Exhibit 10.11

Execution Copy

PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY

dated as of

November 20, 2008

among

RFC ASSET HOLDINGS II, LLC,

PASSIVE ASSET TRANSACTIONS, LLC

and certain of their Affiliates from time to time parties hereto,

as Grantors

and

GMAC LLC, as Lender Agent

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TABLE OF CONTENTS

 

          Page 1.    Definitions    1 2.    Grant of Security Interest by
Grantors    6 3.    Representations and Warranties    7 4.    Grantor Remains
Liable; Nature of Security Interest; Subrogation, etc.    10 5.    Collections,
etc    12 6.    Release    12 7.    Agreements of the Grantors    13 8.   
Agreement as to Investment Property; Voting    15 9.    Defaults and Events of
Default; Remedies    18 10.    Limitation on Duty in Respect of Collateral    21
11.    Special Provisions Relating to the Lender Agent    22 12.    General   
25 13.    Foreign Pledge Agreements    28

 

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PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY

THIS PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY (this “Agreement”)
dated as of November 20, 2008, is among RFC Asset Holdings II, LLC, a Delaware
limited liability company (“RAHI”), and Passive Asset Transactions, LLC, a
Delaware limited liability company (“PATI”; and together with RAHI, each a
“Borrower” and collectively, the “Borrowers”); Residential Capital, LLC, a
Delaware limited liability company (“ResCap”), Residential Funding Company, LLC,
a Delaware limited liability company (“RFC”), and GMAC Mortgage, LLC, a Delaware
limited liability company (“GMAC Mortgage”; and together with ResCap and RFC,
each herein a “Guarantor” and collectively, the “Guarantors”); and each other
Person that agrees to become a “Grantor” by executing and delivering a Joinder
Agreement pursuant to Section 12 (each Borrower, each Guarantor and each such
other Person, together with any successors and assigns, is herein a “Grantor”
and collectively, the “Grantors”); and GMAC LLC, a Delaware limited liability
company, as Lender Agent for the Lender Parties.

W I T N E S S E T H:

WHEREAS, pursuant to the Loan Agreement, dated as of the date hereof, among the
Borrowers, the Guarantors, and GMAC LLC, as Lender Agent and initial Lender, and
certain other financial institutions and Persons from time to time party thereto
as Lenders (as amended, supplemented, restated or otherwise modified from time
to time, the “Loan Agreement”), the Lenders thereunder have agreed to make loans
to the Borrowers;

WHEREAS, the Guarantors have pursuant to Article XI of the Loan Agreement
guaranteed all “Obligations” as defined in the Loan Agreement (each such
guaranty so made by a Guarantor, herein its “Guaranty”);

WHEREAS, as a requirement under the Loan Agreement and the making of the Loans
under the Loan Agreement, the Grantors are required to execute and deliver this
Agreement;

WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Agreement; and

WHEREAS, it is in the best interests of each Grantor to execute this Agreement
inasmuch as each Grantor will derive substantial direct and indirect benefits
from the Loans made from time to time to the Borrowers;

NOW, THEREFORE, for and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Borrowers and/or the Grantors
under or in connection with the Loan Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1. Definitions. When used herein and unless the context otherwise requires,
(a) capitalized terms which are not otherwise defined herein have the meanings
assigned to such terms in Schedule 1.01 to the Loan Agreement; (b) unless
otherwise defined herein, the terms Account, Account Debtor, Certificated
Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document,
Electronic Chattel Paper, Equipment, Financial Assets, Fixture, Goods,
Instrument, Inventory, Investment Property, Letter of Credit, Letter-of-Credit
Rights, Money, Payment

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Intangibles, Proceeds, Security, Security Entitlement, Securities Account,
Supporting Obligations and Uncertificated Security have the respective meanings
assigned thereto in Article 8 or Article 9 of the UCC (as defined below);
(c) the provisions of clauses (c) through (g) of Section 1.01 of the Loan
Agreement are hereby incorporated herein in their entirety; (d) all references
herein to Articles, Sections, Exhibits and Schedules herein shall refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement as the
same may be amended, supplemented, restated or otherwise modified from time to
time; and (d) the following terms have the following meanings (such definitions
to be applicable to both the singular and plural forms of such terms):

Bailment Collateral means any Collateral that has been physically delivered to
the Lender Agent pursuant to the Facility Documents, and for which the physical
possession of such Collateral by the Lender Agent (or its agent, designee or
bailee) acts to perfect or grant control over such Collateral to the Lender
Agent for purposes of the UCC.

Collateral means, with respect to any Grantor, all property and rights of such
Grantor in which a security interest is granted pursuant to the provisions of
this Agreement, including without limitation Sections 2 and 12.

Contribution Agreement means, as the case may be, (a) that certain Contribution
Agreement dated as of November 20, 2008, among ResCap, GMAC Residential Holding
Company, LLC, GMAC Mortgage, and PATI; or (b) that certain Contribution
Agreement dated as of November 20, 2008, among RAHI, PATI, RAHI A, LLC and PATI
A, LLC, in each case as the same may be amended, supplemented, restated or
otherwise modified from time to time; and Contribution Agreements means both of
them.

Distributions means all dividends of stock, membership interests or other
ownership interests, liquidating dividends, shares of stock resulting from (or
in connection with the exercise of) stock splits, reclassifications, warrants,
options, non-cash dividends, mergers, consolidations, and all other
distributions (whether similar or dissimilar to the foregoing) on or with
respect to any Pledged Share, Pledged Interest or other shares of capital stock,
member interest or other ownership interests or security entitlements in each
case constituting Collateral, but shall not include Dividends.

Dividends means cash dividends and cash distributions with respect to any
Pledged Share or any Pledged Interest made in the ordinary course of business
and not as a liquidating dividend.

First Savings Warehouse Agreement has the meaning ascribed to it in the Loan
Agreement.

First Savings Warehouse Facility Documents means the First Savings Warehouse
Agreement, the First Savings Warehouse Note and all other agreements, contracts,
documents and instruments evidencing or relating to the First Savings Warehouse
Note or the First Savings Warehouse Agreement.

First Savings Warehouse Note means that Promissory Note, dated as of April 1,
2005 and issued by First Savings Mortgage Corporation in favor of RFC, as the
same may be amended, supplemented, restated or otherwise modified from time to
time, and including any notes given in substitution or replacement therefor.

 

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Flume No. 8 Administration Agreement means the Administration Agreement among
the Flume No. 8 SPE, ResCap, GMAC-RFC Limited and the Flume No. 8 Security
Trustee dated as of November 14, 2008, as the same may be amended, supplemented,
restated or otherwise modified from time to time.

Flume No. 8 Bank Agreement means the Bank Agreement among the Flume No. 8 SPE,
GMAC-RFC Limited, Barclays Bank PLC and the Flume No. 8 Security Trustee dated
as of November 14, 2008, as the same may be amended, supplemented, restated or
otherwise modified from time to time, and together with any successor agreement
and any other agreement governing deposit accounts held in the name of the Flume
No. 8 SPE.

Flume No. 8 Deed of Assignment means the Deed of Assignment, dated as of
November 14, 2008, between ResCap and the Lender Agent, as the same may be
amended, supplemented, restated or otherwise modified from time to time.

Flume No. 8 Facility Documents means the Flume No. 8 Notes, the Flume No. 8
Security Documents and all other agreements, contracts, documents and
instruments evidencing or relating to the Flume No. 8 Notes or the Flume No. 8
Security Documents.

Flume No. 8 GIC Agreement means the Guaranteed Investment Contract among the
Flume No. 8 SPE, GMAC-RFC Limited, Barclays Bank PLC and the Flume No. 8
Security Trustee dated as of November 14, 2008, as the same may be amended,
supplemented, restated or otherwise modified from time to time, and together
with any successor agreement and any other agreement governing investments of
the Flume No. 8 SPE which is not a Flume No. 8 Bank Agreement.

Flume No. 8 Initial Note means that certain Secured Zero Coupon Discount Note of
Flume (No. 8) Limited dated as of November 14, 2008, constituted by and issued
pursuant to the Flume No. 8 Note Issuance Facility Deed.

Flume No. 8 Loan Sale and Purchase Agreement means the loan sale and purchase
agreement dated as of November 14, 2008 between the Flume No. 8 SPE, the Flume
No. 8 Sellers and the Flume No. 8 Security Trustee, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

Flume No. 8 Note means the Flume No. 8 Initial Note or any other note issued
from time to time under and in accordance with the Flume No. 8 Note Issuance
Facility Deed, as the same may be amended, supplemented, restated or otherwise
modified from time to time, and including any notes given in substitution or
replacement therefor; and Flume No. 8 Notes means, collectively, all of them.

Flume No. 8 Note Issuance Facility Deed means the note issuance facility deed
dated as of November 14, 2008 between Flume No. 8 SPE, ResCap and the Flume
No. 8 Security Trustee, as the same may be amended, supplemented, restated or
otherwise modified from time to time.

Flume No. 8 Related Security means all collateral securing obligations of the
Flume No. 8 SPE under the Flume No. 8 Notes and Flume No. 8 Facility Documents.

 

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Flume No. 8 Security Documents means the Flume No. 8 Notes, the Flume No. 8 Loan
Sale and Purchase Agreement, the Flume No. 8 Note Issuance Facility Deed, the
Flume No. 8 Administration Agreement, the Flume No. 8 Bank Agreement, the Flume
No. 8 GIC Agreement, the Flume No. 8 Deed of Assignment, and each and every
other document, agreement and deed entered into by ResCap, its Subsidiary and/or
the Flume No. 8 Security Trustee in connection with the purchase of certain
residential mortgage loans, the issuance of the Flume No. 8 Notes and creation
of security in respect of the Flume No. 8 Notes in favor of the Flume No. 8
Security Trustee, in each case, by the Flume No. 8 SPE, as all of the foregoing
may be amended, supplemented, restated or otherwise modified from time to time,
and in each case if and to the extent any of the foregoing evidence or relate to
the Flume No. 8 Notes.

Flume No. 8 Security Trustee means Deutsche Trustee Company Limited (in its
capacity as security trustee in respect of the Flume No. 8 Notes).

Flume No. 8 Sellers means GMAC-RFC Limited.

Flume No. 8 SPE means Flume (No. 8) Limited.

General Intangibles means, with respect to any Grantor, all of such Grantor’s
“general intangibles” as defined in the UCC and, in any event, includes (without
limitation) all of such Grantor’s licenses, franchises, tax refund claims,
guarantee claims, security interests and rights to indemnification.

Grantor is defined in the preamble.

Lender Parties shall have the meaning given such term in the Loan Agreement.

Non-Tangible Collateral means, with respect to any Grantor, collectively, such
portion of such Grantor’s Collateral that constitutes Accounts, Chattel Paper,
Deposit Accounts, Documents, General Intangibles, Payment Intangibles,
Investment Property, Letter-of-Credit Rights, Letters of Credit and Supporting
Obligations.

Obligations means the Obligations (as defined in the Loan Agreement).

Pledged Interest Issuer means each Person identified in Exhibit D of Schedule IV
hereto as a Pledged Interest Issuer.

Pledged Interests means (a) all member interests, general or limited partnership
interests or other ownership interests of any Pledged Interest Issuer described
in Exhibit D of Schedule IV hereto; and (b) all assets, rights or property
related to the foregoing (including, without limitation, all registrations,
certificates, articles or agreements governing or representing any such
interests; all options and other rights, contractual or otherwise, related to
such interests; and all Distributions, Dividends and other Property now or
hereafter received, receivable or otherwise distributed in respect of or in
exchange for any or all of such interests, in each case if and to the extent any
of the foregoing evidence or relate to the items described in clause
(a) hereof).

Pledged Note Issuer means each Person identified in Exhibit C of Schedule IV
hereto as the issuer of the Pledged Note identified opposite the name of such
Person.

