EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION
AGREEMENT,
dated as of December 16, 2005, between
Residential Funding
Corporation,
a Delaware
corporation
("RFC") and Residential
Asset
Securities
Corporation,
a Delaware
corporation (the "Company").
Recitals
A.
RFC has entered into seller
contracts
("Seller
Contracts")
with
certain
sellers and
servicers.
B.
The Company wishes to purchase from RFC certain
Mortgage Loans (as hereinafter
defined)
originated pursuant to the Seller Contracts with respect thereto.
C.
The Company,
RFC, as master
servicer,
and U.S. Bank National
Association,
as trustee
(the
"Trustee"),
are entering into a Pooling and Servicing
Agreement dated as of
December 1, 2005
(the
"Pooling and
Servicing
Agreement"),
pursuant to which the Trust
proposes to issue Home Equity
Mortgage
Asset-Backed
Pass-Through
Certificates,
Series 2005-EMX5 (the "Certificates")
consisting of six classes
designated as Class A-1,
Class A-2,
Class A-3, Class SB, Class R-I and Class R-II representing
beneficial
ownership
interests
solely in a trust fund
consisting
primarily of a pool of adjustable
and fixed rate
one-to
four-family
first lien and junior lien mortgage loans identified on Exhibit F-1
to the Pooling and
Servicing Agreement (the "Mortgage Loans").
D.
In
connection
with the purchase of the Mortgage
Loans,
the Company will assign to RFC
the
Class SB,
Class R-I
and
Class R-II
Certificates
(the
"Retained
Certificates").
The
Class A-1,
Class A-2
and
Class A-3
Certificates
were offered to
investors
pursuant to a
preliminary
prospectus
supplement dated December 6, 2005 (the "Preliminary Prospectus
Supplement").
E.
In
connection
with
the
purchase
of
the
Mortgage
Loans
and
the
issuance
of the
Certificates,
RFC wishes to make
certain
representations
and
warranties
to the
Company and to assign
certain of its rights under the Seller
Contracts to the Company,
and the Company wishes to assume certain
of RFC's obligations under the Seller Contracts.
F.
The Company and RFC intend
that the
conveyance
by RFC to the Company of all its right,
title and interest in and to the Mortgage
Loans
pursuant to this
Agreement
shall
constitute a purchase
and sale and not a loan.
NOW THEREFORE,
in
consideration
of the recitals and the mutual
promises
herein and other good
and valuable consideration, the parties agree as follows:
1.
All
capitalized
terms used but not defined
herein shall have the meanings
assigned
thereto in
the Pooling and Servicing Agreement.
2.
Concurrently
with the execution and delivery
hereof,
RFC hereby assigns to the Company
without
recourse
all of its right,
title and interest in and to the Mortgage
Loans,
including
all interest and
principal
received on or with
respect to the Mortgage
Loans after the Cut-off Date (other than
payments
of
principal
and
interest
due on the
Mortgage
Loans
in
December 2005).
In
consideration
of
such
assignment,
RFC will
receive
from the
Company,
in
immediately
available
funds,
an amount
equal to
$379,050,000.00
and the Retained
Certificates.
In connection
with such
assignment and at the Company's
direction,
RFC has in respect of each
Mortgage
Loan
endorsed the related
Mortgage Note (other than any
Destroyed
Mortgage Note,
hereinafter
defined) to the order of the Trustee and delivered an assignment of
mortgage in
recordable
form to the Trustee or its agent.
A
"Destroyed
Mortgage
Note" means a Mortgage
Note the original of which was permanently lost or destroyed.
The Company and RFC intend that the
conveyance by RFC to the Company of all its right,
title and
interest in and to the Mortgage
Loans
pursuant to this Section 2 shall be, and be construed as, a sale of
the Mortgage Loans by RFC to the Company.
It is,
further,
not intended that such conveyance be deemed to
be a pledge
of the
Mortgage
Loans by RFC to the
Company
to secure a debt or other
obligation
of RFC.
