Pooling
and Servicing Agreement. The following terms are defined as follows:
Cut-off Date:
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June 1, 2007 | |
First Distribution Date:
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July 25, 2007 |
Closing Date:
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June 26, 2007 |
Now, therefore, in consideration of the premises and the mutual agreements set forth herein,
the parties agree as follows:
ARTICLE 1
SALE AND CONVEYANCE OF MORTGAGE LOANS
SECTION 1.01 Sale and Conveyance of Mortgage; Possession of Mortgage File. The
Mortgage Loan Seller does hereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, all right, title, and interest of the Mortgage Loan Seller in and to the Mortgage
Loans and each of the documents and records maintained by the Mortgage Loan Seller with respect to
the origination or servicing of a particular Mortgage Loan (each, a “Mortgage File”) including all
principal and interest due on or with respect to the Mortgage Loans after the Cut-off Date. All
documents relating to the Mortgage Loans not delivered to the Purchaser are and shall be held in
trust by the Mortgage Loan Seller for the benefit of the Purchaser as the owner thereof or the
Purchaser’s assignee or designee and the Mortgage Loan Seller’s possession of the contents of each
such document so retained is at the will of the Purchaser or the Purchaser’s assignee or designee
and such retention and possession by the Mortgage Loan Seller is in a custodial capacity only.
Upon the sale of the Mortgage Loans, the ownership of each related Mortgage Note, the Mortgage and
the contents of the related Mortgage File will be vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or which come into the
possession of the Mortgage Loan Seller shall immediately vest in the Purchaser and shall be
retained and maintained, in trust, by the Mortgage Loan Seller at the will of the Purchaser in such
custodial capacity only. The Mortgage Loan Seller’s records will accurately reflect the sale of
each Mortgage Loan to the Purchaser. The Mortgage Loan Seller shall release its custody of the
contents of any Mortgage File only in accordance with written instructions from the Purchaser or
the Purchaser’s assignee or designee, except that where such release is required as incidental to a
repurchase of any such Mortgage Loan pursuant to Section 1.04 or 2.02 hereof, such written
instructions shall not be required. The ownership of each Mortgage Note, the Mortgage and the
contents of the related Mortgage File will be vested in the Trustee, as assignee of the Purchaser.
The Mortgage Loan Seller shall not take any action inconsistent with such ownership and shall not
claim any ownership interest therein. The Mortgage Loan Seller shall respond to any third party
inquiries with respect to ownership of the Mortgage Loans by stating that such ownership is held by
the Trustee and the Certificateholders.
SECTION 1.02 Books and Records. From and after the sale of the Mortgage Loans to the
Purchaser, record title to each Mortgage and the related Mortgage Note shall be transferred to the
Purchaser or its assignee in accordance with this Agreement. All rights arising out of the
Mortgage Loans, including, but not limited to, all funds received on or in connection with a
Mortgage Loan, shall be received and held by the Mortgage Loan Seller in trust for the benefit of
the Purchaser or its assignee as the owner of the Mortgage Loans. The Mortgage Loan Seller shall
be responsible for maintaining, and shall maintain, a set of records for each Mortgage Loan which
shall be clearly marked to reflect the ownership of each Mortgage Loan by the Purchaser or its
assignee pursuant to the Pooling and Servicing Agreement.
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SECTION 1.03 Delivery of Mortgage Loan Documents. The Mortgage Loan Seller has
delivered or caused to be delivered to the Purchaser or its designee in accordance with the
instructions of the Purchaser, each of the documents referred to in Section 2.01 of the Pooling and
Servicing Agreement.
If, in connection with any Mortgage Loan, the Mortgage Loan Seller cannot deliver the Mortgage
with evidence of recording thereon concurrently with the execution and delivery of this Agreement,
or within 120 days thereafter, solely because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation, the Mortgage Loan Seller shall deliver or
cause to be delivered to the Purchaser or its designee an Officer’s Certificate, with a photocopy
of such Mortgage attached thereto, stating that such Mortgage has been delivered to the appropriate
public recording official for recordation. The Mortgage Loan Seller shall promptly deliver or
cause to be delivered to the Purchaser or its designee such Mortgage with evidence of recording
indicated thereon upon receipt thereof from the public recording official. Notwithstanding the
above, the Mortgage Loan Seller shall co-operate with the Servicers and use its best efforts to
cause each original Mortgage with evidence of recording thereon to be delivered to the Purchaser or
its designee within 180 days of the Closing Date.
