exv10w1






Exhibit 10.1




PARTICIPATION AGREEMENT




dated as of June 4, 2008




between




GMAC LLC, a Delaware limited liability company,




as Seller,




General Motors Corporation, a Delaware corporation,




as a Participant




and




Cerberus ResCap Financing LLC, a Delaware limited liability company,




as a Participant









 









 











TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 1.
	 	Definitions	 	 	1	 
	 
	Section 2.
	 	Sale of Participation	 	 	5	 
	 
	Section 3.
	 	Unconditional Obligation	 	 	6	 
	 
	Section 4.
	 	Additional Payments	 	 	6	 
	 
	Section 5.
	 	Maximum Participant Commitment	 	 	6	 
	 
	Section 6.
	 	Representations and Warranties	 	 	7	 
	 
	Section 7.
	 	Payments to Participant	 	 	7	 
	 
	Section 8.
	 	Subordination of Participations	 	 	8	 
	 
	Section 9.
	 	Administration	 	 	9	 
	 
	Section 10.
	 	Non-Recourse; Independent Investigation	 	 	10	 
	 
	Section 11.
	 	Expenses; Indemnity	 	 	11	 
	 
	Section 12.
	 	Taxes	 	 	12	 
	 
	Section 13.
	 	Reimbursement	 	 	12	 
	 
	Section 14.
	 	Set-off	 	 	12	 
	 
	Section 15.
	 	Nature of Interest	 	 	13	 
	 
	Section 16.
	 	Miscellaneous	 	 	13	 







 









 








PARTICIPATION AGREEMENT




     This PARTICIPATION AGREEMENT (this “Agreement”) dated as of June 4, 2008 is between
GMAC LLC, a Delaware limited liability company (the “Seller”), General Motors Corporation,
a Delaware corporation (“General Motors”), and Cerberus ResCap Financing LLC, a Delaware
limited liability company (“Cerberus Fund”, and together with General Motors, each a
“Participant” and collectively, the “Participants”).



RECITALS




     WHEREAS, pursuant to that certain Loan Agreement dated as of June 4, 2008 (the “Loan
Agreement”) by and among Residential Funding Company, LLC, a Delaware limited liability company
(“RFC”), GMAC Mortgage, LLC, a Delaware limited liability company (“GMAC Mortgage”
and together with RFC, each a “Borrower” and collectively, the “Borrowers”), and
Residential Capital, LLC, GMAC Residential Holding Company, LLC, GMAC-RFC Holding Company, LLC, and
Homecomings Financial, LLC, as guarantors, the Seller, as the Initial Lender, and GMAC LLC, as the
Lender Agent, and other Persons from time to time party thereto, the Seller has agreed to purchase
certain existing term loans made to Residential Capital, LLC and provide a revolving credit
facility to the Borrowers; and



     WHEREAS, to induce the Seller to enter into the Loan Agreement, each of the Participants, who
are the indirect owners of the Borrowers and who will obtain benefits from the making of the Loans
by the Seller to the Borrowers, has agreed to purchase a participation in the Loans under the Loan
Agreement upon the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
and intending to be legally bound, the Parties hereto agree as follows:



     Section 1. Definitions.



     (a) Capitalized terms used herein and not otherwise defined herein shall have the meanings
specified in the Loan Agreement. In addition, as used herein, the following capitalized terms
shall have the following respective meanings:



     “Additional Price” means, with respect to a Future Loan, either 51%, in the case of
Cerberus Fund, or 49%, in the case of General Motors, of the lesser of (a) the amount of such
Future Loan or (b) the amount by which the Outstanding Aggregate Loan Amount, after giving effect
to such Future Loan, would exceed the $2,750,000,000; provided, however, that for
the purposes of Section 4(b), each Participant’s Additional Price shall be the unused portion of
such Participant’s Maximum Participant Commitment.



     “Agreement” has the meaning given to it in the Preamble.



     “Borrower” has the meaning given to it in the Recitals.



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     “Business Day” means any day other than (a) a Saturday or Sunday, or (b) a day on
which banking institutions in the States of New York, Minnesota or Pennsylvania are required or
authorized by law to be closed.



     “Cerberus Fund” has the meaning given to it in the first Preamble.



     “Funded Participation Amount” for a Participant means, on any day, an amount equal to
(a) the Initial Price paid by such Participant, plus (b) the aggregate of the Additional Prices
paid by such Participant on or prior to such day pursuant to Section 4 to purchase its
Participation in the Loans, minus (c) the aggregate amount of principal payments with respect to
the Participation on or prior to such day pursuant to Section 7, Section 8 or
Section 14.



     “Future Loan” means each Loan made pursuant to the Loan Agreement after the Initial
Funding Date.



     “General Motors” has the meaning given to it in the Preamble.



     “GMAC Mortgage” has the meaning given to it in the Recitals.



     “Initial Funding Condition” means that the Outstanding Aggregate Loan Amount exceeds
$2,750,000,000.



     “Initial Funding Date” means June 16, 2008 or such other Business Day specified by the
Seller upon not less than one Business Day’s prior written notice to the Participants;
provided that the day so specified shall not be earlier than June 16, 2008 unless an Event
of Default shall have occurred; provided, further, that, unless an Event of Default
has occurred, at least one Business Day prior to the Initial Funding Date, the Seller shall
represent in writing that the Initial Funding Condition will be met on the Initial Funding Date
after giving effect to Loans to be made on such date;



     “Initial Price” means (a) with respect to Cerberus Fund, an amount equal to 51% of the
amount by which the Outstanding Aggregate Loan Amount on the Initial Funding Date, plus the
amount of any Loans to be made on such date, exceeds $2,750,000,000; provided that if an
Event of Default has occurred prior to the Initial Funding Date, such Initial Price shall equal
Cerberus Fund’s Maximum Participant Commitment, and (b) with respect to General Motors, an amount
equal to 49% of the amount by which the Outstanding Aggregate Loan Amount on the Initial Funding
Date plus the amount of any Loans to be made on such date, exceeds $2,750,000,00;
provided that if an Event of Default has occurred prior to the Initial Funding Date, such
Initial Price shall equal General Motors’ Maximum Participant Commitment. For the avoidance of
doubt, the Initial Price with respect to each of Cerberus Fund and General Motors shall not exceed
their respective Maximum Participant Commitment.