Nonetheless
(a) this
Agreement is intended to be and hereby is deemed to be a security
agreement
within
the meaning of Articles 8 and 9 of the Minnesota
Uniform
Commercial Code and the Uniform
Commercial Code
of any other applicable
jurisdiction;
(b) the conveyance
provided for in this Section shall be deemed to
be a grant by RFC to the
Company of a security
interest
in all of RFC's
right
(including
the power to
convey title
thereto),
title and
interest,
whether now owned or hereafter
acquired,
in and to (A) the
Mortgage Loans,
including the Mortgage Notes, the Mortgages,
any related insurance policies and all other
documents
in the related
Mortgage
Files,
(B) all amounts
payable
pursuant
to the
Mortgage
Loans in
accordance
with the terms thereof and (C) any and all general
intangibles
consisting of, arising from or
relating to any of the foregoing,
and all proceeds of the
conversion,
voluntary or
involuntary,
of the
foregoing
into cash,
instruments,
securities
or other
property,
including,
without
limitation,
all
amounts from time to time held or invested in the
Certificate
Account or the Custodial
Account,
whether
in the form of cash,
instruments,
securities or other
property;
(c) the possession by the Trustee,
the
Custodian
or any
other
agent of the
Trustee
of
Mortgage
Notes or such
other
items of
property
as
constitute
instruments,
money,
payment
intangibles,
negotiable
documents,
goods,
deposit
accounts,
letters of credit, advices of credit,
investment property,
certificated securities or chattel paper shall
be deemed to be "possession by the secured
party," or possession by a purchaser or a person
designated by
such secured party,
for purposes of perfecting
the security
interest
pursuant to the Minnesota
Uniform
Commercial Code and the Uniform
Commercial Code of any other applicable
jurisdiction
(including
without
limitation,
Sections
8-106,
9-313 and 9-106
thereof);
and
(d) notifications
to persons
holding such
property,
and
acknowledgments,
receipts or
confirmations
from persons holding such property,
shall be
deemed
notifications to, or
acknowledgments,
receipts or confirmations from,
financial
intermediaries,
bailees or agents (as
applicable)
of the Trustee for the purpose of
perfecting
such
security
interest
under
applicable
law. RFC shall,
to the extent
consistent
with this
Agreement,
take such
reasonable
actions as may be necessary to ensure that,
if this
Agreement
were deemed to create a security
interest
in the Mortgage Loans and the other property
described
above,
such security
interest would be deemed to
be a perfected
security
interest of first
priority
under
applicable law and will be maintained as such
throughout
the term of this
Agreement.
Without
limiting
the
generality
of the
foregoing,
RFC shall
prepare and deliver to the Company not less than 15 days prior to
any filing
date,
and the Company
shall
file,
or
shall
cause to be
filed,
at the
expense
of RFC,
all
filings
necessary
to
maintain
the
effectiveness
of any original
filings
necessary
under the Uniform
Commercial
Code as in effect in any
jurisdiction
to perfect
the
Company's
security
interest
in or lien on the
Mortgage
Loans
including
without limitation (x) continuation
statements,
and (y) such other statements as may be occasioned by (1)
any change of name of RFC or the Company,
(2) any change of location of the state of
formation,
place of
business or the chief
executive
office of RFC, or (3) any transfer of any interest of RFC in any
Mortgage
Loan.
3.
Concurrently
with the execution and delivery
hereof,
the Company
hereby assigns to RFC without
recourse
all of its
right,
title
and
interest
in and to the
Retained
Certificates
as
part
of the
consideration payable to RFC by the Company pursuant to this
Agreement.
4.
RFC
represents
and warrants to the Company,
with respect to each Mortgage Loan that on the date
of execution hereof (or, if otherwise specified below, as of the
date so specified),
(i)
Immediately
prior to the
delivery of the Mortgage
Loans to the Company,
RFC had good title to,
and was the sole owner of,
each
Mortgage
Loan free and clear of any pledge,
lien or
security
interest
(other
than (a) rights to
servicing
and
related
compensation,
and (b) any senior
lien
relating to a
Mortgage Loan listed on Schedule A attached
hereto (the "Junior Lien Mortgage
Loans")) and had full right
and authority to sell and assign the Mortgage Loans pursuant to
this Agreement.
(ii)
The proceeds of the Mortgage Loan have been fully
disbursed,
there is no requirement
for future
advances
thereunder and any and all requirements as to completion of any
on-site or off-site
improvements
and as to
disbursements
of any escrow
funds
therefor
(including
any escrow funds held to make Monthly
Payments pending
completion of such
improvements)
have been complied with. All costs,
fees and expenses
incurred in making, closing or recording the Mortgage Loans were
paid.
(iii)
The Mortgagor
(including
any party
secondarily
liable under the Mortgage File) has no right of
set-off,
defense,
counterclaim
or right of
rescission as to any document in the Mortgage File except as
may be provided under the Relief Act.
(iv)
RFC and any
other
originator,
servicer
or
other
previous
owner
of each
Mortgage
Loan has
obtained all
licenses
and effected all
registrations
required
under all
applicable
local,
state and
federal laws,
regulations and orders,
including without
limitation truth in lending and disclosure laws,
necessary to own or originate
the
Mortgage
Loans (the failure to obtain such
licenses or to comply with
such laws, regulations and orders would make such Mortgage Loans
void or voidable).