SECTION 1.04 Review of Mortgage Loans; Repurchase of Mortgage Loans. The Purchaser
or its designee shall review the documents delivered pursuant to Section 1.03 or Section 2.03
hereof within 270 days after the Closing Date or the date of substitution, as the case may be, 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. If the Purchaser or its
designee discovers that any document or documents constituting a part of a Mortgage File is missing
or defective in any material respect, the Purchaser or its designee shall notify the Mortgage Loan
Seller promptly (and in any event within no more than five Business Days). The Mortgage Loan
Seller shall correct or cure any such omission or defect within 60 days from the date the Mortgage
Loan Seller was notified of the omission or defect, and, if the Mortgage Loan Seller does not
correct or cure each omission or defect within such period, the Mortgage Loan Seller shall
repurchase such Mortgage Loan at the Purchase Price within 90 days of the date the Mortgage Loan
Seller was notified of such omission or defect. At the time of such repurchase, the Purchaser or
the Trustee, as appropriate, shall, in exchange for a written receipt therefor, release documents
in its possession relating to such Mortgage Loan to the Mortgage Loan Seller.
The Mortgage Loan Seller shall repurchase all Mortgage Loans to which an exception was taken
in the Exception Report and confirmed to the Company by the Trustee unless such exception is cured
to the satisfaction of the Purchaser within five Business Days of the date hereof (or such other
period as is agreed by the Purchaser and the Trustee, but not more than 60 days). At the time of
such repurchase, the Purchaser or the Trustee, as appropriate, shall, in exchange for a written
receipt therefor, release documents in its possession relating to such Mortgage Loan to the
Mortgage Loan Seller.
SECTION 1.05 Treatment as a Security Agreement. The Mortgage Loan Seller,
concurrently with the execution and delivery hereof, has conveyed to the Purchaser all of the
Mortgage Loan Seller’s right, title and interest in and to the Mortgage Loans. The parties intend
that the conveyance of the Mortgage Loan Seller’s right, title and interest in and to the Mortgage
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Loans pursuant to this Agreement shall constitute a purchase and sale and not a loan. If such
conveyance is deemed to be a pledge and not a sale, then the parties also intend and agree that the
Mortgage Loan Seller shall be deemed to have granted, and in such event does hereby grant, to the
Purchaser a first priority security interest in all of the Mortgage Loan Seller’s right, title and
interest in and to the Mortgage Loans, all payments of principal or interest on such Mortgage
Loans, all other payments made in respect of such Mortgage Loans, and all proceeds if any thereof,
and that this Agreement shall constitute a security agreement under applicable law. If such
conveyance is deemed to be a pledge and not a sale, the Purchaser may, to secure the Purchaser’s
own borrowings, repledge (i) all or any portion of the Mortgage Loans pledged to the Purchaser and
not released from the security interest of this Agreement at the time of such pledge and (ii) all
proceeds, products and profits derived from such Mortgage Loans, including, without limitation, to
the extent of the Mortgage Loan Seller’s interest therein, all moneys, goods, insurance proceeds
and other tangible or intangible property received upon the liquidation or sale thereof or
otherwise relating thereto. Such a repledge may be made by the Purchaser with or without a
repledge by the Purchaser of its rights under this Agreement, and without further notice to or
acknowledgment from the Mortgage Loan Seller. The Mortgage Loan Seller waives, to the extent
permitted by applicable law, all claims, causes of action and remedies whether legal or equitable
(including any right of set-off) against the Purchaser or any assignee of the Purchaser relating to
such action by the Purchaser.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Representations and Warranties of the Mortgage Loan Seller. The
Mortgage Loan Seller represents and warrants to the Purchaser that, as of the Closing Date, it has
made the representations and warranties set forth in Section 3.01 of the Pooling and Servicing
Agreement for the benefit of the Purchaser. Such representations and warranties are incorporated
by reference in this Section 2.01 hereof, and the Purchaser may rely thereon as if such
representations and warranties were fully set forth herein.
It is understood and agreed that the representations and warranties incorporated by reference
in this Section 2.01 shall survive the sale of the Mortgage Loans to the Purchaser, the sale and
delivery of the Mortgage Loans to the Trust Fund and the issuance, sale and delivery of the
Certificates by the Purchaser, shall continue so long as any Class A, Class M or Class B
Certificate shall remain outstanding or until the Pooling and Servicing Agreement shall have been
terminated as therein provided, and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination of any Mortgage File.