 

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Pledged Note Lien means any and all liens or security interests securing the
obligation of a Pledged Note Issuer evidenced by the applicable Pledged Note,
and all collateral subject to such liens and security interests.

Pledged Notes means (a) all of the promissory notes described in Exhibit C of
Schedule IV hereto, as such promissory notes are amended, restated, modified or
supplemented from time to time, and any promissory note taken in extension or
renewal thereof or substitution therefor; and (b) all assets, rights or property
related thereto (including, without limitation, all instruments or agreements
governing or representing all or any of such notes; all rights, contractual or
otherwise, at any time existing with respect to such notes; and all
Distributions, Dividends and other Property now or hereafter received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such notes, in each case if and to the extent any of the foregoing evidence
or relate to the items described in clause (a) hereof).

Pledged Property means all Pledged Interests, all Pledged Notes, all Pledged
Shares, all other securities, all assignments of any amounts due or to become
due, all other instruments which are now being delivered by any Grantor to the
Lender Agent or may from time to time hereafter be delivered by any Grantor to
the Lender Agent for the purpose of pledge under this Agreement or any other
Facility Document.

Pledged Share Issuer means each Person identified in Exhibit B of Schedule IV
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.

Pledged Shares means (a) all shares of capital stock of any Pledged Share Issuer
identified in Exhibit B of Schedule IV hereto; and (b) all assets, rights or
property related thereto (including, without limitation, all registrations,
certificates, articles, or agreements governing or representing any such
interest; all options and other rights, contractual or otherwise, at any time
existing with respect to all or any of such shares; and all Distributions,
Dividends and other Property now or hereafter received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares, in each
case if and to the extent any of the foregoing evidence or relate to the items
described in clause (a) hereof).

Property means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.

Provident Warehouse Agreement has the meaning ascribed to it in the Loan
Agreement.

Provident Warehouse Facility Documents means the Provident Warehouse Agreement,
the Provident Warehouse Note and all other agreements, contracts, documents and
instruments evidencing or relating to the Provident Warehouse Agreement or the
Provident Warehouse Note.

Provident Warehouse Note means that Servicing Facility Promissory Note, dated as
of June 14, 2007, and issued by Provident Funding Associates, L.P. in favor of
RFC, as the same may be amended, supplemented, restated or otherwise modified
from time to time, and including any notes given in substitution or replacement
therefor.

 

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UCC means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that, as used in Section 10(a) hereof, “UCC” shall
mean the Uniform Commercial Code as in effect from time to time in any
applicable jurisdiction.

Underlying Documents has the meaning ascribed to it in the Loan Agreement.

Warehouse Agreement means, as the context may require, the First Savings
Warehouse Agreement or the Provident Warehouse Agreement; and Warehouse
Agreements means both of them.

Warehouse Facility Document means, as the context may require, a First Savings
Warehouse Facility Document or a Provident Warehouse Facility Document; and
Warehouse Facility Documents means both of them.

Warehouse Loans mean loans made by RFC pursuant to a Warehouse Agreement to the
borrower under such agreement.

2. Grant of Security Interest by Grantors. As security for the prompt payment in
full in cash and performance of all Obligations, each of the Grantors hereby
pledges to the Lender Agent for the benefit of the Lender Parties, and hereby
grants a continuing security interest to the Lender Agent for the benefit of the
Lender Parties in, all of each such Grantor’s right, title and interest, in, to,
and under, whether now or hereafter existing, owned or acquired and wherever
located and howsoever created, arising or evidenced, all of the following:

(a) all Pledged Shares of each Pledged Share Issuer identified in Exhibit B of
Schedule IV hereto and all assets, rights or property related thereto;

(b) (i) all Flume No. 8 Notes and all other Pledged Notes (including, without
limitation, the Flume No. 8 Initial Note, the First Savings Warehouse Note and
the Provident Warehouse Note), and (ii) all assets, rights or property related
thereto (including, without limitation, the Flume No. 8 Facility Documents, the
Warehouse Loans, the Warehouse Facility Documents and all Pledged Note Liens, if
and to the extent the foregoing evidence or relate to the Flume No. 8 Notes or
such other Pledged Notes);

(c) (i) all Pledged Interests (including, without limitation, the equity
interests owned by RAHI in RAHI A, LLC and by PATI in PATI A, LLC), and (ii) all
assets, rights or property related thereto;

(d) (i) all Dividends, Distributions, interest, and (ii) other payments and
rights, in each case if and to the extent evidencing or related to the Pledged
Shares, Pledged Notes and Pledged Note Liens, Pledged Interests, Flume No. 8
Facility Documents, Warehouse Loans or Warehouse Facility Documents;

(e) all Deposit Accounts, including, without limitation, all Deposit Accounts
identified on Exhibit A of Schedule IV, and all Property deposited or carried
therein or credited thereto, in each case if and to the extent related to any
Pledged Shares, Pledged Notes and Pledged Note Liens, Pledged Interests, Flume
No. 8 Facility Documents, Warehouse Loans or Warehouse Facility Documents,

 

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(f) all Securities Accounts including, without limitation, all Securities
Accounts identified on Exhibit A of Schedule IV, and all Property, including all
Investment Property and Financial Assets, deposited or carried therein or
credited thereto, and all permitted investments acquired with funds on deposit
in or carried in or credited to such Securities Accounts, in each case if and to
the extent related to any Pledged Shares, Pledged Notes and Pledged Note Liens,
Pledged Interests, Flume No. 8 Facility Documents, Warehouse Loans or Warehouse
Facility Documents;

(g) to the extent not included in the foregoing, the Contribution Agreements and
all other agreements, contracts, documents and instruments if and to the extent
evidencing or related to any Pledged Shares, Pledged Notes and Pledged Note
Liens, Pledged Interests, Flume No. 8 Facility Documents, Warehouse Loans or
Warehouse Facility Documents;

(h) (i) all books, records, writings, data bases, information and other property
relating to or evidencing any Pledged Shares, Pledged Notes and Pledged Note
Liens, Pledged Interests, Flume No. 8 Facility Documents, Warehouse Loans or
Warehouse Facility Documents, and (ii) all insurance policies, claims and/or
insurance proceeds arising out of the loss, nonconformity or any interference
with the use of, or any defect or infringement of rights in, or damage to, any
of the foregoing, in each case if and to the extent evidencing or related to any
Pledged Shares, Pledged Notes and Pledged Note Liens, Pledged Interests, Flume
No. 8 Facility Documents, Warehouse Loans or Warehouse Facility Documents;

(i) to the extent not included in the foregoing, all Accounts, Chattel Paper,
Commercial Tort Claims, Deposit Accounts, Documents, General Intangibles
(including Payment Intangibles), Goods, Instruments, Investment Property,
Letter-of-Credit Rights, Letters of Credit, Supporting Obligations, Money and
all other personal assets and property of any kind or description, in each case
if and to the extent related to any Pledged Shares, Pledged Notes and Pledged
Note Liens, Pledged Interests, Flume No. 8 Facility Documents, Warehouse Loans
or Warehouse Facility Documents; and

(j) all Proceeds, products, offspring, rents, issues, profits and returns of and
from, and all distributions on any of the foregoing.

3. Representations and Warranties.

(a) Each Grantor represents and warrants that:

(i) (A) except for the UCC financing statements amended by those UCC amendments
identified on Schedule X hereto, no financing statement (other than the UCC
financing statements filed in connection with the Contribution Agreements or any
other UCC financing statements which may have been filed on behalf of the Lender
Agent or in connection with Liens expressly permitted by the Loan Agreement
(“Permitted Liens”)) covering any of the Collateral will be on file in any
public office, and (B) upon the filing of the UCC amendments identified on
Schedule X hereto, no financing statement (other than the UCC financing
statements filed in connection with the Contribution Agreements or any other UCC
financing statements which may have been filed on behalf of the Lender Agent or
in connection with Permitted Liens) covering any of the Collateral will be on
file in any public office;

 

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(ii) such Grantor is and will be the lawful owner of all Collateral in which it
has rights, free of all Liens and claims whatsoever, other than the security
interest hereunder and Permitted Liens, with full power and authority to execute
and deliver this Agreement and perform such Grantor’s obligations hereunder, and
to subject the Collateral to the security interest hereunder and (ii) none of
the Collateral of such Grantor that constitutes Collateral is subject to any
Liens other than Permitted Liens;

(iii) all information with respect to the Collateral and Account Debtors set
forth in any schedule, certificate or other writing at any time heretofore or
hereafter furnished by such Grantor to the Lender Agent or any Lender Party is
and will be true and correct in all material respects as of the date specified
therein (or, if no date is so specified, as of the date furnished);

(iv) such Grantor’s true legal name as registered in the jurisdiction in which
such Grantor is organized or incorporated, jurisdiction of organization or
incorporation, federal employer identification number, organizational
identification number, if any, as designated by the state of its organization,
formation or incorporation, chief executive office and principal place of
business are as set forth on Schedule I hereto (and such Grantor has not
maintained its chief executive office and principal place of business at any
other location at any time after January 1, 2003 except as otherwise disclosed
in writing to the Lender Agent);

(v) each other location where such Grantor maintains a place of business is set
forth on Schedule II hereto or as otherwise disclosed in writing to the Lender
Agent;

(vi) except as disclosed on Schedule III hereto, such Grantor is not now known
and during the five years preceding the date hereof has not previously been
known by any trade name;

(vii) except as disclosed on Schedule III hereto, during the five years
preceding the date hereof such Grantor has not been known by any legal name
different from the one set forth on the signature page of this Agreement nor has
such Grantor been the subject of any merger or other corporate reorganization;

(viii) Schedule V hereto lists all Bailment Collateral that the Grantors are
required to deliver to the Lender Agent as of the Closing Date or as of such
later date on which an update or supplement to such Schedule is hereafter
delivered in accordance with the terms of this Agreement;

(ix) Schedule IX hereto contains a complete listing of all of such Grantor’s
Commercial Tort Claims in excess of $10,000,000 in value;

(x) such Grantor is a corporation, limited partnership or limited liability
company as specified in Schedule I hereto and is duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
formation or organization;

 

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(xi) the execution and delivery of this Agreement, the grant of the security
interest, proxy and other rights granted herein and the performance by such
Grantor of its obligations hereunder are within such Grantor’s corporate,
partnership or limited liability company powers, have been duly authorized by
all necessary corporate, partnership or limited liability company action, have
received all necessary governmental approvals (if any shall be required), and do
not and will not contravene or conflict with any provision of law or of the
charter or by-laws or other organizational documents of such Grantor or any
judgment, order or decree, which is binding upon such Grantor and will not cause
a breach, default or event of default under of any agreement, indenture,
instrument or other document to which such Grantor is a party;

(xii) this Agreement is a legal, valid and binding obligation of such Grantor,
enforceable in accordance with its terms, except that the enforceability of this
Agreement may be limited by bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);

(xiii) such Grantor has not performed any act which might prevent the Lender
Agent from enforcing the terms of this Agreement or which could limit the Lender
Agent in any such enforcement;

(xiv) no Collateral is in the possession of any Person (other than such Grantor
or a custodian, securities intermediary or account bank appointed by such
Grantor) asserting any claim thereto or security interest therein (other than
Permitted Liens), except that the Lender Agent or its designee or agents may
have possession of Collateral as contemplated pursuant to the Facility
Documents;

(xv) on or prior to the date hereof, (A) the Flume No. 8 Initial Note has been
contributed by ResCap to GMAC Residential Holding Company, LLC, from GMAC
Residential Holding Company, LLC to GMAC Mortgage, and from GMAC Mortgage to
PATI; (B) the GSAP Class A-1 Preference Shares have been contributed by RAHI to
RAHI A, LLC; and (C) the GSAP Class A-2 Preference Shares have been contributed
by PATI to PATI A, LLC;