(v)
A policy of title
insurance,
in the form and
amount
that is in
material
compliance
with the
Program
Guide,
was effective as of the closing of each Mortgage
Loan, is valid and binding,
and remains
in full force and effect except for Mortgaged
Properties
located in the State of Iowa where an attorney's
certificate
has been provided in accordance
with the Program
Guide.
No claims have been made under such
title
insurance
policy and no holder of the related
mortgage,
including
RFC, has done or omitted to do
anything which would impair the coverage of such title insurance
policy.
(vi)
Each
Mortgage
Loan is a valid and
enforceable
first
lien (or in the case of the
Junior
Lien
Mortgage
Loans,
junior lien) on the
Mortgaged
Property
subject
only to (1) the lien of
nondelinquent
current real property taxes and assessments,
(2) covenants,
conditions and
restrictions,
rights of way,
easements
and
other
matters
of
public
record
as of the
date of
recording
of such
Mortgage,
such
exceptions
appearing
of
record
being
acceptable
to
mortgage
lending
institutions
generally
or
specifically
reflected in the appraisal made in connection
with the
origination of the related
Mortgage
Loan,
and (3)
other
matters
to which
like
properties
are
commonly
subject
that do not
materially
interfere with the benefits of the security intended to be provided
by such Mortgage.
(vii)
All
improvements
which were
considered
in
determining
the
Appraised
Value of the Mortgaged
Property lie wholly within the boundaries
and the building
restriction
lines of the Mortgaged
Premises,
or the policy of title insurance
affirmatively
insures against loss or damage by reason of any violation,
variation,
encroachment or adverse
circumstance
that either is disclosed or would have been disclosed by
an accurate survey.
(viii)
There
are no
delinquent
tax or
delinquent
assessment
liens
against
the
related
Mortgaged
Property,
and there are no
mechanic's
liens or claims for work,
labor or
material
or any other
liens
affecting
such
Mortgaged
Property
which are or may be a lien prior to, or equal
with,
the lien of the
Mortgage
assigned to RFC,
except
those liens that are insured
against by the policy of title
insurance
and described in (v) above.
(ix)
Each
Mortgaged
Property
is free of
material
damage
and is in good
repair
and no
notice of
condemnation has been given with respect thereto.
(x)
The
improvements
upon the Mortgaged
Property are insured against loss by fire and other hazards
as
required by the
Program
Guide,
including
flood
insurance
if
required
under the
National
Flood
Insurance
Act of 1968,
as
amended.
The
Mortgage
requires
the
Mortgagor
to maintain
such
casualty
insurance at the Mortgagor's
expense,
and on the Mortgagor's
failure to do so,
authorizes the holder of
the Mortgage to obtain and maintain such
insurance at the
Mortgagor's
expense and to seek
reimbursement
therefore from the Mortgagor.
(xi)
The
appraisal
was made by an appraiser who meets the minimum
qualifications
for
appraisers as
specified in the Program Guide.
(xii)
Each
Mortgage
Note and
Mortgage
constitutes
a legal,
valid
and
binding
obligation
of the
Mortgagor
enforceable in accordance
with its terms except as limited by
bankruptcy,
insolvency or other
similar laws affecting generally the enforcement of creditors'
rights.
(xiii)
Each Mortgage Loan is covered by a standard hazard insurance
policy.
(xiv)
0.1% of the Mortgage Loans is secured by a leasehold estate.
(xv)
The
information
set forth on the Mortgage
Loan
Schedule
with respect to each Mortgage Loan is
true and correct in all material respects as of the date or dates
which such information is furnished.
(xvi)
As of the Cut-off Date,
0.1% of the Mortgage
Loans are 30 or more days
Delinquent in payment of
principal and interest.
For the purposes of this
representation a Mortgage Loan is considered
Delinquent
if a
Subservicer
or the Master
Servicer has made any
advances on the
Mortgage
Loan that have not been
reimbursed
out of payments
by the
mortgagor
or on the
mortgagor's
behalf
from a source
other than a
Subservicer, a Seller, the Master Servicer or an affiliated entity
of either.
(xvii)
None of the
Mortgage
Loans with
Loan-to-Value
Ratios,
or combined
Loan-to-Value
Ratios with
respect to Junior Lien Loans,
at
origination
in excess of 80% are
insured by a
borrower-paid,
primary
mortgage insurance policy.
(xviii)
The
weighted
average
Loan-to-Value
Ratio with respect to the Mortgage
Loans,
by
outstanding
principal balance at origination, is 83.80%.