     “Lender” means a “Lender” as defined in the Loan Agreement.



     “Loan Agreement” has the meaning given to it in the Recitals.



     “Loans” means the “Loans” as defined in the Loan Agreement, and includes in each case
the Notes evidencing such Loans.



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     “Maximum Participant Commitment” means, as of any date: (a) with respect to Cerberus
Fund, an amount equal to $382,500,000; and (b), with respect to General Motors, an amount equal to
$367,500,000.



     “Obligors” means, collectively, the Borrowers and each guarantor, pledgor,
subordinator or other Person directly or indirectly obligated in respect of the Loans.



     “Overnight LIBOR” means, for any day, the London interbank offered rate for overnight
deposits in U.S. Dollars appearing on Reuters Screen LIBOR01 at approximately 11:00 a.m., London
time, on such day, as reported by Bloomberg Financial Markets Commodities News, or such page as may
replace Reuters Page LIBOR01, as determined by the Seller. In the event that such rate is not
available on any day which is a business day in London for any reason, then Overnight LIBOR with
respect to such day shall be determined by the Seller in a manner then customary in the market for
determining such rate. For a day that is not a business day in London, the Overnight Rate shall be
the rate determined as of the immediately preceding day for which such rate is reported.



     “Participant” has the meaning given to it in the Preamble.



     “Participant’s Account” means, with respect to a Participant, the account specified
for such Participant on Schedule 2, or such other account as such Participant may designate
in writing to the Seller from time to time.



     “Participant’s Interest Payment” means, with respect to each Interest Period (or
portion thereof) during which a Participant’s Funded Participation Amount is greater than zero
(including any Interest Period after the occurrence and during the continuation of an Event of
Bankruptcy), an amount equal to the sum of (a) interest accrued on such Funded Participation Amount
at a rate per annum equal to either (i) the LIBOR Rate for such Interest Period plus the Applicable
Margin or (ii) for any applicable portion of such Interest Period that the Borrowers were required
under the Facility Documents to pay interest at the Default Rate, the Default Rate for such
Interest Period, plus (b) such Participant’s Relative Percentage of interest accrued on the
Seller’s Percentage Interest of the Outstanding Aggregate Loan Amount at a rate per annum equal to
(i) the Applicable Margin minus 100 basis points plus (ii) for any portion of such Interest Period
that the Borrowers were required under the Facility Documents to pay interest at the Default Rate,
127 basis points, provided that in the case of any Interest Period after the occurrence and
during the continuation of an Event of Bankruptcy, the “Participant’s Interest Payment” for such
Interest Period shall be the product of (a) such amount as calculated above, multiplied by (b) a
percentage, the numerator of which is the amount of interest payments allowed on the Loans for such
Interest Period and the denominator of which is the amount of interest payments that are due and
payable under the Loan Agreement for such Interest Period.



     “Participant’s Share” means, with respect to a Participant and any Loan or payment, an
amount equal to such Participant’s Percentage Interest of the principal amount of such Loan or the
amount of such payment, as applicable.



     “Participation” has the meaning given to it in Section 2.



     “Party” means Cerberus Fund, General Motors or the Seller, as applicable.



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     “Percentage Interest” means, at any time with respect to a Participant, the number,
expressed as a decimal (expressed to three decimal places), equal to the fraction, (a) the
numerator of which is such Participant’s Funded Participation Amount, and (b) the denominator of
which is the Outstanding Aggregate Loan Amount.



     “Person” means any individual, corporation, estate, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock company, business
trust, trust, unincorporated organization, government or any agency or political subdivision
thereof, or other entity of a similar nature.



     “Purchase Price” means either the Initial Price or an Additional Price, as the context
requires.



     “Relative Percentage” means, at any time with respect to a Participant, the number,
expressed as a decimal (expressed to three decimal places), equal to the fraction, (a) the
numerator of which is such Participant’s Funded Participation Amount, and (b) the denominator of
which is the sum of the Funded Participation Amounts of both Participants.



     “RFC” has the meaning given to it in the Recitals.



     “Seller” has the meaning given to it in the Preamble.



     “Seller’s Account” means the account specified for the Seller on Schedule 2,
or such other account as the Seller may designate in writing to the Participants from time to time.



     “Seller’s Interest Payment” means (a) all interest accrued on the Loans prior to the
Initial Funding Date and (b) for each Interest Period or portion thereof on and after the Initial
Funding Date (including any Interest Period after the occurrence and during the continuation of an
Event of Bankruptcy), interest accrued on the Seller’s Percentage Interest of the Outstanding
Aggregate Loan Amount at a rate per annum equal to (i) the LIBOR Rate for such Interest Period plus
100 basis points plus (ii) for any portion of such Interest Period that the Borrowers were required
under the Facility Documents to pay interest at the Default Rate, 73 basis points, provided
that in the case of any Interest Period after the occurrence and during the continuation of an
Event of Bankruptcy, the “Seller’s Interest Payment” for such Interest Period shall be the product
of (a) such amount as calculated above, multiplied by (b) a percentage, the numerator of which is
the amount of interest payments allowed on the Loans for such Interest Period and the denominator
of which is the amount of interest payments that are due and payable under the Loan Agreement for
such Interest Period.