(xvi) this Agreement creates a valid security interest in the Collateral,
securing the payment of the Obligations, and all filings and other actions
necessary to perfect and protect such security interest under the UCC have been
duly taken, and such security interest shall be a first priority security
interest as to all Collateral (except for Permitted Liens); provided that to the
extent that the Loan Agreement does not require a Deposit Account constituting
Collateral to be perfected under the UCC at the time of the making of the
representation in this clause (xvi), the representation in this clause
(xvi) shall not apply to such Deposit Account;

 

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(xvii) in the case of any Pledged Shares constituting Collateral, all of such
Pledged Shares when issued will be duly authorized and validly issued, fully
paid, and non-assessable, and constitute all of the issued and outstanding
shares of capital stock of each Pledged Share Issuer owned by the Grantor set
forth across from the name of such Pledged Share Issuer on Exhibit B of Schedule
IV hereto, except as otherwise set forth thereon;

(xviii) in the case of each Pledged Note and the Pledged Note Liens, all of such
Pledged Notes and Pledged Note Liens, if any, when issued will be duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default; and each
Pledged Note is issued by the Pledged Note Issuer so identified in Exhibit C to
Schedule IV and is owned by the Pledged Note Holder so identified in Exhibit C
to Schedule IV;

(xix) in the case of any Pledged Interests constituting Collateral, such Pledged
Interests constitute one hundred percent (100%) of the Grantor’s interest in the
Pledged Interest Issuer and the percentage of the total membership, partnership
or other equity interests in the Pledged Interest Issuer indicated on Exhibit D
of Schedule IV hereto, except as otherwise set forth thereon. The Pledged
Interests indicated on Exhibit D of Schedule IV hereto are duly registered in
the permanent ownership records of the respective Pledged Interests Issuer, and
such registration is maintained in the principal office of such issuer. Such
registration continues valid and genuine and has not been altered. All Pledged
Interests have been duly authorized and validly issued, are fully paid and
non-assessable, and were not issued in violation of the preemptive rights, if
any, of any Person or of any agreement by which any Grantor is bound. All
documentary, stamp or other taxes or fees owing in connection with the
registration, issuance, transfer or pledge of Collateral have been paid. No
restrictions or conditions exist with respect to the registration, transfer,
voting or pledge of any Pledged Interests (other than usual or customary
securities laws or ERISA restrictions). All requisite formalities for the
granting of a security interest in the Pledged Interests required pursuant to
the organizational documents of the Grantors or the Pledged Interest Issuer have
been complied with on or prior to the execution and delivery of this Agreement.
Each Grantor represents that, as of the date hereof, none of the Pledged
Interests is dealt with or traded on any securities exchange or in any
securities market; and

(xx) in the case of any Deposit Account identified in Exhibit A of Schedule IV
hereto, the only deposits that at any time will be made to such account will
consist of proceeds of the Pledged Shares identified on Exhibit B of Schedule IV
hereto or Pledged Notes identified on Exhibit C of Schedule IV hereto or Pledged
Interests identified on Exhibit D of Schedule IV hereto or of other Collateral
acceptable to the Lender Agent;

4. Grantor Remains Liable; Nature of Security Interest; Subrogation, etc.

(a) Anything herein to the contrary notwithstanding, (i) each Grantor shall
remain liable under the contracts and agreements included in the Collateral to
the extent set forth therein, and will perform all of its duties and obligations
under such contracts and agreements to the same extent as if this Agreement had
not been executed, (ii) the exercise by the Lender Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under any such contracts or agreements included in the Collateral, and
(iii) neither the Lender Agent nor any other

 

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Lender Party shall have any obligation or liability under any contracts or
agreements included in the Collateral by reason of this Agreement, nor shall the
Lender Agent nor any Lender Party be obligated to perform any of the obligations
or duties of any Grantor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.

(b) This Agreement shall in all respects be a continuing, absolute,
unconditional and irrevocable grant of security interest to the Lender Agent and
shall remain in full force and effect until all Obligations have been paid in
full in cash and all Commitments have terminated. All rights of the Lender
Parties and the security interests granted to the Lender Agent (for its benefit
and the benefit of each other Lender Party) hereunder, and all obligations of
the Grantors hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of (i) any lack of validity, legality or enforceability
of any Facility Document, (ii) the failure of any Lender Party (A) to assert any
claim or demand or to enforce any right or remedy against any Grantor or any
other Person under the provisions of any Facility Document or otherwise, or
(B) to exercise any right or remedy against any other guarantor of, or
collateral securing, any Obligations, (iii) any change in the time, manner or
place of payment of, or in any other term of, all or any part of the
Obligations, or any other extension, compromise or renewal of any Obligations,
(iv) any reduction, limitation, impairment or termination of any Obligations
(except until all Obligations have been paid in full in cash and all Commitments
have terminated) for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each
Grantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Obligations or otherwise, (v) any
amendment to, rescission, waiver, or other modification of, or any consent to or
departure from, any of the terms of any Facility Document, (vi) any addition,
exchange or release of any Collateral of the Obligations, or any surrender or
non-perfection of any Collateral, or any amendment to or waiver or release or
addition to, or consent to or departure from, any other guaranty held by any
Lender Party securing any of the Obligations, or (vii) any other circumstance
which might otherwise constitute a defense available to, or a legal or equitable
discharge of, any Grantor or any other Grantor, any surety or any guarantor.

(c) Until one year and one day after all Obligations have been paid in full in
cash and all Commitments have terminated, each Grantor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against any
Borrower, any other Grantor or any other Grantor that arise from the existence,
payment, performance or enforcement of such Grantor’s obligations under this
Agreement or any other Facility Document, including any right of subrogation,
reimbursement, exoneration or indemnification, any right to participate in any
claim or remedy of any Lender Party against any Borrower, any other Grantor or
any other Grantor or any Collateral which any Lender Party now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from any
Borrower, any Grantor or any other Grantor, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Grantor in
violation of the preceding sentence and the Obligations shall not have been
indefeasibly paid in full in cash or all Commitments have not been terminated,
then such amount shall be deemed to have been paid to such Grantor for the
benefit of, and held in trust for, the Lender Agent (on behalf of the Lender
Parties), and shall forthwith be paid to the Lender Agent to be credited and
applied upon the Obligations, whether matured or

 

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unmatured. Each Grantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Loan Agreement and
that the waiver set forth in this Section 4(c) is knowingly made in
contemplation of such benefits.

(d) Except as otherwise provided in the Loan Agreement, if any Lender Party may,
under applicable Requirements of Law, proceed to realize its benefits under this
Agreement or the other Facility Documents giving any Lender Party a lien upon
any Collateral, either by judicial foreclosure or by non-judicial sale or
enforcement, such Lender Party may, at its sole option, determine which of its
remedies or rights it may pursue without affecting any of its rights and
remedies under this Agreement. If, in the exercise of any of its rights and
remedies, any Lender Party shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Grantor or any
other Grantor or any other Person, whether because of any applicable
Requirements of Law pertaining to “election of remedies” or the like, each
Grantor hereby consents to such action by such Lender Party and waives any claim
based upon such action, even if such action by such Lender Party shall result in
a full or partial loss of any rights of subrogation that such Grantor might
otherwise have had but for such action by such Lender Party.

5. Collections, etc. Until such time during the existence of an Event of Default
as the Lender Agent shall notify such Grantor of the revocation of such power
and authority, each Grantor (a) will, at its own expense, endeavor to collect,
as and when due, all amounts due under any of the Non-Tangible Collateral,
including the taking of such action with respect to such collection as the
Lender Agent may reasonably request or, in the absence of such request, as such
Grantor may deem advisable; and (b) may grant, in the ordinary course of
business, to any party obligated on any of the Non-Tangible Collateral, any
rebate, refund or allowance to which such party may be lawfully entitled, and
may accept, in connection therewith, the return of Goods, the sale or lease of
which shall have given rise to such Collateral. The Lender Agent, however, may,
at any time that an Event of Default has occurred and is continuing, whether
before or after any revocation of such power and authority or the maturity of
any of the Obligations, notify any party obligated on any of the Non-Tangible
Collateral to make payment or otherwise render performance to or for the benefit
of the Lender Agent and enforce, by suit or otherwise the obligations of any
such party obligated on any Non-Tangible Collateral. In connection therewith,
the Lender Agent may surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby. Upon request
of the Lender Agent following the occurrence and during the continuation of an
Event of Default, each Grantor will, at its own expense, notify any party
obligated on any of the Non-Tangible Collateral to make payment to the Lender
Agent of any amounts due or to become due thereunder.

6. Release. Collateral shall from time to time be released from the security
interest created by this Agreement pursuant to and in accordance with the
provisions of the Loan Agreement. Upon any such release, the Lender Agent will,
at the Grantors’ joint and several expense, deliver to the relevant Grantor,
without any representations, warranties or recourse of any kind whatsoever, such
released Collateral held by the Lender Agent hereunder, and execute and deliver
to the Grantor such documents as such Grantor shall reasonably request to
evidence such release.

 

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7. Agreements of the Grantors. (a) Each Grantor:

(i) will execute and/or deliver such financing statements (or any equivalent
filings in the United Kingdom or any other jurisdiction) and other documents
(and pay the cost of filing or recording the same in all public offices
reasonably determined to be appropriate by the Lender Agent) and do such other
acts and things (including, without limitation, delivery to the Lender Agent of
any Instruments and Certificated Securities which constitute Collateral), all as
Lender Agent may from time to time reasonably request, to establish and maintain
a valid perfected security interest in the Collateral (free of all other liens,
claims and rights of third parties whatsoever, other than Permitted Liens) to
secure the payment of the Obligations (and each Grantor authorizes the Lender
Agent to file, without limitation, any financing statement (or any equivalent
filings in the United Kingdom or any other jurisdiction) that (i) indicates the
Collateral (x) as being of an equal or lesser scope or with greater detail, or
(y) in any manner that the Lender Agent in good faith deems to be an appropriate
or adequate description of the Collateral for purposes of perfection under the
UCC or for purposes of notice, and (ii) contains any other information required
by Section 5 of Article 9 of the UCC of the jurisdiction wherein such financing
statement is filed regarding the sufficiency or filing office acceptance of any
financing statement (or any equivalent filings in the United Kingdom), including
(x) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (y) in the case
of a financing statement (or any equivalent filings in the United Kingdom or any
other jurisdiction) filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates;

(ii) will keep all its records regarding Collateral at, and will not maintain
any place of business at any location other than, its address(es) shown on
Schedules I and II hereto or at such other addresses of which such Grantor shall
have given the Lender Agent not less than 30 days’ prior written notice;

(iii) will not change its state of organization or incorporation and will not
change its name, identity or corporate structure or its organizational
identification number for the state of its incorporation, formation or
organization, in each case such that any financing statement filed to perfect
Lender Agent’s interests under this Agreement would become seriously misleading,
unless such Grantor shall have given the Lender Agent not less than 30 days’
prior notice of such change (provided that this Section 7(a)(iii) shall not be
deemed authorize any change or transaction prohibited under the Loan Agreement)
and shall have taken or will timely take all action necessary to maintain
continued perfection and priority of the security interest created hereunder
following such change;

(iv) to the extent practicable, will keep its records concerning the Collateral
in such a manner as will enable the Lender Agent or its designees to determine
at any time the status of the Collateral;

(v) to the extent practicable, will furnish the Lender Agent such information as
is available to such Grantor concerning such Grantor, the Collateral and the
Account Debtors as the Lender Agent may from time to time reasonably request;

 

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(vi) will permit the Lender Agent and its designees, from time to time, on
reasonable notice and at reasonable times and intervals during normal business
hours (or at any time without notice if a Default has occurred and is
continuing) to inspect, audit and make copies of and extracts from all records
and all other papers in the possession of such Grantor pertaining to the
Collateral and the Account Debtors, and will, upon request of the Lender Agent
during the existence of a Default and to the extent practicable, deliver to the
Lender Agent all of such records and papers;