The Mortgage Loan Seller acknowledges that, pursuant to the Pooling and Servicing Agreement,
the Purchaser will assign all of its right, title and interest in and to the Mortgage Loans and its
right to exercise the remedies created by Sections 1.04 and 2.02 hereof to the Trustee for the
benefit of the Certificateholders. The Mortgage Loan Seller agrees that, upon such assignment to
the Trustee, the Trustee may enforce directly, without joinder of the Purchaser, the repurchase
obligations of the Mortgage Loan Seller set forth in Sections 1.04 and 2.02 hereof with respect to
breaches of the representations and warranties set forth in Section
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3.01 of the Pooling and Servicing Agreement, or with respect to documentary defects or
omissions set forth in Section 2.02 of the Pooling and Servicing Agreement.
SECTION 2.02 Breach of Representations and Warranties; Repurchase of Mortgage Loans.
Upon discovery by the Mortgage Loan Seller, the Purchaser or the Trustee of a breach of any of the
representations and warranties incorporated by reference in Section 2.01 hereof, irrespective of
any limitation in such representation or warranty regarding the knowledge of the Mortgage Loan
Seller, which materially and adversely affects the value of the Mortgage Loans or the interests of
the Purchaser or the Trustee (or which materially and adversely affects the interests of the
Purchaser or the Trustee in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other parties. Within 90 days of its discovery or its receipt of notice of
any such breach, the Mortgage Loan Seller shall (i) cure such breach, or (ii) substitute a Mortgage
Loan if permitted to do so by the provisions of Section 2.03 below, or (iii) if the breach relates
to a particular Mortgage Loan, repurchase such Mortgage Loan from the Trustee or the Purchaser, as
appropriate, at a price equal to the Purchase Price, or (iv) if the breach relates to a breach of a
representation or warranty regarding the Mortgage Loans as a whole, repurchase Mortgage Loans
selected by the Purchaser (or its designee or assignee) such that the representations and
warranties with respect to the Mortgage Loans as a whole are materially correct, from the Trustee
or the Purchaser, as appropriate, at the Purchase Price therefor, so long as such repurchase is in
accordance with the Pooling and Servicing Agreement. Any such repurchase shall be accomplished by
payment to the Servicers or deposit in the Certificate Account of the Purchase Price (after
deducting therefrom any amounts received in respect of such repurchased Mortgage Loan and being
held in the Certificate Account for future distribution).
SECTION 2.03 Option to Substitute. If the Mortgage Loan Seller would otherwise be
required to repurchase any Mortgage Loan pursuant to Section 1.04 or 2.02 hereof, the Mortgage Loan
Seller may, at its option, but only within less than two years of the Closing Date, remove such
deficient Mortgage Loan from the terms of this Agreement and substitute another mortgage loan for
such deficient Mortgage Loan, in lieu of repurchasing such deficient Mortgage Loan. Any substitute
Mortgage Loan shall (i) have an outstanding principal amount at the time of substitution not in
excess of the outstanding principal amount of the deficient Mortgage Loan, (ii) have a Mortgage
Rate not less than the Mortgage Rate of the deficient Mortgage Loan, and not more than one
percentage point greater than the Mortgage Rate of the deficient Mortgage Loan, (iii) have a
remaining term to maturity not later than, and not more than one year less than, the remaining term
to maturity of the deficient Mortgage Loan, (iv) be, in the reasonable determination of the related
servicer, of the same type, quality and character (including location of the Mortgaged Property) as
the deficient Mortgage Loan as if the breach had not occurred, (v) have a Loan-to-Value Ratio at
origination not greater than that of the deficient Mortgage Loan, (vi) be, in the reasonable
determination of the Mortgage Loan Seller, in material compliance with the representations and
warranties incorporated by reference in Section 2.01 hereof as of the date of substitution and
(vii) if the deficient Mortgage Loan for which it is being substituted is not a Balloon Loan, not
be a Balloon Loan.
The Mortgage Loan Seller shall amend the Mortgage Loan Schedule to reflect the withdrawal of
the deficient Mortgage Loan from this Agreement and the substitution of such
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substitute Mortgage Loan therefor. Upon such amendment, the Mortgage Loan Seller shall be
deemed to have made as to such substitute Mortgage Loan the representations and warranties
incorporated by reference in Section 2.01 hereof as of the date of such substitution, which shall
continue so long as any Class A, Class M or Class B Certificate shall remain outstanding or until
the Pooling and Servicing Agreement shall have been terminated as therein provided.