     “Seller’s Percentage Interest” means, at any time, (a) 100% minus (b) the sum of the
Percentage Interest for Cerberus Fund plus the Percentage Interest for General Motors.



     “Senior Interests” shall mean (a) the Seller’s Percentage Interest of the Outstanding
Aggregate Loan Amount, (b) the Seller’s Interest Payment, and (c) any fees or other amounts due and
payable now or in the future by the Borrowers to the Seller pursuant to the Facility Documents
(other than the portion of the Upfront Fee payable to the Participants pursuant to Section
2(b)), together with all costs and out-of-pocket expenses reasonably incurred by or on behalf
of the Seller



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in connection with the Facility Documents and the transactions contemplated thereby which have
not been paid or reimbursed by the Borrowers.




     “Subject Interest” has the meaning given to it in Section 14.



     “Withholding Tax” has the meaning given to it in Section 12.



     (b) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. This Agreement includes the Schedules attached hereto.
Unless otherwise stated in this Agreement, in the computation of a period of time from a specified
date to a later specified date, the word “from” means “from and including” and the words “to” and
“until” each means “to but excluding”. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to
have the same meaning and effect as the word “shall”. Unless the context requires otherwise
(i) any definition of or reference to any agreement, instrument or other document herein or any
statute, law, order, rule or regulation shall be construed as referring to such agreement,
instrument, other document, statute, law, order, rule or regulation as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, and (iv) all references herein to Sections and Schedules shall
be construed to refer to Sections of, and Schedules to, this Agreement. Section, Schedule and
other headings and captions are included solely for convenience of reference and are not intended
to affect the interpretation of any provisions of this Agreement.



     Section 2. Sale of Participation. (a) Subject to the terms and conditions set forth
in this Agreement, the Seller does hereby sell to each Participant, without recourse to or
representation or warranty whatsoever by the Seller (except to the extent expressly provided
herein), and each Participant does hereby acquire and assume, a participation (each, a
“Participation”) consisting of an undivided interest in the Seller’s right, title and
interest in, to and under the following: (i) each Loan, whether now existing or hereafter made, to
the extent of such Participant’s Percentage Interest, (ii) all accrued interest on the Loans, to
the extent of such Participant’s Interest Payment, (iii) the share of the Upfront Fee payable to
such Participant pursuant to Section 2(b), (iv) the amounts payable and obligations owed
under Sections 2.07(b), 2.07(c) and 3.02 of the Loan Agreement on account of increased costs,
reductions in rate of return, and taxes incurred by such Participant in connection with the
Participation, and (v) each of the following, to the extent of the Participation in the foregoing
interests described in clauses (i) through (iv): (A) the Facility Documents, including the
Guarantee; (B) all Collateral and other security or credit support of any kind; (C) all cash,
securities, or other property, and all setoffs and recoupments, received, applied, or effected by
or for the account of the Seller under the Loans and other extensions of credit under the Facility
Documents (whether for principal, interest, fees, reimbursement obligations, or otherwise) from and
after the Initial Funding Date, including all distributions obtained by or through redemption,
consummation of a plan of reorganization, restructuring, liquidation, or otherwise of either
Borrower, any Obligor or the Facility Documents, and all cash, securities, interest, dividends, and
other property that may be exchanged for, or distributed or collected with respect to, any of the



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foregoing but excluding reimbursement for Seller’s enforcement or Collateral maintenance
expenses; (D) all claims, suits, causes of action and any other right of the Seller (in its
capacity as a Lender), whether known or unknown, against the Borrowers, any other Obligor or any of
their respective affiliates, agents, representatives, contractors, advisors or any other Person
arising under or in connection with the Facility Documents or that is in any way based on or
related to any of the foregoing or the loan transactions governed thereby, including contract
claims, tort claims, statutory claims and all other claims at law or in equity related to the
rights and obligations sold and purchased pursuant to this Agreement; and (E) all proceeds of the
foregoing. As consideration for such participation, each Participant will pay to the Seller the
applicable Initial Price on the Initial Funding Date and will fund the amounts required to be
funded by it under Section 4 as and when due.




     (b) On the Closing Date, the Seller shall remit from the upfront fee received by the Seller
pursuant to the Loan Agreement $7,140,000 to Cerberus Fund and $6,860,000 to General Motors.



     Section 3. Unconditional Obligation.



     Subject to the other terms and conditions expressly set forth in this Agreement, each
Participant’s obligation to pay the Initial Price to the Seller on the Initial Funding Date and all
amounts required to be paid by it under Sections 4 and 14 shall be unconditional.
Each Participant hereby expressly acknowledges that its obligation to fund all amounts required to
be paid by it hereunder shall be unaffected by the existence of any Default or Event of Default
under the Loan Agreement.



     Section 4. Additional Payments.



     (a) The Seller shall notify each Participant promptly of its receipt of a notice from the
Borrowers requesting a Loan, specifying therein the amount and the date of such Loan and, on and
after the Initial Funding Date, the Initial Price or Additional Price, as the case may be, required
to be paid by such Participant to purchase its Participation in such Loan. If, after giving effect
to a Future Loan, the Outstanding Aggregate Loan Amount will exceed $2,750,000,000, then, not later
than 10:00 a.m. (New York City time) on the date specified for such Loan, each Participant shall
pay to the Seller, by deposit into the Seller’s Account, the Purchase Price of its Participation in
such Loan, in like currency and immediately available funds, without set-off, counterclaim or
deduction of any kind. The effectiveness of the sale of a Participation in a Loan to a Participant
shall be subject to receipt by the Seller of the Purchase Price from such Participant as provided
herein.