(vii) will not sell, lease or assign any Collateral except as permitted by the
Facility Documents or create or permit to exist any Lien on any Collateral other
than Permitted Liens;

(viii) agrees to provide or furnish to the Lender Agent at the Lender Agent’s
request, copies of such Grantor’s insurance policies and certificates
constituting any Collateral, and further agrees that if an Event of Default
shall have occurred and be continuing, the Lender Agent shall have the right
(and the Grantor hereby grants such right the Lender Agent) to direct such
Grantor or such Grantor’s insurance companies to apply all proceeds of insurance
constituting Collateral against the payment of the Obligations, whether or not
due, in such order of application as the Lender Agent may determine;

(ix) will keep all of the Collateral granted by such Grantor, Deposit Accounts
and Investment Property in the United States or at such other locations outside
of the United States as may be specified in writing to the Lender Agent or
consented to by the Lender Agent;

(x) will promptly notify the Lender Agent in writing upon incurring or otherwise
obtaining a Commercial Tort Claim constituting Collateral which is claiming
damages in excess of $10,000,000 (or any lesser amount specified in writing by
the Lender Agent, if a Default has occurred and is continuing) after the date
hereof against any third party, and concurrently therewith deliver to the Lender
Agent, in form and substance satisfactory to the Lender Agent, a supplement to
Schedule IX sufficiently identifying such Commercial Tort Claim for purposes of
Section 9-108 of the UCC;

(xi) will promptly notify the Lender Agent in writing upon becoming the
beneficiary under any letter of credit constituting Collateral in excess of
$10,000,000 (or any lesser amount specified in writing by the Lender Agent, if a
Default has occurred and is continuing) and, at the request of the Lender Agent,
pursuant to an agreement in form and substance satisfactory to the Lender Agent,
either (A) arrange for the issuer and any confirmer or other nominated person of
such letter of credit to consent to an assignment to the Lender Agent of such
letter of credit or (B) arrange for the Lender Agent to become the transferee
beneficiary of such letter of credit;

(xii) will promptly notify the Lender Agent in writing if such Grantor holds or
acquires an interest in any Electronic Chattel Paper constituting Collateral
and, at the request of the Lender Agent, take such action as the Lender Agent
may reasonably request to vest control, under Section 9-105 of the UCC, of such
Electronic Chattel Paper constituting Collateral in the Lender Agent;

 

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(xiii) acknowledges and agrees that it is not authorized to file any financing
statement in favor of the Lender Agent without the prior written consent of the
Lender Agent and that it will not do so without the prior written consent of the
Lender Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the
UCC;

(xiv) promptly deliver to the Lender Agent an appropriately updated Schedule V
within five business days (or such later time as consented to by the Lender
Agent) after additional Bailment Collateral has been pledged as collateral
pursuant to the terms of this Agreement;

(xv) will facilitate the realization of the Collateral and the exercise of all
powers, authorities and discretions vested by this Agreement in the Lender
Agent; and

(xvi) shall in particular promptly execute all transfers, conveyances,
assignments, assurances which the Lender Agent may reasonably request in order
to preserve or protect its interest in the Collateral.

Any expenses incurred in protecting, preserving or maintaining any Collateral
shall be borne jointly and severally by the Grantors. Notwithstanding the
foregoing, the Lender Agent shall have no obligation or liability regarding the
Collateral or any proceeds thereof by reason of, or arising out of, this
Agreement.

(b) ResCap promptly, but in no event later than three business days after the
earlier of the issuance of a new Flume No. 8 Note or the receipt of a written
request to do so by the Lender Agent, unless required to do earlier pursuant to
the terms of the Facility Documents or the Flume No. 8 Facility Documents, will
or will cause each such Flume No. 8 Note to be delivered to the Lender Agent in
accordance with Section 8(a).

8. Agreement as to Investment Property; Voting.

(a) All certificates or Instruments, if any, evidencing or constituting
Collateral, including any Pledged Property, shall be delivered to and held by or
on behalf of (and, in the case of the Pledged Notes, endorsed to the order of)
the Lender Agent pursuant hereto, shall be in suitable form for transfer by
delivery, and shall be accompanied by all necessary endorsements or instruments
of transfer or assignment, duly executed in blank.

(b) To the extent any of the Collateral constitutes a “certificated security”
(as defined in Section 8-102(a)(4) of the UCC), each Grantor shall take such
other actions as necessary to grant “control” (as defined in Section 8-106 of
the UCC) to the Lender Agent over such Collateral.

(c) To the extent any of its Collateral constitutes an “uncertificated security”
(as defined in Section 8-102(a)(18) of the UCC) with a Carrying Value of
$10,000,000 or more, each Grantor shall take and cause the appropriate Person
(including any issuer, entitlement holder or securities intermediary thereof) to
take all actions necessary to grant “control” (as defined in Section 8-106 of
the UCC) to the Lender Agent over such Collateral including, without limitation,
causing delivery of such Collateral or causing the issuer of such Collateral, as
appropriate, to agree to comply with the instructions originated by the Lender
Agent without further consent by the registered owner thereof;

 

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(d) To the extent any of its Collateral constitutes a “security entitlement” or
a “securities account” (as such terms are defined in Sections 8-102(a)(17) and
8-501(a), respectively, of the UCC), each Grantor shall take and cause the
appropriate Person (including any securities intermediary thereof) to take all
actions necessary to grant “control” (as defined in Section 8-106 of the UCC) to
the Lender Agent over such Collateral including, without limitation, causing to
be delivered to the Lender Agent an agreement, in form and substance
satisfactory to the Lender Agent, executed by the securities intermediary
thereof whereby such securities intermediary agrees (i) that it will comply with
entitlement orders originated by the Lender Agent without further consent by
such Grantor or any other Person with respect to all such Collateral (it being
understood that such agreement may provide that at all times when such
securities intermediary has not been notified by the Lender Agent to the
contrary, the securities intermediary may comply with entitlement orders of such
Grantor), (ii) to subordinate any security interest it may have in and to all
such Collateral to the security interest of the Lender Agent therein, and
(iii) that it will not agree with any Person other than the Lender Agent in any
manner that would grant such Person “control” over any such Collateral without
the Lender Agent’s prior written consent.

(e) Each Grantor will, from time to time upon the request of the Lender Agent,
promptly deliver to the Lender Agent such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Lender Agent, with respect
to the Collateral as the Lender Agent may reasonably request and will, from time
to time upon the request of the Lender Agent after the occurrence of any
Default, promptly transfer any Pledged Shares, Pledged Interests or other shares
of common stock, member interests or other ownership interests constituting
Collateral into the name of any nominee designated by the Lender Agent.

(f) Subject to clause (g) below, each Grantor will, at all times, keep pledged
to the Lender Agent, as the case may be, all Pledged Shares, Pledged Interests
and all other shares of capital stock, member interests or other ownership
interests constituting Collateral, and all securities, security entitlements and
securities accounts constituting Collateral, Dividends and Distributions with
respect thereto, all Pledged Notes, all interest, principal and other proceeds
received by the Lender Agent with respect to the Pledged Notes, all Pledged Note
Liens and all other Collateral and other securities, instruments, security
entitlements, financial assets, investment property, proceeds, and rights from
time to time received by or distributable to a Grantor in respect of any
Collateral.

(g) In the event that any Dividend or Distribution constituting Collateral is to
be paid on any Pledged Share or any Pledged Interest or any payment of principal
or interest is to be made on any Pledged Note at a time when no Event of Default
has occurred and is continuing, such Dividend, Distribution or payment may be
paid directly to the relevant Grantor. If any Event of Default has occurred and
is continuing, then any such Dividend, Distribution or payment shall be paid
directly to the Lender Agent in accordance with Section 8(h).

 

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(h) Each Grantor agrees:

(i) following the occurrence and during the continuance of any Event of Default,
promptly upon receipt thereof by any Grantor and without any request therefor by
the Lender Agent, to deliver (properly endorsed where required hereby or
requested by the Lender Agent) to the Lender Agent all Dividends, Distributions,
all interest, all principal, all other cash payments, and all proceeds of the
Collateral, all of which shall be held by the Lender Agent as additional
Collateral for use in accordance with Section 8(f);

(ii) after any Event of Default shall have occurred and be continuing, the
Lender Agent has notified the relevant Grantor of the Lender Agent’s intention
to exercise its voting power under this clause (ii), (A) the Lender Agent may
exercise (to the exclusion of such Grantor) the voting power and all other
incidental rights of ownership with respect to any Pledged Shares, Pledged
Interests or other shares of capital stock, member interests or other ownership
interests constituting Collateral, and EACH GRANTOR HEREBY GRANTS THE LENDER
AGENT AN IRREVOCABLE PROXY, EXERCISABLE UNDER SUCH CIRCUMSTANCES, TO VOTE SUCH
PLEDGED SHARES, SUCH PLEDGED INTERESTS AND SUCH OTHER COLLATERAL, WITH SUCH
PROXY TO REMAIN VALID UNTIL THE PAYMENT IN FULL IN CASH OF ALL OBLIGATIONS, THE
TERMINATION OR EXPIRATION OF ALL COMMITMENTS; and (B) promptly to deliver to the
Lender Agent such additional proxies and other documents as may be necessary to
allow the Lender Agent to exercise such voting power;

(i) All Collateral constituting Dividends, Distributions, interest, principal,
cash payments, and proceeds and all rights under the Flume No. 8 Note and the
Flume No. 8 Related Security which may at any time and from time to time be held
by a Grantor but which such Grantor is then obligated to deliver to the Lender
Agent, shall, until delivery to the Lender Agent, be held by such Grantor
separate and apart from its other property in trust for the Lender Agent. The
Lender Agent agrees that unless it has received written notice from any Lender
that an Event of Default shall have occurred and be continuing and the Lender
Agent shall have given the notice referred to in Section 8(h)(iii), such Grantor
shall have the exclusive voting power with respect to any shares of capital
stock, member interests or other ownership interest (including any of the
Pledged Shares or Pledged Interests) constituting Collateral, and the Lender
Agent shall, upon the written request of such Grantor, promptly deliver (at the
Grantors’ joint and several expense) such proxies and other documents, if any,
as shall be reasonably requested by such Grantor which are necessary to allow
such Grantor to exercise voting power with respect to any such share of capital
stock, member interests or other ownership interests (including any of the
Pledged Shares or Pledged Interests) constituting Collateral; provided, however,
that no vote shall be cast, or consent, waiver, or ratification given, or action
taken by any Grantor that could reasonably be expected to be adverse in any
material respect to the interests of the Lender Agent and the other Lender
Parties or be inconsistent with or violate any provision of the Loan Agreement
or any other Facility Document (including this Agreement).

