EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND
ASSUMPTION
AGREEMENT,
dated as of December
28, 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-KS12 (the "Certificates")
consisting of fifteen
classes designated as
Class A-1, Class A-2,
Class A-3,
Class M-1, Class M-2,
Class M-3,
Class M-4,
Class M-5, Class M-6,
Class M-7,
Class M-8, Class M-9, Class SB, Class R-I and Class R-II
representing beneficial
ownership interests
solely in a trust fund consisting primarily of a pool that
will be divided into the adjustable and fixed rate one-to
four-family
mortgage
loans identified
on Exhibit F 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-I-1, Class A-I-2,
Class A-I-3, Class M-1,
Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates
were offered to investors pursuant to a Prospectus
Supplement dated December 22, 2005 (the "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 $1,113,967,263.79 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) None of the Mortgage Loans are 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, approximately 0.2% Mortgage Loans are 30 to 59
days Delinquent in
payment of principal
and interest. As of
the Cut-off Date,
none of the Mortgage Loans are Delinquent in payment of principal
or interest by
60 days or more. 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) To the
best of RFC's knowledge, except with respect to one of the
Mortgage Loans,
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
81.18%.
(xix) No more than
approximately
0.3% of the
Mortgage Loans by outstanding
principal balance as
of the Cut-off Date,
are located in any one zip code area
in Maryland.
(xx) All of the
Mortgage Loans
that are adjustable-rate loans will adjust
semi-annually
based on Six-Month LIBOR (as defined in the 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 Prospectus
Supplement)
of the
related Index
described in the
Prospectus Supplement
and the Note Margin
set
forth in the related Mortgage Note, subject to the limitations
described in the
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
11.82% the Mortgaged
Properties
related to the
Mortgage
Loans (by outstanding
principal balance as of the Cut-off
Date) are units in
detached planned
unit developments. Approximately 1.92% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding principal
balance as of
the Cut