(xix)
No more than
approximately
0.4% of the Mortgage
Loans, by outstanding
principal
balance as of
the
Cut-off Date, are located in any one zip code area in Arizona.
(xx)
All of the
Mortgage
Loans that are
adjustable-rate
loans will
adjust
semi-annually
based on
Six-Month
LIBOR (as defined in the
Preliminary
Prospectus
Supplement).
Each of the Mortgage Loans that
are
adjustable-rate
loans will adjust on the Adjustment Date specified in the related
Mortgage Note to a
rate equal to the sum
(rounded as
described
in the
Preliminary
Prospectus
Supplement)
of the related
Index
described
in the
Preliminary
Prospectus
Supplement
and the Note Margin set forth in the related
Mortgage Note,
subject to the limitations
described in the Preliminary
Prospectus
Supplement,
and each
Mortgage Loan has an original
term to maturity from the date on which the first monthly
payment is due of
not more than
approximately
30 years.
On each
Adjustment
Date, the Mortgage Rate on each Mortgage Loan
that is an
adjustable-rate
loan will be
adjusted
to equal the
related
Index
plus the
related
Gross
Margin,
subject in each case to the Periodic
Rate Cap, the Mortgage Rate and the Minimum
Mortgage
Rate.
The amount of the monthly
payment on each Mortgage Loan that is an
adjustable-rate
loan will be adjusted
on the first day of the month
following the month in which the Adjustment
Date occurs to equal the amount
necessary
to pay
interest
at the
then-applicable
Mortgage
Rate
to
fully
amortize
the
outstanding
principal
balance of such Mortgage Loan over its remaining
term to stated
maturity.
No Mortgage Loan is
subject to negative amortization.
(xxi)
With respect to each
Mortgage
constituting
a deed of trust,
a trustee,
duly
qualified
under
applicable
law to serve as such,
has been
properly
designated
and
currently so serves and is named in
such
Mortgage,
and no fees or expenses are or will become
payable by the holder of the Mortgage
Loan to
the
trustee
under the deed of trust,
except in
connection
with a trustee's
sale after
default by the
Mortgagor.
(xxii)
Approximately
16.48% of the Mortgaged
Properties
(by
outstanding
principal
balance as of the
Cut-off
Date),
are units in detached
planned unit
developments.
Approximately
3.79% of the
Mortgaged
Properties (by outstanding
principal
balance as of the Cut-off Date),
are units in attached planned unit
developments.
Approximately
1.50% of the Mortgaged
Properties (by
outstanding
principal
balance as of
the Cut-off Date),
are units in
townhouses.
None of the Mortgaged
Properties are units in
manufactured
housing
developments.
Approximately 6.96% of the Mortgaged
Properties (by outstanding
principal balance
as of the Cut-off
Date),
are
condominium
units.
Each
Mortgaged
Property is suitable
for
year-round
occupancy.
(xxiii)
Approximately
93.87% of the Mortgaged
Properties
(by
outstanding
principal
balance as of the
Cut-off
Date) are
secured by the
owner's
primary
residence.
Approximately
3.69% an of the
Mortgaged
Properties (by outstanding
principal
balance as of the Cut-off Date) are secured by the owner's second
or
vacation residence.
Approximately 2.44% of the Mortgaged
Properties (by outstanding
principal balance as
of the Cut-off Date) are secured by a non-owner occupied residence.
(xxiv)
Approximately
65.11% of the Mortgaged
Properties
(by
outstanding
principal
balance as of the
Cut-off Date),
are secured by detached
one-family
dwelling units.
Approximately
6.12% of the Mortgaged
Properties (by outstanding
principal
balance as of the Cut-off Date),
are secured by two- to four-family
dwelling units.
(xxv)
The average
outstanding
principal balance of the Mortgage Loans at origination was
approximately
$157,387.
No
Mortgage
Loan at
origination
had a
principal
balance of less than
$13,200 or more than
$787,500.
(xxvi)
As of the Cut-off Date,
all Mortgage Rate
adjustments on the Mortgage Loans that have reached an
Adjustment Date have been done in accordance with the terms of the
related Mortgage Note.
(xxvii)
Any escrow
arrangements
established with respect to any Mortgage Loan are in compliance
with all
applicable
local,
state and federal
laws and are in
compliance
with the terms of the related
Mortgage
Note.
(xxviii) Except as otherwise
specifically
set forth
herein,
there is no default,
breach,
violation or
event of
acceleration
existing
under any Mortgage
Note or Mortgage and no event which,
with notice and
expiration
of any
grace or cure
period,
would
constitute
a
default,
breach,
violation
or event of
acceleration,
and no such default,
breach,
violation or event of acceleration
has