 

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(j) No Grantor will, without the prior written consent of the Lender Agent:
(A) enter into any agreement amending, supplementing, or waiving in any material
respect any provision of any Pledged Note or any Pledged Note Lien (including
the underlying instrument pursuant to which such Pledged Note or Pledged Note
Lien is issued) or compromising or releasing or extending the time for payment
of any obligation of the maker thereof, (B) take or omit to take any action the
taking or the omission of that would result in any impairment or alteration of
any obligation of the maker of Pledged Note or Pledged Note Lien or other
instrument constituting Collateral, (C) permit the issuance of (x) any
additional equity interests of any Pledged Share Issuer or Pledged Interest
Issuer (unless immediately upon such issuance the same are pledged and delivered
to the Lender Agent pursuant to the terms hereof to the extent necessary to give
the Lender Agent a security interest after such issue in at least the same
percentage of such Grantor’s outstanding interests as before such issue),
(y) any securities or other ownership interests convertible voluntarily by the
holder thereof or automatically upon the occurrence or non-occurrence of any
event or condition into, or exchangeable for, any such shares or other ownership
interests, or (z) any warrants, options, contracts or other commitments
entitling any Person to purchase or otherwise acquire any such shares or other
ownership interests, or (D) enter into any agreement creating or otherwise
permit to exist, any restriction or condition upon the transfer, voting or
control of any Pledged Share or Pledged Interest that could reasonably be deemed
to be adverse to the Lender Parties. Each Grantor shall provide, or cause the
relevant Pledged Share Issuer or Pledged Interest Issuer to provide, the Lender
Agent with a copy of any amendment or supplement to, or modification or waiver
of, any term or provision of any of the organizational documents of such
relevant Pledged Share Issuer or Pledged Interest Issuer, provided that such
Grantor shall not enter into any such amendment, supplement, modification or
waiver of the organizational documents of such relevant Pledged Share Issuer or
Pledged Interest Issuer which could reasonably be expected to be adverse to the
interests of the Lender Parties. The Grantors covenant and agree that they shall
not consent to or permit (1) any Pledged Interest to be dealt with or traded on
any securities exchanges or in any securities market or (2) any Pledge Interest
Issuer to elect to have its Pledged Interests treated as a “security” under
Article 8 of the UCC unless the relevant Grantors have (I) caused such Pledged
Interest to be certificated and (II) delivered all certificates evidencing such
Pledged Interest to the Lender Agent, together with duly executed undated blank
transfer powers, or other equivalent instruments of transfer acceptable to the
Lender Agent.

(k) Each Grantor shall take such actions such that its Collateral consisting of
Pledged Interests and Pledged Shares at all times shall be duly authorized,
validly registered, fully paid and non-assessable, and shall not be registered
in violation of the organic documents of the Grantors or the preemptive rights
of any Person, if any, or of any agreement by which the Grantors or any Pledged
Share Issuer or Pledged Interest Issuer is bound.

9. Defaults and Events of Default; Remedies.

(a) Each Grantor hereby irrevocably appoints the Lender Agent its
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuation of a Default (in the case of a breach of
Section 8(h)) or an Event of Default, to take any action and to execute any
instrument which the Lender Agent may request to accomplish the purposes of this
Agreement, including (i) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral, (ii) to receive, endorse,

 

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and collect any drafts or other Collateral in connection with clause (i) above,
(iii) to file any claims or take any action or institute any proceedings which
the Lender Agent may request for the collection of any of the Collateral or
otherwise to enforce the rights of the Lender Agent and the other Lender Parties
with respect to any of the Collateral, and (iv) to perform the affirmative
obligations of such Grantor hereunder. EACH GRANTOR HEREBY ACKNOWLEDGES,
CONSENTS AND AGREES THAT THE POWER OF ATTORNEY GRANTED PURSUANT TO THIS SECTION
9 IS IRREVOCABLE AND COUPLED WITH AN INTEREST AND SHALL BE EFFECTIVE UNTIL ALL
OBLIGATIONS HAVE BEEN PAID IN FULL IN CASH AND ALL COMMITMENTS HAVE TERMINATED.

(b) If an Event of Default shall have occurred and be continuing, in addition to
its rights in the foregoing clause (a) and without limiting the generality of
such clause, the Lender Agent may exercise from time to time any rights and
remedies available to it under the UCC, under any other applicable Requirements
of Law and in the clauses (c) through (g) set forth below in this Section 9.

(c) Each Grantor agrees, at the Lender Agent’s request if a Default has occurred
and is continuing, to assemble, at its expense, all its Inventory and other
Goods (other than Fixtures) constituting Collateral and all records for all
Collateral at a convenient place or places acceptable to the Lender Agent.

(d) Notice of the intended disposition of any Collateral may be given by
first-class mail, hand-delivery (through a delivery service or otherwise),
facsimile or E-mail, and shall be deemed to have been “sent” upon deposit in the
U.S. mails with adequate postage properly affixed, upon delivery to an express
delivery service, upon the electronic submission through telephonic services or,
if by facsimile transmission, when sent against mechanical confirmation of
successful transmission, as applicable. Each Grantor hereby agrees and
acknowledges that: (i) with respect to Collateral that is (A) perishable or
threatens to decline speedily in value or (B) is of a type customarily sold on a
recognized market, no notice of disposition need be given; and (ii) with respect
to Collateral not described in clause (i) above, notification sent after default
and at least ten days before any proposed disposition provides notice within a
reasonable time before disposition.

(e) Each Grantor hereby agrees and acknowledges that a commercially reasonable
disposition (i) made in the usual manner on any recognized market, (ii) at the
price current in any recognized market at the time of disposition or (iii) in
conformity with reasonable commercial practices among dealers in the type of
property subject to the disposition shall, in each case, be deemed commercially
reasonable.

(f) Any cash proceeds of any disposition by the Lender Agent of any of the
Collateral shall be applied by the Lender Agent, first, to payment of the Lender
Agent’s expenses in connection with the Collateral, including without
limitation, attorneys’ fees and legal expenses, and thereafter to the payment of
any and all of the Obligations in such order of application as the Lender Agent
may from time to time direct, and thereafter any surplus will be paid to the
applicable Grantor or as a court of competent jurisdiction shall direct. Neither
the Lender Agent nor any other Lender Party need apply or pay over for
application noncash proceeds of collection and enforcement unless (i) the
failure to do so would be commercially unreasonable and (ii) the applicable
Grantor has provided the Lender Agent with a written demand to apply or pay over
such noncash proceeds on such basis. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Lender Agent arising out of the exercise by the Lender Agent of any rights
hereunder.

 

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(g) [Reserved]

(h) If any Event of Default has occurred and is continuing, the Lender Agent may
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral) and also may, without notice except as specified below,
(or, if notice cannot be waived under the UCC, as required to be provided by the
UCC) sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Lender Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Lender Agent may
deem commercially reasonable. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days’ prior notice to such
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Lender
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Lender Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.

(i) If any Event of Default has occurred and is continuing, the Lender Agent may
transfer all or any part of the Collateral into the name of the Lender Agent or
its nominee, with or without disclosing that such Collateral is subject to the
lien and security interest hereunder, notify the parties obligated on any of the
Collateral to make payment to the Lender Agent of any amount due or to become
due thereunder, enforce collection of any of the Collateral by suit
or otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto, endorse any checks, drafts, or other writings in any Grantor’s name to
allow collection of the Collateral, take control of any proceeds of the
Collateral, and execute (in the name, place and stead of each Grantor)
endorsements, assignments, transfer powers and other instruments of conveyance
or transfer with respect to all or any of the Collateral.

(j) Each Grantor agrees that in any sale of any of the Collateral whenever an
Event of Default shall have occurred and be continuing, the Lender Agent is
hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel is necessary in order to avoid
any violation of applicable Requirements of Law (including compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and each Grantor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Lender Agent be liable nor accountable to the Grantors for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction. The Lender Agent may sell
the Collateral without giving any warranties or representations as to the
Collateral. The Lender Agent may disclaim any warranties of title or the like.
This procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

 

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10. Limitation on Duty in Respect of Collateral. Beyond the exercise of
reasonable care in the custody and preservation thereof, neither the Lender
Agent nor any other Lender Party will have any duty as to any Collateral in its
possession or control or in the possession or control of any sub-agent or bailee
or any income therefrom or as to the preservation of rights against prior
parties or any other rights pertaining thereto. The Lender Agent will be deemed
to have exercised reasonable care in the custody and preservation of the
Collateral in its possession or control if such Collateral is accorded treatment
substantially equal to that which it accords its own property, and will not be
liable or responsible for any loss or damage to any Collateral, or for any
diminution in the value thereof, by reason of any act or omission of any
sub-agent or bailee selected by the Lender Agent in good faith or by reason of
any act or omission by the Lender Agent pursuant to instructions from the Lender
Agent, except to the extent that such liability arises from the Lender Agent’s
gross negligence or willful misconduct.

To the extent that applicable law imposes duties on the Lender Agent to exercise
remedies in a commercially reasonable manner, each Grantor acknowledges and
agrees that it is commercially reasonable for the Lender Agent (a) to fail to
incur expenses reasonably deemed significant by the Lender Agent to prepare
Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (d) to
exercise collection remedies against Account Debtors and other Persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other Persons, whether or not in the
same business as the Grantors, for expressions of interest in acquiring all or
any portion of the Collateral, (g) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the collateral is of
a specialized nature, (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, including, without limitation,
any warranties of title, (k) to purchase insurance or credit enhancements to
insure the Lender Agent against risks of loss, collection or disposition of
Collateral, or to provide to the Lender Agent a guaranteed return from the
collection or disposition of Collateral or (l) to obtain the services of
brokers, investment bankers, consultants and other professionals to assist the
Lender Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section is to provide
non-exhaustive indications of what actions or omissions by the Lender Agent
would not be commercially unreasonable in the Lender Agent’s exercise of
remedies against the Collateral and that other actions or omissions by the
Lender Agent shall not be deemed commercially unreasonable solely on account of
not being specifically referred to in this Section. Without limitation upon the
foregoing, nothing contained in this Section shall be construed to grant any
right to a Grantor or to impose any duties on the Lender Agent that would not
have been granted or imposed by this Agreement or by applicable Requirements of
Law in the absence of this Section.

 

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11. Special Provisions Relating to the Lender Agent. In addition to the rights,
privileges and powers granted to the Lender Agent pursuant to Article XII of the
Loan Agreement, the Lender Agent shall also be granted the following rights,
powers, obligations and duties under this Agreement, notwithstanding anything
herein to the contrary:

(a) All indemnities to be paid under this Agreement shall be payable immediately
when due in U.S. dollars (“Dollars”) in the full amount due, without deduction
for any variation in any Rate of Exchange (as defined below). The Grantors
hereby agree to jointly and severally indemnify the Lender Agent against any
losses, damages, penalties, costs, expenses or disbursements of any kind or
nature whatsoever, including, without limitation, attorney’s fees and expenses,
incurred by the Lender Agent as a result of any judgment or order being given or
made for the amount due hereunder and such judgment or order being expressed and
paid in a currency (the “Judgment Currency”) other than Dollars and as a result
of any variation as between (i) the rate of exchange at which the dollar amount
is converted into Judgment Currency for the purpose of such judgment or order,
and (ii) the Rate of Exchange at which the Lender Agent is then able to purchase
Dollars with the amount of the Judgment Currency actually received by the Lender
Agent. The indemnity set forth in this paragraph shall constitute a separate and
independent obligation of the Grantors and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term “Rate
of Exchange” means the rate at which the Lender Agent is able to purchase
Dollars with the Judgment Currency on the foreign exchange market on the
relevant date and shall include any premiums and other reasonable costs of
exchange payable in connection with the purchase or, or conversion into, the
relevant currency. The indemnification set forth in this Section 14 shall
survive the termination or assignment of this Agreement and Irrevocable Proxy
and the resignation or removal of the Lender Agent.

(b) The Lender Agent may execute any of its duties under this Agreement or any
of the Facility Documents by or through agents, experts or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Lender Agent shall not be responsible for the negligence or
misconduct of any agents, experts or attorneys-in-fact selected by it in good
faith.

(c) Beyond the exercise of reasonable care in the custody thereof and except as
otherwise specifically stated in this Agreement or any of the Facility
Documents, the Lender Agent shall have no duty as to any of the Collateral in
its possession or control or in the possession or control of any agent or bailee
or as to preservation of rights against prior parties or any other rights
pertaining thereto.