SECTION 2.04. Action to Ensure Enforceability. The Mortgage Loan Seller shall, at
the request of the Purchaser or the Trustee, take all action on its part which is reasonably
necessary to ensure the enforceability of a Mortgage Loan.
SECTION 2.05. High Cost Home Loans. No Mortgage Loan is a “High-Cost Home Loan” as
defined in New York Banking Law 6-1; No Mortgage Loan originated (or modified) on or after October
1, 2002 and before March 7, 2003 is secured by property located in the State of Georgia; No
Mortgage Loan originated on or after March 7, 2003 is a “High-Cost Home Loan” as defined under the
Georgia Fair Lending Act. No Mortgage Loan is a “High-Cost Home Loan” as defined in the Arkansas
Home Loan Protection Act effective July 16, 2003 (Act 1340 of 2003); No Mortgage Loan is a
“High-Cost Home Loan” as defined in the Kentucky high-cost home loan statute effective June 24,
2003 (Ky. Rev. Stat. Section 360.100); No Mortgage Loan is a “home loan” as defined by Nevada
Revised Statute §598D.040; No Mortgage Loan is a “high-rate, high-fee mortgage” as defined by Maine
Revised Statute, Title 9-A, § 8-103; No Mortgage Loan is a “High-Cost Home Loan” as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et seq.); No Mortgage
Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective
January 1, 2004 (N.M. Stat. ▇▇▇. §§ 58-21A-1 et seq.); No Mortgage Loan is a “High-Risk Home Loan”
as defined in the Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat.
137/1 et seq.); No Mortgage Loan is a “High-Cost Home Mortgage Loan” as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 6, 2004 (Mass. ▇▇▇. Laws Ch.
183C); No Mortgage Loan is a “High Cost Home Loan” as defined in the Indiana Home Loan Practices
Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9).
ARTICLE 3
MISCELLANEOUS PROVISIONS
SECTION 3.01 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid,
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 3.02 Governing Law. This Agreement shall be 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 3.03 Fees and Expenses. The Mortgage Loan Seller shall pay all costs, fees
and expenses incurred in connection with the transactions contemplated hereby. The Mortgage
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Loan Seller will pay, or arrange for payment of, all recording fees in connection with the
transactions contemplated hereby.
SECTION 3.04 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 first
class or registered mail, postage prepaid, to (i) in the case of the Purchaser, Chase Mortgage
Finance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, (ii) in the case of the
Mortgage Loan Seller, Chase Home Finance LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Contract Finance, or (iii) in the case of either of the preceding Persons, such other
address as may hereafter be furnished to the other Person in writing by such Person.
SECTION 3.05 Severability Clause. Any part, provision, representation or warranty of
this Agreement which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 3.06 Counterparts. This Agreement may be executed in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION 3.07 Place of Delivery. The Agreement shall be deemed in effect when a fully
executed counterpart thereof is received by the Purchaser and shall be deemed to have been made in
the State of New York.
SECTION 3.08 Agreement of Parties. The Mortgage Loan Seller and the Purchaser agree
to execute and deliver such instruments and take such actions as the other party may, from time to
time, reasonably request in order to effectuate the purpose and to carry out the terms of this
Agreement.
SECTION 3.09 Successors and Assigns; Assignment of Agreement. This Agreement shall
bind and inure to the benefit of and be enforceable by the Mortgage Loan Seller and the Purchaser
and their respective successors and assigns. This Agreement cannot be assigned, pledged or
hypothecated by any party hereto to a third party without the written consent of each other party
to this Agreement, and any such purported assignment, pledge or hypothecation shall be of no force
or effect.
SECTION 3.10 Amendment. The Agreement may be amended from time to time by the
Mortgage Loan Seller and the Purchaser by written agreement signed by the Mortgage Loan Seller and
the Purchaser.
SECTION 3.11 Waivers; Other Agreements. No term or provision of this Agreement may
be waived or modified unless such waiver or modification is in writing and signed by a duly
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authorized officer of the party against whom such waiver or modification is sought to be
enforced.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the Purchaser and the Mortgage Loan Seller have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the day and year first
above written.
| CHASE MORTGAGE FINANCE | ||||||
| CORPORATION | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| CHASE HOME FINANCE LLC | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]