     (b) If an Event of Default shall occur and be continuing at a time when a Participant’s Funded
Participation Amount is less than its Maximum Participation Commitment, such Participant shall pay
to the Seller, within one Business Day following written demand from the Seller, an amount equal to
the unused portion of such Maximum Participation Commitment, as the Initial Price or Additional
Price, as the case may, for its Participation.



     Section 5. Maximum Participant Commitment. A Participant shall not be required to
make any payment of Purchase Price to the extent that after giving effect to such payment, such



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Participant’s Funded Participation Amount would exceed the Maximum Participant Commitment for
such Participant on such date.




     Section 6. Representations and Warranties. (a) Each Party represents and warrants to
the other Parties (as of the date hereof and as of the Initial Funding Date) that:




     (i) such Party (A) is duly organized and validly existing under the laws of its
jurisdiction of organization or incorporation, (B) is in good standing under such
laws and (C) has full power and authority to execute, deliver and perform its
obligations under this Agreement;




     (ii) such Party’s execution, delivery, and performance of this Agreement have
not resulted, and will not result, in a breach of any provision of (A) such Party’s
organizational documents, (B) any statute, law, writ, order, rule or regulation of
any governmental authority applicable to such Party, (C) any judgment, injunction,
decree or determination applicable to such Party or (D) any contract, indenture,
mortgage, loan agreement, note, lease or other instrument by which such Party may be
bound or to which any of the assets of such Party are subject; and




     (iii) (A) this Agreement (1) has been duly and validly authorized, executed, and
delivered by such Party and (2) constitutes the legal, valid, and binding obligation
of such Party, enforceable against such Party in accordance with its terms, except to
the extent that such enforceability may be limited by bankruptcy, insolvency, or
other similar laws of general applicability affecting the enforcement of creditors’
rights generally and by the court’s discretion in relation to equitable remedies; and
(B) no notice to, registration with, consent or approval of, or any other action by,
any relevant governmental authority or other Person is or will be required for such
Party to execute, deliver, and perform its obligations under this Agreement.



     (b) The Seller represents and warrants to each Participant (as of the date hereof and as of
each date that it sells a Participation to such Participant hereunder) that the Seller is the sole
legal and beneficial owner of, and has good title to, the Loans free and clear of any lien or
similar encumbrance.



     Section 7. Payments to Participant.



     (a) Subject to Section 8, upon receipt by the Seller of (i) any payment of principal
of any Loan, the Seller shall remit to each Participant its Participant’s Share of such payment
(determined as of the date that such payment is remitted to the Participant) and (ii) any payment
of accrued interest on any Loan, the Seller shall remit to each Participant its Participant’s
Interest Payment for the applicable Interest Period; provided that interest on any Loan
accrued prior to the Initial Funding Date shall be for the sole account of the Seller.



     (b) At a Participant’s request and to the extent contemplated by the Loan Agreement, the
Seller shall make demand on the Borrowers for payment on account of increased costs, break funding
payments or expenses incurred by such Participant in connection with the Participation and shall
promptly remit to such Participant all such payments as and when received. In addition, so long as
(i) a Participant has notified the Borrowers of its Participation and (ii) such Participant



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complies with its obligations under Section 12 and any similar provisions in the Loan
Agreement, the Seller shall promptly remit to such Participant an amount equal to any payment
received by the Seller from the Borrowers under the Loan Agreement on account of taxes incurred by
such Participant in connection with the Participation. To the extent required by the Loan
Agreement, the Participant hereby agrees, for the benefit of the Borrowers, to comply with the
provisions of Section 3.02 of the Loan Agreement.




     (c) All payments by the Seller to a Participant hereunder shall be made to such Participant’s
Account in like funds and currency as received by the Seller.



     (d) If a payment is received by the Seller not later than 12:00 noon (New York City time) on
any Business Day, the corresponding payment shall be made to the Participants not later than 5:00
p.m. (New York City time) on such day, and otherwise not later than 3:00 p.m. (New York City time)
on the immediately succeeding Business Day.



     (e) Nothing in this Agreement shall entitle a Participant to share in any fee or other payment
under the Facility Documents except as expressly set forth herein.



     (f) The Seller shall be entitled to deduct from payments to be made by it hereunder to a
Participant any overdue amount payable by such Participant to the Seller under this Agreement.



     Section 8. Subordination of Participations. Each Participant hereby irrevocably
agrees that, to the extent provided below in this Section 8, its rights to receive any
payment in respect of its Funded Participation Amount and its Participant’s Interest Payment shall
be subordinate and junior in right of payment to the prior payment of the Senior Interests in full
in cash:



     (a) Until such time as the Seller’s Percentage Interest in the Outstanding Aggregate Loan
Amount has been reduced to zero, the Seller shall retain all payments of principal with respect to
the Obligations and shall apply such payments to the Seller’s Percentage Interest in the
Outstanding Aggregate Loan Amount. If the Seller receives any payments of principal with respect
to the Loans at any time as the Seller’s Percentage Interest is zero, subject to Section
8(b), the Seller shall remit such payments to the Participants in accordance with Section
7.