(d) The Lender Agent shall be authorized to but shall not be responsible for
filing any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
monitoring or maintaining the perfection of any security interest in the
Collateral. It is expressly agreed, to the maximum extent permitted by
applicable law, that the Lender Agent shall have no responsibility for

 

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(i) taking any necessary steps to preserve rights against any Person with
respect to any Collateral or (ii) taking any action to protect against any
diminution in value of the Collateral, but, in each case (A) subject to the
requirement that the Lender Agent may not act or omit to take any action if such
act or omission would constitute gross negligence, bad faith or willful
misconduct and (B) the Lender Agent may do so and all expenses reasonably
incurred in connection therewith shall be part of the Obligations.

(e) The Lender Agent shall not be liable or responsible for any loss or
diminution in the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Lender Agent in good faith, except to the extent of the Lender Agent’s gross
negligence or willful misconduct.

(f) The Lender Agent shall not be responsible for, nor incur any liability with
respect to, (i) the existence, genuineness or value of any of the Collateral or
for the validity, perfection, priority or enforceability of the security
interest in any of the Collateral, whether impaired by operation of law or by
reason of any action or omission to act on its part under this Agreement or any
of the Facility Documents, except to the extent such action or omission
constitutes gross negligence, bad faith or willful misconduct on the part of the
Lender Agent, (ii) the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, (iii) the validity of the title of
the Grantors to the Collateral, (iv) insuring the Collateral or (v) the payment
of taxes, charges or assessments upon the Collateral or otherwise as to the
maintenance of the Collateral

(g) Notwithstanding anything in this Agreement or any of the Facility Documents
to the contrary, (i) in no event shall the Lender Agent or any officer,
director, employee, representative or agent of the Lender Agent’ be liable under
or in connection with this Agreement or any of the Facility Documents for
indirect, special, incidental, punitive or consequential losses or damages of
any kind whatsoever, including but not limited to lost profits or loss of
opportunity, whether or not foreseeable, even if the Lender Agent has been
advised of the possibility thereof and regardless of the form of action in which
such damages are sought; and (ii) the Lender Agent shall be afforded all of the
rights, powers, immunities and indemnities set forth in this Agreement in all of
the Facility Documents to which it is a signatory as if such rights, powers,
immunities and indemnities were specifically set out in each such Facility
Document. In no event shall the Lender Agent be obligated to invest any amounts
received by it hereunder.

(h) The Lender Agent shall be entitled conclusively to rely, and shall be fully
protected in relying, upon any note, writing, resolution, request, direction,
certificate, notice, consent, affidavit, letter, cablegram, telegram, telecopy,
email, telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and/or upon advice
and/or statements of legal counsel, independent accountants and other experts
selected by the Lender Agent and need not investigate any fact or matter stated
in any such document. Any such statement of legal counsel shall be full and
complete authorization and protection in respect of any action taken or suffered
by it hereunder in accordance therewith.

 

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(i) Notwithstanding that the Lender Agent is appointed by and acting for and at
the direction of the Lender Parties, the Grantors will jointly and severally pay
upon demand to the Lender Agent the amount of any and all reasonable fees and
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel, that the Lender Agent may incur in connection with (i) the negotiation,
performance or administration of this Agreement and the Facility Documents to
which it is a party, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement (whether through negotiations, legal proceedings or
otherwise) of any of the rights of the Lender Agent or the other Lender Parties
hereunder or under the Facility Documents or (iv) the failure by the Grantors to
perform or observe any of the provisions hereof or of any of the Facility
Documents. The provisions of this section shall survive the termination of this
Agreement and resignation or removal of the Lender Agent. The expenses of the
Lender Agent incurred in connection with actions undertaken as provided in this
Section 11 shall be payable jointly and severally by the Grantors to the Lender
Agent upon demand therefore (which demand shall be accompanied by an appropriate
invoice).

(j) The Grantors, jointly and severally, agree to indemnify each of the Lender
Agent and its officers, directors, employees, agents or attorneys-in-fact
(collectively, the “Indemnified Parties”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, attorneys’ fees and expenses) or
disbursements of any kind whatsoever which may at any time be imposed on,
incurred by or asserted against any Indemnified Party in any way relating to or
arising out of this Agreement or the Facility Documents; provided that the
Grantors shall not be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent that any of the foregoing result from
any such Indemnified Party’s gross negligence or willful misconduct as
determined by a court of competent jurisdiction beyond all applicable appeals.

(k) Neither the Lender Agent, any Lender Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Grantors or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Lender Agent hereunder are solely to protect the Lender Agent’s
and the Lender Parties’ interests in the Collateral and shall not impose any
duty upon the Lender Agent to exercise any such powers. The Lender Agent shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Grantors for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

(l) Pursuant to any applicable law, the Grantors authorize the Lender Agent
without obligation to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signatures of the Grantors in such form and in such offices as the Lender Agent
determines appropriate to perfect the security interests of the Lender Agent
under this Agreement. The Grantors

 

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hereby ratify and authorize the filing by the Lender Agent of any financing
statement with respect to the Collateral made prior to the date hereof.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, in no event shall the Lender Agent have any duty or obligation to
monitor the perfection, continuation of perfection or the sufficiency or
validity of any security interest in or related to the Collateral or to prepare
or file any Uniform Commercial Code financing statement or continuation
statement.

(m) Any corporation into which the Lender Agent may be merged, or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Lender Agent shall be a party, shall become a Lender
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of the parties hereto.

12. General.

If either (a) at the option of the relevant Grantor or as required pursuant to
the Facility Documents, a Grantor shall cause any Subsidiary that is not a
Grantor to become a Grantor hereunder, or (b) a Person who is not a Grantor
elects or agrees to become a Grantor hereunder, such Subsidiary or Person shall
execute and deliver to the Lender Agent a joinder agreement substantially in the
form of Schedule VII with such other changes as may be acceptable to the Lender
Agent (each a “Joinder Agreement”) and shall thereafter for all purposes be a
party hereto and have the same rights and obligations as a Grantor party hereto
on the Closing Date. In addition, to the extent that any Grantor delivers or
pledges (or intends to deliver or pledge) Collateral that has not theretofore
been delivered or pledged hereunder, such Grantor shall deliver or caused to be
delivered to the Lender Agent a notice in the form attached hereto as Schedule
VIII. Upon the request of the Lender Agent, the Grantors agree to deliver or
cause to be delivered to the Lender Agent, opinions of external and/or in-house
counsel for the relevant Grantor, in form and substance reasonably satisfactory
to the Lender Agent and at the Grantors’ joint and several expense, in
connection with any such Joinder Agreement or additional provision of
collateral.

Each Grantor agrees that a carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement. The Grantors hereby ratify
their authorization contained in Section 7(a)(i) for the Lender Agent to have
filed in any Uniform Commercial Code jurisdiction prior to the date hereof any
financing statement or amendment thereto filed prior to the date hereof.

All notices hereunder shall be in writing (including facsimile transmission) and
shall be sent, in the case of any Grantor, to the address of such Grantor shown
on Schedule VI hereto and, in the case of the Lender Agent, at its address set
forth on Schedule VI, or to such other address as such party may, by written
notice received by the other parties, have designated as its address for such
purpose. Notices sent by facsimile transmission or e-mail shall be deemed to
have been given when sent against mechanical confirmation of successful
transmission; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery or overnight courier shall be deemed
to have been given when received.

 

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Each of the Grantors agrees to pay, jointly and severally, all fees and
expenses, including reasonable attorneys’ fees, paid or incurred by the Lender
Agent in endeavoring to collect all or any portion of the Obligations of any
Grantor and in enforcing this Agreement against any Grantor, and all such fees
and expenses shall constitute Obligations.

No delay on the part of the Lender Agent in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Lender Agent of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy.

This Agreement shall remain in full force and effect until all Obligations have
been paid in full in cash and all Commitments have terminated. If at any time
all or any part of any payment theretofore applied by the Lender Agent or any
Lender Party to any of the Obligations is or must be rescinded or returned by
the Lender Agent or such Lender Party for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of any
Grantor), such Obligations shall, for the purposes of this Agreement, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by the Lender Agent or
such Lender Party, and this Agreement shall continue to be effective or be
reinstated, as the case may be, as to such Obligations, all as though such
application by the Lender Agent or such Lender Party had not been made.

Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable Requirements of Law, but if
any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. Consistent with the foregoing,
and notwithstanding any other provision of this Agreement to the contrary, in
the event that any action or proceeding is brought in whatever form and in
whatever forum seeking to invalidate any Grantor’s obligations under this
Agreement under any fraudulent conveyance, fraudulent transfer theory, or
similar avoidance theory, whether under state or federal law, such Grantor (the
“Affected Person”), automatically and without any further action being required
of such Affected Person or any Lender Party, shall be liable under this
Agreement only for an amount equal to the maximum amount of liability that could
have been incurred under applicable law by such Affected Person under any pledge
to secure the Obligations (or any portion thereof) at the time of the execution
and delivery of this Agreement (or, if such date is determined not to be the
appropriate date for determining the enforceability of such Affected Person’s
obligations hereunder for fraudulent conveyance or transfer (or similar
avoidance) purposes, on the date determined to be so appropriate) without
rendering such a hypothetical pledge voidable under applicable Requirements of
Law relating to fraudulent conveyance, fraudulent transfer, or any other grounds
for avoidance (such highest amount determined hereunder being any such Affected
Person’s “Maximum Amount”), and not for any greater amount, as if the stated
amount of this Pledge Agreement as to such Affected Person had instead been the
Maximum Amount. This paragraph is intended solely to preserve the rights of
Lender Parties under this Agreement to the maximum extent not subject to
avoidance under applicable Requirements of Law, and neither any Affected Person
nor any other person or entity shall have any right or claim under this Section
with respect to the limitation described in this Agreement, except to the extent
necessary so that the obligations of any Affected Person under this Agreement
shall not be rendered voidable under applicable Requirements of Law. Without
limiting the generality of the foregoing, the determination of a Maximum Amount
for any Affected Person

 

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pursuant to the provisions of the second preceding sentence of this Section
shall not in any manner reduce or otherwise affect the obligations of any other
Grantor (including any other Affected Person) under the provisions of this
Agreement.

This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until all Obligations have been paid
in full in cash and all Commitments shall have terminated, (b) be binding upon
each Grantor and its successors, transferees and assigns, and (c) inure,
together with the rights and remedies of the Lender Agent hereunder, to the
benefit of the Lender Agent and each other Lender Party and its respective
successors, transferees and assigns. No Grantor may assign (unless otherwise
permitted under the terms of the Facility Documents) any of its obligations
hereunder without the prior written consent of the Lender Agent.

This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional Persons may become parties hereto by executing
and delivering to the Lender Agent a counterpart of this Agreement together with
supplements to the Schedules hereto setting forth all relevant information with
respect to such party as of the date of such delivery. Immediately upon such
execution and delivery (and without any further action), each such additional
Person will become a party to, and will be bound by all the terms of, this
Agreement.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (BUT WITH
REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY
ITS TERMS APPLIES TO THIS AGREEMENT).

EACH PARTY HEREBY REPRESENTS AND WARRANTS THAT IT HAS NO RIGHT TO IMMUNITY FROM
THE SERVICE OF PROCESS OR JURISDICTION OR ANY JUDICIAL PROCEEDINGS OF ANY
COMPETENT COURT OR FROM EXECUTION OF ANY JUDGMENT OR FROM THE EXECUTION OR
ENFORCEMENT THEREIN OF ANY ARBITRATION DECISION IN RESPECT OF ANY SUIT, ACTION,
PROCEEDING OR ANY OTHER MATTER ARISING OUT OF OR RELATING TO ITS OBLIGATIONS
UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO THE EXTENT
THAT ANY PARTY IS OR BECOMES ENTITLED TO ANY SUCH IMMUNITY WITH RESPECT TO THE
SERVICE OF PROCESS OR JURISDICTION OR ANY JUDICIAL PROCEEDINGS OF ANY COMPETENT
COURT, AND TO THE EXTENT PERMITTED BY LAW, IT DOES HEREBY AND WILL IRREVOCABLY
AND UNCONDITIONALLY AGREE NOT TO PLEAD OR CLAIM ANY SUCH IMMUNITY WITH RESPECT
TO ITS OBLIGATIONS OR ANY OTHER MATTER UNDER OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY CONSENTS TO PROCESS BEING
SERVED IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY
DOCUMENT DELIVERED PURSUANT HERETO BY THE MAILING OF A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO ITS
RESPECTIVE ADDRESS SPECIFIED AT THE TIME FOR NOTICES UNDER THIS AGREEMENT OR TO
ANY OTHER ADDRESS OF WHICH IT SHALL HAVE GIVEN WRITTEN OR ELECTRONIC NOTICE TO
THE OTHER PARTIES. THE FOREGOING SHALL NOT LIMIT THE ABILITY OF ANY PARTY HERETO
TO BRING SUIT IN THE COURTS OF ANY JURISDICTION.

EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY
JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.

This Agreement is a Facility Document, and may only be amended, waived or
otherwise modified by written agreement with the prior written consent of the
Lender Agent and the Borrowers; provided, however, that this Agreement may be
supplemented by Joinder Agreements duly executed by the Lender Agent and each
Grantor directly affected thereby and by updates or supplements to any
Schedules, Attachments or Annexes hereto delivered in accordance with this
Agreement.

13. Foreign Pledge Agreements.

(a) Notwithstanding anything to the contrary contained herein or in any other
Facility Document, in the event that any Collateral is also pledged to the
Lender Agent to secure the Obligations by any Grantor pursuant to any security,
pledge or similar agreement governed by foreign law (a “Foreign Pledge
Agreement”) and the provisions of such Foreign Pledge Agreement conflict with
the provisions of this Agreement, the applicable Grantor shall comply with the
provisions of such Foreign Pledge Agreement and shall not be deemed to have
breached any representation or covenant contained herein or in any other
Facility Document as a result thereof.

 

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(b) If Supporting Assets with respect to a Flume No. 8 Note are the subject of a
Collateral Disposition at a time when (x) the fair market value of such
Supporting Assets is less than (y) the Carrying Value thereof as of the Closing
Date (the difference between such amounts beings the “Adjustment Amount”); the
relevant Grantors shall be entitled, after consultation with the Lender Agent,
to reduce the outstanding principal balance of such Flume No. 8 Note by the
Adjustment Amount; provided that such Collateral Disposition complies with the
applicable requirements of the Loan Agreement. Without limiting the foregoing,
the relevant Grantors may reduce the outstanding principal balance of a Flume
No. 8 Note at any time with the written consent of the Lender Agent.

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first above written.

 

RFC ASSET HOLDINGS II, LLC, as Grantor By:  

/s/ Elizabeth T. Kelly

Name:   Elizabeth T. Kelly Title:   Assistant Treasurer

 

  S-1   Pledge and Security Agreement

--------------------------------------------------------------------------------

PASSIVE ASSET TRANSACTIONS, LLC,

as Grantor By:  

/s/ Elizabeth T. Kelly

Name:   Elizabeth T. Kelly Title:   Assistant Treasurer

 

  S-2   Pledge and Security Agreement

--------------------------------------------------------------------------------

RESIDENTIAL CAPITAL, LLC,

as Grantor By:  

/s/ James N. Young

Name:   James N. Young Title:   Chief Financial Officer

 

  S-3   Pledge and Security Agreement

--------------------------------------------------------------------------------

RESIDENTIAL FUNDING COMPANY, LLC,

as Grantor By:  

/s/ Elizabeth T. Kelly

Name:   Elizabeth T. Kelly Title:   Assistant Treasurer

 

  S-4   Pledge and Security Agreement

--------------------------------------------------------------------------------

GMAC MORTGAGE, LLC,

as Grantor By:  

/s/ Elizabeth T. Kelly

Name:   Elizabeth T. Kelly Title:   Assistant Treasurer

 

  S-5   Pledge and Security Agreement

--------------------------------------------------------------------------------

GMAC LLC, as Lender Agent By:  

/s/ David C. Walker

Name:   David C. Walker Title:   Group Vice President and Treasurer

 

  S-6   Pledge and Security Agreement

--------------------------------------------------------------------------------

SCHEDULE I

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

GRANTOR INFORMATION

RFC ASSET HOLDINGS II, LLC

Jurisdiction of Formation: Delaware

FEIN: 41-1984034

State organization ID number: 4189232

Chief Executive Office:

One Meridian Crossings, Suite 100

Minneapolis, MN 55423

Principal place of business:

3993 Howard Hughes Parkway

Suite 250

Las Vegas, NV 89169

PASSIVE ASSET TRANSACTIONS, LLC

Jurisdiction of Formation: Delaware

FEIN: 51-0404130

State organization ID number: 3306533

Chief Executive Office/Principal place of business:

1100 Virginia Drive

Fort Washington, PA 19034

RESIDENTIAL FUNDING COMPANY, LLC

Jurisdiction of Formation: Delaware

FEIN: 93-0891336

State organization ID number: 2059477

Chief Executive Office/Principal place of business:

One Meridian Crossings

Suite 100

Minneapolis, MN 55423-3940

--------------------------------------------------------------------------------

GMAC MORTGAGE, LLC

Jurisdiction of Formation: Delaware

FEIN: 23-1694840

State organization ID number: 4143873

Chief Executive Office/Principal place of business:

1100 Virginia Drive

Fort Washington, PA 19034-3200

RESIDENTIAL CAPITAL, LLC

Jurisdiction of Formation: Delaware

FEIN: 20-1770738

State organization ID number: 3821622

Chief Executive Office/Principal place of business:

One Meridian Crossings

Suite 100

Minneapolis, MN 55423-3940

--------------------------------------------------------------------------------

SCHEDULE II

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

ADDITIONAL PLACES OF BUSINESS

None.

--------------------------------------------------------------------------------

SCHEDULE III

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

TRADE NAMES; PRIOR LEGAL NAMES; MERGERS

 

1. Trade Names; Prior Legal Names

RFC ASSET HOLDINGS II, LLC

 

Prior Names:   RFC Asset Holdings II, Inc.

PASSIVE ASSET TRANSACTIONS, LLC

 

Prior Names:   Passive Asset Transactions, Inc.

RESIDENTIAL FUNDING COMPANY, LLC

 

Prior Names:  

Residential Funding Corporation

RFC Acquisition Corporation

GMAC MORTGAGE, LLC

 

Prior Names:   GMAC Mortgage Corporation

RESIDENTIAL CAPITAL, LLC

 

Prior Names:   Residential Capital Corporation

 

2. Mergers

GMAC MORTGAGE, LLC

On October 25, 2006, GMAC Mortgage, LLC merged with GMAC Mortgage Corporation.

--------------------------------------------------------------------------------

SCHEDULE IV

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

CERTAIN COLLATERAL

 

1. Deposit and Securities Accounts – see attached Exhibit A to this Schedule IV.

 

2. Pledged Shares – see attached Exhibit B to this Schedule IV.

 

3. Pledged Notes – see attached Exhibit C to this Schedule IV.

 

4. Pledged Interests – see attached Exhibit D to this Schedule IV.

--------------------------------------------------------------------------------

EXHIBIT A TO SCHEDULE IV

DEPOSIT AND SECURITIES ACCOUNTS

 

I. Deposit Accounts

 

Account Owner

  

Financial Institution

  

Account Number

  

Account Name

Residential Funding Company, LLC    JPMorgan Chase Bank, N.A.    646926915   
Residential Funding Company, LLC re: Provident Funding Assoc PSER Residential
Funding Company, LLC    Wachovia Bank, N.A.    2000045277618    Residential
Funding Company, LLC Warehouse Sales Proceeds

--------------------------------------------------------------------------------

II. Securities Accounts

 

Account Owner

  

Financial Institution

  

Account Number

  

Account Name

N/A

        

--------------------------------------------------------------------------------

EXHIBIT B TO SCHEDULE IV

PLEDGED SHARES

 

Pledged Share Issuer

  

Common Stock

  

Beneficial Owner

  

% of Shares Pledged

  

Authorized Shares

  

Outstanding Shares

     

N/A

                       

--------------------------------------------------------------------------------

EXHIBIT C TO SCHEDULE IV

PLEDGED NOTES

 

Pledged Note Issuer

 

Pledged Note

 

Pledged Note Holder

Flume (No. 8) Limited

  All Flume No. 8 Notes, including, without limitation, that certain Secured
Zero Coupon Discount Note of Flume (No. 8) Limited constituted by and issued
pursuant to the Note Issuance Facility Deed dated as of November 14, 2008, and
made between Flume (No. 8) Limited, Residential Capital, LLC and Deutsche
Trustee Company Limited.1   Passive Asset Transactions, LLC

Provident Funding Associates, L.P.

  Servicing Facility Promissory Note, dated as of June 14, 2007, and issued by
Provident Funding Associates, L.P. in favor of RFC   Residential Funding
Company, LLC

First Savings Mortgage Corporation

  Promissory Note, dated as of April 1, 2005 and issued by First Savings
Mortgage Corporation in favor of RFC   Residential Funding Company, LLC

 

1

The Secured Zero Coupon Discount Note was subsequently contributed to Passive
Asset Transactions, LLC, which will be the current holder of such note as of
November 20, 2008.

--------------------------------------------------------------------------------

EXHIBIT D TO SCHEDULE IV

PLEDGED INTERESTS

 

Pledged Interest Issuer

  

Interest

  

Grantor

  

% of Interests of Grantor Pledged

  

Type of Interests

  

Interests Owned by
Grantor

      RAHI A, LLC    Member interest    Member interest    RFC Asset Holdings
II, LLC    100% of RFC Asset Holdings II, LLC’s equity interest in RAHI A, LLC,
constituting 100% of all the member interest in RAHI A, LLC PATI A, LLC   
Member interest    Member interest    Passive Asset Transactions, LLC    100% of
Passive Asset Transactions, LLC’s equity interest in PATI A, LLC, constituting
100% of all the member interest in PATI A, LLC

--------------------------------------------------------------------------------

SCHEDULE V

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

BAILMENT COLLATERAL

First Savings Warehouse Note

Provident Warehouse Note

Flume No. 8 Initial Note

--------------------------------------------------------------------------------

SCHEDULE VI

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

NOTICE INFORMATION

The Grantors:

RAHI

RFC Asset Holdings II, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: John Peterson

Phone: (952) 857-7359

Fax: (952) 921-4230

Email: john.peterson@gmacrescap.com

With copy to:

Residential Capital, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: Tammy Hamzehpour, General Counsel

Phone: (952) 857-6415

Fax: (866) 572-7524

Email: Tammy.Hamzehpour@gmacrescap.com

--------------------------------------------------------------------------------

PATI

Passive Asset Transactions, LLC

1100 Virginia Drive

Fort Washington, PA 19034

Attention: John Peterson

Phone: (952) 857-7359

Fax: (952) 921-4230

Email: john.peterson@gmacrescap.com

With copy to:

Residential Capital, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: Tammy Hamzehpour, General Counsel

Phone: (952) 857-6415

Fax: (866) 572-7524

Email: Tammy.Hamzehpour@gmacrescap.com

RFC

Residential Funding Company, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: John Peterson

Phone: (952) 857-7359

Fax: (952) 921-4230

Email: john.peterson@gmacrescap.com

With copy to:

Residential Capital, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: Tammy Hamzehpour, General Counsel

Phone: (952) 857-6415

Fax: (866) 572-7524

Email: Tammy.Hamzehpour@gmacrescap.com

--------------------------------------------------------------------------------

GMAC MORTGAGE

GMAC Mortgage, LLC

c/o Residential Funding Company, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: John Peterson

Phone: (952) 857-7359

Fax: (952) 921-4230

Email: john.peterson@gmacrescap.com

With copy to:

Residential Capital, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: Tammy Hamzehpour, General Counsel

Phone: (952) 857-6415

Fax: (866) 572-7524

Email: Tammy.Hamzehpour@gmacrescap.com

RESCAP

Residential Capital, LLC

One Meridian Crossings

Suite 100

Minneapolis, MN 55423

Attn: Tammy Hamzehpour, General Counsel

Phone: (952) 857-6415

Fax: (866) 572-7524

Email: Tammy.Hamzehpour@gmacrescap.com

--------------------------------------------------------------------------------

The Lender Agent:

GMAC LLC

200 Renaissance Center

Detroit, MI 48265

Attn: David Walker, Group VP and Treasurer

Phone: (313) 656-5400

Fax: (313) 656-5401

Email: david.walker@gmacfs.com

With copy to:

William B. Solomon, VP and General Counsel

Phone: (313) 656-6128

Fax: (313) 656-6124

Email: William.b.solomon@gm.com

--------------------------------------------------------------------------------

SCHEDULE VII

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

Form of Joinder Agreement

This JOINDER AGREEMENT, dated as of                          , 20        , is
delivered pursuant to Section 12 of the Pledge and Security Agreement and
Irrevocable Proxy, dated as of November 20, 2008, among RFC Asset Holdings II,
LLC, Passive Asset Transactions, LLC, and certain of their Affiliates from time
to time parties thereto, as Grantors, and GMAC LLC, as Lender Agent (as amended,
supplemented, restated or otherwise modified from time to time, the “Pledge and
Security Agreement”). Capitalized terms used herein without definition are used
as defined in the Pledge and Security Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided
in Section 12 of the Pledge and Security Agreement, hereby becomes a party to
the Pledge and Security Agreement as a Grantor [that is a Guarantor] thereunder
with the same force and effect as if originally named as a Grantor [that is a
Guarantor] therein and, without limiting the generality of the foregoing, as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations,
hereby mortgages, pledges, assigns, transfers and hypothecates to the Lender
Agent for the benefit of the Lender Parties, and grants to the Lender Agent for
the benefit of the Lender Parties a lien on and security interest in, all of its
right, title and interest in, to and under the Collateral of the undersigned
described in Annex A hereto and expressly assumes all obligations and
liabilities of a Grantor [that is a Guarantor] thereunder. The undersigned
hereby agrees to be bound as a Grantor [that is a Guarantor] for the purposes of
the Pledge and Security Agreement.

The information set forth in Annex B hereto is hereby added to the information
set forth in Schedules [I through VI and IX] to the Pledge and Security
Agreement, and such Schedules are hereby deemed updated, supplemented and
modified hereby. By acknowledging and agreeing to this Joinder Agreement, the
undersigned hereby agrees that this Joinder Agreement may be attached to the
Pledge and Security Agreement and that the Collateral listed on Annex A to this
Joinder Amendment shall be and become part of the Collateral referred to or
described in Section 2 of the Pledge and Security Agreement and shall secure all
Obligations.

The undersigned hereby represents and warrants that each of the representations
and warranties contained in Section 3 of the Pledge and Security Agreement
applicable to it is true and correct on and as the date hereof as if made on and
as of such date.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR] By:  

 

Name:   Title:  

 

ACKNOWLEDGED AND AGREED

as of the date first above written:

GMAC LLC

as Lender Agent

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

ANNEX A

TO JOINDER AGREEMENT

Description of Collateral

As used in the Joinder Agreement to which this Annex A is attached, the
“Collateral” of the Grantor(s) executing this Joinder Agreement shall mean with
respect to each such Grantor:

All of such Grantor’s right, title and interest, in, to, and under, whether now
or hereafter existing, owned or acquired and wherever located and howsoever
created, arising or evidenced, all of the following:

[Describe new pledged collateral, which description should include the
provisions of Section 2(d)-(i) of the Security Agreement as they relate to the
new pledged collateral]

The Grantors shall, from time to time, execute and deliver to the Lender Agent,
as the Lender Agent may reasonably request, all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action as
the Lender Agent reasonably deems necessary or advisable to ensure a perfected
security interest in all or any portion of the Collateral.

--------------------------------------------------------------------------------

ANNEX B

TO JOINDER AGREEMENT

Updated Information to Schedules I-VI and IX

to Pledge and Security Agreement and Irrevocable Proxy

--------------------------------------------------------------------------------

SCHEDULE VIII

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

Form of Notice of Additional Collateral

This NOTICE, dated as of                          , 20        , is delivered
pursuant to Section 12 of the Pledge and Security Agreement and Irrevocable
Proxy, dated as of November 20, 2008, among RFC Asset Holdings II, LLC, Passive
Asset Transactions, LLC, and certain of their Affiliates from time to time
parties thereto, as Grantors, and GMAC LLC, as Lender Agent (as amended,
supplemented, restated or otherwise modified from time to time, the “Pledge and
Security Agreement”). Capitalized terms used herein without definition are used
as defined in the Pledge and Security Agreement.

By executing and delivering this Notice, the undersigned, as collateral security
for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, hereby mortgages,
pledges, assigns, transfers and hypothecates to the Lender Agent for the benefit
of the Lender Parties, and grants to the Lender Agent for the benefit of the
Lender Parties a lien on and security interest in, all of its right, title and
interest in, to and under the Collateral of the undersigned described in Annex A
hereto.

The undersigned hereby represents and warrants that each of the representations
and warranties contained in Section 3 of the Pledge and Security Agreement
applicable to it is true and correct on and as the date hereof as if made on and
as of such date.

The information set forth in Annex B hereto is hereby added to the information
set forth in Schedules [IV, V and IX] to the Pledge and Security Agreement, and
such Schedules are hereby deemed updated, supplemented and modified hereby. The
undersigned hereby agrees that the Collateral listed on Annex A to this Notice
shall be and become part of the Collateral referred to or described in Section 2
of the Pledge and Security Agreement and shall secure all Obligations.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Notice to be duly executed
and delivered as of the date first above written.

 

[GRANTOR] By:  

 

Name:   Title:  

 

ACKNOWLEDGED AND AGREED

as of the date first above written:

GMAC LLC

as Lender Agent

By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

ANNEX A

TO NOTICE

Description of Collateral

As used in the Notice to which this Annex A is attached, the “Collateral” of the
Grantor(s) executing this Notice shall mean with respect to each such Grantor:

All of such Grantor’s right, title and interest, in, to, and under, whether now
or hereafter existing, owned or acquired and wherever located and howsoever
created, arising or evidenced, all of the following:

[Describe new pledged collateral, which description should include the
provisions of Section 2(d)-(i) of the Security Agreement as they relate to the
new pledged collateral]

The Grantors shall, from time to time, execute and deliver to the Lender Agent,
as the Lender Agent may reasonably request, all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action as
the Lender Agent reasonably deems necessary or advisable to ensure a perfected
security interest in all or any portion of the Collateral.

--------------------------------------------------------------------------------

ANNEX B

TO NOTICE

Updated Information to Schedule IV-V and IX

to Pledge and Security Agreement and Irrevocable Proxy

--------------------------------------------------------------------------------

SCHEDULE IX

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

COMMERCIAL TORT CLAIMS

None.

--------------------------------------------------------------------------------

SCHEDULE X

TO PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

UCC-3 AMENDMENTS

1) Unfiled copy of a UCC-3 financing statement identifying “Passive Asset
Transactions, LLC” as debtor and “Wells Fargo Bank, N.A., as First Priority
Collateral Agent” as secured party;

2) Unfiled copy of a UCC-3 financing statement identifying “Passive Asset
Transactions, LLC” as debtor and “Wells Fargo Bank, N.A., as Second Priority
Collateral Agent” as secured party;

3) Unfiled copy of a UCC-3 financing statement identifying “Passive Asset
Transactions, LLC” as debtor and “Wells Fargo Bank, N.A., as Third Priority
Collateral Agent” as secured party;

4) Unfiled copy of a UCC-3 financing statement identifying “Passive Asset
Transactions, LLC” as debtor and “GMAC LLC” as secured party;

5) Unfiled copy of a UCC-3 financing statement identifying “RFC Asset Holdings
II, LLC” as debtor and “Wells Fargo Bank, N.A., as First Priority Collateral
Agent” as secured party;

6) Unfiled copy of a UCC-3 financing statement identifying “RFC Asset Holdings
II, LLC” as debtor and “Wells Fargo Bank, N.A., as Second Priority Collateral
Agent” as secured party;

7) Unfiled copy of a UCC-3 financing statement identifying “RFC Asset Holdings
II, LLC” as debtor and “Wells Fargo Bank, N.A., as Third Priority Collateral
Agent” as secured party;

8) Unfiled copy of a UCC-3 financing statement identifying “RFC Asset Holdings
II, LLC” as debtor and “GMAC LLC” as secured party;

9) Unfiled copy of a UCC-3 financing statement identifying “GMAC Mortgage, LLC”
as debtor and “Wells Fargo Bank, N.A., as First Priority Collateral Agent” as
secured party;

10) Unfiled copy of a UCC-3 financing statement identifying “GMAC Mortgage, LLC”
as debtor and “Wells Fargo Bank, N.A., as Second Priority Collateral Agent” as
secured party;

11) Unfiled copy of a UCC-3 financing statement identifying “GMAC Mortgage, LLC”
as debtor and “Wells Fargo Bank, N.A., as Third Priority Collateral Agent” as
secured party;

12) Unfiled copy of a UCC-3 financing statement identifying “GMAC Mortgage, LLC”
as debtor and “GMAC LLC” as secured party;

13) Unfiled copy of a UCC-3 financing statement identifying “Residential Funding
Company, LLC” as debtor and “Wells Fargo Bank, N.A., as First Priority
Collateral Agent” as secured party;

--------------------------------------------------------------------------------

14) Unfiled copy of a UCC-3 financing statement identifying “Residential Funding
Company, LLC” as debtor and “Wells Fargo Bank, N.A., as Second Priority
Collateral Agent” as secured party;

15) Unfiled copy of a UCC-3 financing statement identifying “Residential Funding
Company, LLC” as debtor and “Wells Fargo Bank, N.A., as Third Priority
Collateral Agent” as secured party;

16) Unfiled copy of a UCC-3 financing statement identifying “Residential Funding
Company, LLC” as debtor and “GMAC LLC” as secured party;

17) Unfiled copy of a UCC-3 financing statement identifying “Residential
Capital, LLC” as debtor and “Wells Fargo Bank, N.A., as First Priority
Collateral Agent” as secured party;

18) Unfiled copy of a UCC-3 financing statement identifying “Residential
Capital, LLC” as debtor and “Wells Fargo Bank, N.A., as Second Priority
Collateral Agent” as secured party;

19) Unfiled copy of a UCC-3 financing statement identifying “Residential
Capital, LLC” as debtor and “Wells Fargo Bank, N.A., as Third Priority
Collateral Agent” as secured party;

20) Unfiled copy of a UCC-3 financing statement identifying “Residential
Capital, LLC” as debtor and “GMAC LLC” as secured party;

21) Unfiled copy of a UCC-3 financing statement identifying “GMAC Residential
Holding Company, LLC” as debtor and “Wells Fargo Bank, N.A., as First Priority
Collateral Agent” as secured party;

22) Unfiled copy of a UCC-3 financing statement identifying “GMAC Residential
Holding Company, LLC” as debtor and “Wells Fargo Bank, N.A., as Second Priority
Collateral Agent” as secured party;

23) Unfiled copy of a UCC-3 financing statement identifying “GMAC Residential
Holding Company, LLC” as debtor and “Wells Fargo Bank, N.A., as Third Priority
Collateral Agent” as secured party;

24) Unfiled copy of a UCC-3 financing statement identifying “GMAC Residential
Holding Company, LLC” as debtor and “GMAC LLC” as secured party.