     (b) If the Loans and other Obligations have been declared immediately due and payable at such
time as there shall have occurred and be continuing any Event of Default, then the Seller shall
distribute payments received under the Loan Agreement, to the extent of the funds available, in the
following order of priority:




     (i) to the Seller’s Percentage Interest in the Outstanding Aggregate Loan Amount until
the Seller’s Percentage Interest in the Outstanding Aggregate Loan Amount has been reduced
to zero;




     (ii) to the Seller’s Interest Payment until the accrued and unpaid amount of the
Seller’s Interest Payment has been paid in full;




     (iii) any fees or other amounts due and payable by the Borrowers to the Seller pursuant
to the Facility Documents, together with all costs and out-of-pocket expenses reasonably
incurred by or on behalf of the Seller in connection with the Facility Documents



8









 







and the transactions contemplated thereby until such amounts have been reimbursed or
paid in full;




     (iv) to each Participant, pro rata on the basis of the amounts owed under this
clause (iv), its Percentage Interest in the Outstanding Aggregate Loan Amount, until
such amount has been reduced to zero;




     (v) to each Participant, pro rata on the basis of the amounts owed under this
clause (v), its Participant’s Interest Payment until the accrued and unpaid amount
of its Participant’s Interest Payment has been paid in full; and




     (vi) to each Participant, pro rata on the basis of the amounts owed under this
clause (vi), any other amount due and payable to such Participant pursuant to its
Participation until such amounts have been paid in full.



     (c) In the event of any reorganization, arrangement, restructuring or liquidation of a
Borrower pursuant to any bankruptcy, insolvency or similar law, rule, regulation or order, the
Seller shall distribute payments received under the Loan Agreement according to Section 8(b). In
the event that the Seller receives any payments as adequate protection or for similar purposes in
any such proceedings involving either of the Borrowers, the Seller shall distribute such payments
according to Section 8(b).



     (d) Each Participant agrees that, in the event that it receives any payment on its
Participation in excess of the amount to which it is entitled under this Section 8, it will
hold such payments in trust for the Seller and promptly turn over such amounts to the Seller for
application to the Senior Interests.



     Section 9. Administration.



     (a) The Participations shall be reflected in the Seller’ books and records, which, in the
absence of manifest error, shall be presumed accurate with respect thereto.



     (b) Any payments received by or for the account of the Seller with respect to the Obligations
shall be applied to principal, interest, expenses or other amounts in the order and manner set
forth in the Facility Documents, or if the Facility Documents do not require application in
specific order or manner, as determined by the Seller in its sole discretion. Any application to
the Senior Interests may be made in such order as the Seller from time to time in its sole
discretion determines.



     (c) Each Participant agrees that the Seller may, in its sole discretion, exercise or refrain
from exercising any right, or take or refrain from taking any action, which the Seller may be
entitled to take or assert under any of the Facility Documents or otherwise with respect to the
obligations of the Borrowers, the Obligors, any other guarantor or grantor of liens or security
interests, or other party thereunder or the enforcement thereof, all without notice to the
Participants and, without limiting the generality of the foregoing, the Seller may take legal
action to enforce the Participants’ or the Seller’s interests with respect to any Loan or any of
the Facility Documents. In making and administering the Loans, the Seller shall exercise the same
care as it normally exercises with respect to loans or commitments in which no participations are
sold, but the Seller shall have no further



9









 




responsibility to the Participants except as expressly provided herein, and, except to the
extent its own gross negligence or willful misconduct results in actual loss to the Participants,
the Seller shall have no responsibility to the Participants for any action or failure to act by the
Seller under the Facility Documents or otherwise. Without limiting the foregoing, the Seller (i)
may (but is not obligated to) consult with legal counsel, independent public accountants,
appraisers and other experts reasonably selected by the Seller and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the advice of such
persons; (ii) shall be entitled to rely on, and shall incur no liability by acting upon, any
notice, consent, certificate, statement, order, or any instrument, document or other writing
(including, without limitation, facsimile, email or other telecommunication device) reasonably
believed by the Seller to be genuine and correct and to have been signed, sent, or made by the
proper person; and (iii) shall not be required to make any inquiry concerning the observance or
performance of any agreements contained in, or conditions of, the Facility Documents, or to inspect
the property, books or records of the Borrowers, the Obligors or their subsidiaries and affiliates.
Notwithstanding anything in the foregoing to the contrary, in any bankruptcy, insolvency or
similar proceeding affecting either Borrower, the Seller shall file a proof of claim for all
amounts owing under the Facility Documents in a timely manner and shall provide each Participant
with a reasonable opportunity (but in any event not less than five (5) Business Days) to comment on
such proof of claim prior to the filing thereof.




     (d) The Seller shall deliver to the Participants copies of each amendment, consent, waiver or
notice of default delivered in connection with the Facility Documents and such other documents
received by the Seller from the Borrowers under the Facility Documents that such Participant shall
request in writing within two Business Days of any such written request; provided,
however, that each Participant hereby acknowledges and agrees that the Seller shall not
assume responsibility with respect to the accuracy, authenticity, validity or enforceability
thereof. Other than such documents as may be furnished by the Seller in accordance with the
immediately preceding sentence, the Seller shall have no responsibility to provide the Participants
with any credit information or other information concerning the affairs, financial condition or
business of the Borrowers or any other party which may come into the Seller’s possession.



     (e) Each Participant agrees that the Seller may, in its sole discretion, without notice to or
consent from such Participant, agree to the modification, amendment or waiver of any of the terms
of any of the Facility Documents or the release of any Collateral, provided that the Seller
shall not, without each Participant’s prior written consent, agree to any such modification,
amendment or waiver with respect to the Facility Documents that: (i) extends the due date for any
scheduled repayment or prepayment of principal of or interest on any Loan, (ii) reduces the amount
of any scheduled repayment or mandatory prepayment of principal of or interest on any Loan or the
rate of interest on any Loan (iii) forgives any principal of or accrued interest on any Loan, or
(iv) releases all or substantially all of the Collateral or the Guarantors; provided that,
for the avoidance of doubt, this provision shall not be deemed to require the Participants’ consent
with respect to any sales of Collateral expressly permitted by the Facility Documents without the
Lenders’ consent.



     Section 10. Non-Recourse; Independent Investigation. (a) Each Participant acknowledges
and agrees that its Participation is being acquired without recourse to the Seller (other than for
a breach of the Seller’s obligation hereunder to remit the Participants’ portion of payments
received under the Facility Documents) and that it expressly assumes all risk of loss in connection
with the Participation. The Seller makes no representation or warranty, express or implied, and
assumes no



10









 




responsibility, with respect to the genuineness, authorization, execution, delivery, validity,
legality, value, sufficiency, perfection, priority, enforceability or collectability of any of the
Loans or the Facility Documents. The Seller assumes no responsibility for (i) any representation
or warranty made by, or the accuracy, completeness, correctness or sufficiency of any information
(or the validity, completeness or adequate disclosure of assumptions underlying any estimates,
forecasts or projections contained in such information) provided directly or indirectly by, the
Borrowers, any other Obligor or any other Person, (ii) the performance or observance by the
Borrowers or any other Obligor of any of the provisions of the Facility Documents (whether on,
before or after the Initial Funding Date), (iii) the filing, recording, or taking of any action
with respect to any of the Facility Documents, (iv) the financial condition of the Borrowers, any
other Obligor or any other Person, (v) (except as otherwise expressly provided herein) any other
matter whatsoever relating to the Borrowers, any other Obligor, any other Person, the Loans or the
Participation or (vi) the income or withholding tax status with respect to a Participant’s interest
in the Loans;




     (b) Each Participant acknowledges that it has received a copy of the Loan Agreement and the
other Facility Documents executed and/or delivered by the Borrowers and/or Obligors. Each
Participant represents and warrants to the Seller that such Participant (i) has full access to all
such documents and information (including any financial information) as it deems necessary to
review in order to enter into this Agreement, (ii) is a sophisticated buyer and has made,
independently and without reliance on the Seller, its own independent investigation of the
financial condition, operations, property, affairs, and general creditworthiness of the Borrowers,
the other Obligors and the Facility Documents for the purpose of acquiring the Participation, (iii)
has purchased the Participation for the purpose of investment only and with no present intention of
reselling the same, and not with a view to, or for sale in connection with, any distribution
thereof and (iv) will continue its own independent investigation of the financial condition and
affairs of the Borrowers and the Obligors.



     Section 11. Expenses; Indemnity. (a) The Seller acknowledges that it shall pay all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses,
and disbursements, including legal fees, incurred by the Seller, or for which the Seller is
responsible, in connection with (i) the administration or enforcement of (A) the Loans or (B) the
Loan Agreement or any Facility Documents against the Obligors, and (ii) the collection of the Loans
(including, without limitation, those arising due to suits, claims or counterclaims by a Borrowers,
an Obligor or other parties against the Seller or any agent of the Seller), and that neither
Participant shall be obligated to indemnify or reimburse the Seller for any such item;
provided that the Seller shall be entitled to be reimbursed for such expenses in accordance
with the Facility Documents. Each Participant shall pay to the Seller all reasonable expenses,
liabilities, costs and damages (including attorney’s fees) reasonably incurred by the Seller in
connection with the enforcement and collection of the obligations of such Participant under this
Agreement.



     (b) Each Participant agrees, within five Business Days of written request from the Seller, to
reimburse the Seller for, to indemnify and defend the Seller against, and hold the Seller harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever, including but not limited to reasonable
attorneys’ fees and expenses that may at any time be imposed on, asserted against or incurred by,
the Seller arising out of or in connection with the breach of or inaccuracy in any of the
representations and warranties of such Participant or any material breach of or failure by such



11









 




Participant to perform its covenants hereunder; provided, however, that a
Participant shall not be liable for the Seller’ gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, nonappealable order.




     (c) The foregoing obligations of the Seller and the Participants shall survive the termination
of this Agreement.



     Section 12. Taxes. Any taxes due and payable on any payments to be made to a
Participant hereunder shall be such Participant’s sole responsibility. Each Participant warrants
that it is not subject to any taxes, charges, levies or withholdings with respect to payments under
this Agreement that are imposed by means of withholding by any applicable taxing authority
(“Withholding Tax”). Each Participant agrees to provide the Seller, from time to time upon
the Seller’s request, completed and signed copies of any documents that may be required by an
applicable taxing authority to certify such Participant’s exemption from Withholding Tax with
respect to payments to be made to such Participant under this Agreement; and each Participant
agrees to hold the Seller harmless from any Withholding Tax imposed due to such Participant’s
failure to establish that it is not subject to Withholding Tax.



     Section 13. Reimbursement. In the event that (a) the Seller shall pay any amount to a
Participant pursuant hereto in the belief or expectation that a related payment has been or will be
received or collected by the Seller pursuant to the Facility Documents and (b) such related payment
is not received or collected by the Seller, then the Participant receiving such payment, within
five Business Days of written request by the Seller, shall return such amount to the Seller,
together with interest thereon accruing at Overnight LIBOR for each day from and including the date
of such payment by the Seller to but excluding the date of repayment to the Seller. If the Seller
determines at any time that any amount received or collected by the Seller pursuant to the Facility
Documents must be rescinded or otherwise returned to a Borrower or to any other person or entity
pursuant to any insolvency law or otherwise, then notwithstanding any other provision of this
Agreement, the Seller shall not be required to remit any portion thereof to the Participants and
each Participant, within the earlier of (i) five Business Days of written request by the Seller or
(ii) the date the Seller is required to repay any such amount to a third party, will repay to the
Seller any portion thereof that such Participant received, together with interest thereon at such
rate, if any, as the Seller shall have been required to pay to a Borrower, or such other person or
entity, with respect thereto. If, for any reason, a Participant shall at any time receive an
amount in excess of the amount which such Participant is entitled to receive pursuant to this
Agreement, then, promptly upon demand by the Seller, such Participant shall forthwith return such
excess to the Seller, together with interest thereon accruing at Overnight LIBOR from the time of
the overpayment to the date of repayment to the Seller.



     Section 14. Set-off. To the extent contemplated by the Loan Agreement and permitted
by law, the Participant shall be entitled to the benefits of any provisions in the Loan Agreement
providing for rights of set-off against the Borrowers as though such Participant were a Lender.
If, as a result of set-off or otherwise, a Participant receives a payment (a “Subject
Payment”) in respect of its Funded Participation Amount that would cause the aggregate
principal amount received by such Participant in respect of the Loans to exceed its Percentage
Interest of all repayments received by the Parties in respect of the Loans (or its participation
therein), such Participant shall purchase from each of the other Parties a participation in the
interests of the other Parties in the Loans such



12









 




that all of the Parties received the benefit of such Subject Payment in proportion to their
respective interests in the Loans before giving effect to such Subject Payment.




     Section 15. Nature of Interest. Each Participant agrees that it will not have, and
will not assert or seek to exercise, any legal or equitable right or remedy against the Borrowers
or any Obligors with respect to the Loans or other liabilities under the Facility Documents and the
purchase of its Participation hereunder. The Participant shall not, by reason of this Agreement
and the transactions contemplated hereby, be deemed to have any interest in (a) any property taken
as security for Borrower’s obligations and liabilities under or with respect to (i) the Loans, the
Note or the Facility Documents or (ii) any other credit, loan or financial accommodation from time
to time made or furnished to the Borrowers by the Seller, or (b) any property now or hereafter in
the possession of the Seller or under its or any agent’s or pledgee-in-possession’s control which
may be or might become security for performance and payment of the Obligors’ obligations under and
in connection with the Loans, the Note and the Facility Documents by reason of the general
description contained in any general loan or collateral agreement or collateral note held by the
Seller or by reason of any right of setoff, counterclaim, banker’s lien or otherwise;
provided, however, that in the case of clause (a) or (b) above, if such
property, indebtedness, or the proceeds thereof shall be applied by the Seller to the payment or
reduction of any principal or interest in any Loans, then, subject to Section 8, each
Participant shall be entitled to its Participant’s Share of such application.



     Section 16. Miscellaneous.



     (a) Entire Agreement; Amendments; Exercise of Rights. This Agreement constitutes the
entire agreement of the Parties with respect to the respective subject matters hereof and
supersedes all previous and contemporaneous negotiations, promises, covenants, agreements,
understandings and representations on such subjects, all of which have become merged and finally
integrated into this Agreement. No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the Parties and no waiver of any provision of this Agreement,
nor consent to any departure by either Party from it, shall be effective unless it is in writing
and signed by the affected Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on the part of a Party
to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver
hereof by such Party, nor shall any single or partial exercise of any right under this Agreement
preclude any other or further exercise thereof or the exercise of any other right. The rights and
remedies of each Party provided herein (a) are cumulative and are in addition to, and are not
exclusive of, any rights or remedies provided by law (except as otherwise expressly set forth in
this Agreement) and (b) are not conditional or contingent on any attempt by such Party to exercise
any of its rights under any other related document against the other Party or any other Person.



     (b) Survival; Successors and Assigns. All representations, warranties, covenants,
indemnities and other provisions made by the Parties shall be considered to have been relied upon
by the Parties, shall be true and correct as of the date hereof and the Initial Funding Date, and
shall survive the execution, delivery, and performance of this Agreement. This Agreement,
including the representations, warranties, covenants and indemnities contained in this Agreement,
shall inure to the benefit of, be binding upon and be enforceable by and against the Parties and
their respective successors and permitted assigns. Without prejudice to any restrictions or
limitations in the Loan



13









 




Agreement: (i) the Seller shall not assign any of the Commitment or the Loans, except to a
wholly owned subsidiary, without the prior written consent of each Participant, which consent may
not be unreasonably withheld; and (ii) a Participation may not be sold, pledged, assigned,
subparticipated, or otherwise transferred (except for an assignment by General Motors to a wholly
owned subsidiary or an assignment by Cerberus Fund to an Affiliate of Cerberus Capital Management
L.P. or a fund or account advised or managed by Cerberus Capital Management L.P. or by an Affiliate
thereof), without the Seller’s prior written consent, which consent may not be unreasonably
withheld. Any such purported action described in the preceding sentence that occurs without the
required consent shall be null and void and of no effect. For the avoidance of doubt, it is
understood that it shall be reasonable for the Participants to withhold consent to an assignment by
the Seller if the assignment documents are in conflict with or would prevent the Seller from
complying with the terms and conditions of this Agreement.




     (c) Further Assurances. Each Party agrees (i) to execute and deliver, or to cause to
be executed and delivered, all such instruments and (ii) to take all such actions that another
Party may reasonably request to effectuate the intent and purposes, and to carry out the terms, of
this Agreement, including the procurement of any third-party consents.



     (d) Confidentiality. Each Participant agrees that, without the prior written consent
of the other Parties, it shall not disclose the contents of this Agreement to any Person, except
that any Participant may make any such disclosure (a) as required to implement or enforce this
Agreement, (b) if required to do so by any law, court, or regulation, (c) to any governmental
authority or self-regulatory entity having or asserting jurisdiction over it, (d) if its attorneys
advise it that it has a legal obligation to do so or that failure to do so may result in it
incurring a liability to any other Person, (e) to its professional advisors and auditors or (f) to
any assignee or transferee permitted hereunder. Each Participant agrees to comply with the
requirements of the Facility Documents regarding confidentiality as if it was a Lender, and shall,
upon the Seller’s request, provide to the Seller a confidentiality undertaking to such effect in
accordance with the terms of the Facility Documents. Each Participant further acknowledges that it
may receive information form the Seller that is “insider information” for purposes of Section 10(b)
of the Securities Exchange Act of 1934 and agrees that it will keep such information confidential
and will not sue such information in violation of applicable securities laws. The provisions of
this Section 16(d) shall survive the termination of this Agreement.



     (e) Parties’ Other Relationships. Each Party and any of its affiliates may engage in
any kind of business or relationship with the Borrowers, any other Obligor or any of their
respective affiliates without liability to the other Parties or any obligation to disclose such
business or relationship to the other Parties. Each Participant acknowledges that the Seller and
its affiliates may have commercial lending, and/or other business relationships, including
extensions of credit, financial advisory arrangements and deposits, with the Borrowers, the
Obligors and their respective affiliates in addition to the Loans and the Participation.



     (f) Relationship Between the Seller and the Participants. The relationship between
the Seller and each Participant shall be that of seller and buyer. A Participant’s interests in
the Loans in which it purchases an interest hereunder shall be a participation and shall not be
deemed to be a direct assignment of such Loans. No Party is a trustee or agent for any other
Party, and no Party



14









 




shall have fiduciary obligations to any other Party. This Agreement shall not be construed to
create a partnership or joint venture between the Parties.




     (g) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. (i) 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 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.



     (ii) 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.



     (h) Severability; Interpretation. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under such 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. This Agreement shall be deemed to
have been jointly drafted and no provision of it shall be interpreted or construed for or against
any Party because such Party purportedly prepared or requested such provision, any other provision
or this Agreement as a whole.



     (i) No Third Party Beneficiaries. None of the provisions of this Agreement will inure
to the benefit of any Person other than the Seller and the Participants. Without limiting the
generality of the foregoing, neither the Borrowers nor any other Person obligated to pay the Loans
may rely hereon or have any right to assert that the Seller or a Participant has failed to comply
with the provisions of this Agreement.



15









 





     (j) Subrogation. To the extent that the Seller enforces any claim for indemnification
or other claim or remedy against a Participant under this Agreement and receives payment or another
remedy from a Participant in respect of such claim or remedy, the Parties agree that to the extent
permitted by law and the Facility Documents, without the need for further action on the part of any
Party, such Participant shall be subrogated to the rights of the Seller against any other Person
with respect to such claim or remedy to the extent of such payment or other remedy;
provided that it shall not exercise any such subrogation right unless the Loan Repayment
Date shall have occurred and all obligations owed to the Seller in respect of the Loan Agreement
shall have been paid in full.



     (k) Expenses. Except to the extent expressly provided in this Agreement, each Party
agrees to bear its own expenses in connection with this Agreement.



     (l) Interest. If any Party fails to pay any amount (including interest, to the
fullest extent permitted by applicable law) payable by it hereunder when due, then interest shall
accrue and be payable immediately upon demand on such unpaid amount at a per annum
rate equal to Overnight LIBOR from and including the date on which such amount became due to but
excluding the date the same is paid in full.



     (m) Waiver of Punitive, Consequential, Special or Indirect Damages. Each of the
Parties waives any right it may have to seek punitive, consequential, special or indirect damages
from any of the other Parties with respect to any and all issues presented in any action,
proceeding, claim or counterclaim brought by any of the Parties against any of the other Parties
with respect to any matter arising out of or in connection with this Agreement. This waiver is
knowingly and voluntarily given, and is intended to encompass each instance and each issue for
which the right to seek punitive, consequential, special or indirect damages would otherwise apply.
Each party hereto is authorized and directed to submit this Agreement to any court having
jurisdiction over the subject matter and the parties to this Agreement as conclusive evidence of
this waiver of the right to seek punitive, consequential, special or indirect damages.



     (n) Notices. All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile communication) and shall be
personally delivered or sent by certified mail or overnight air courier, postage prepaid, or by
facsimile, to the intended Party at the address or facsimile number of such Party set forth on
Schedule 1 or at such other address or facsimile number as shall be designated by such
Party in a written notice to the other parties hereto. All such notices and communications shall
be effective, (i) if personally delivered, when received, (ii) if sent by overnight air courier,
the next Business Day after delivery to the related air courier service, if delivery is guaranteed
as of the next Business Day, (iii) if sent by certified mail, three Business Days after having been
deposited in the mail, postage prepaid, and (iv) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means, if sent during business hours (if sent after business
hours, then on the next Business Day).



     (o) Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. Delivery of an executed counterpart
of a signature page to this Agreement by telecopy or electronic mail shall be effective as delivery
of a manually executed counterpart of this Agreement.



16









 





     IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above written.



	 	 	 	 	 
	 	GMAC LLC, as Seller

 	 
	 	By:	 /s/ D. C. Walker	 
	 	Name:	 D. C. Walker	 
	 	Title:  	 Group Vice President
  and Treasurer	 



17









 






	 	 	 	 	 



	 	 	 	 	 
	 	CERBERUS RESCAP FINANCING LLC

By Cerberus Partners, L.P., its Managing Member,

By Cerberus Associates, L.L.C., its General Partner,

 	 
	 	By  	/s/   Mark A. Neporent	 
	 	 	        Name:  	 Mark A. Neporent	 
	 	 	        Senior Managing Director 	 



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	 	GENERAL MOTORS CORPORATION, as a Participant

 	 
	 	By:  	/s/  Walter G. Borst	 
	 	Name:	 Walter G. Borst	 
	 	Title:  	 Treasurer	 



19