EX-10.4






Exhibit 10.4




EXECUTION COPY




      




PURCHASE AGREEMENT




among




RESIDENTIAL CAPITAL, LLC,




DOA HOLDING PROPERTIES, LLC,




DOA PROPERTIES IIIB (KB MODELS), LLC




and




MHPOOL HOLDINGS LLC




Dated as of September 30, 2008




      




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE I DEFINITIONS AND TERMS
	 	 	4	 
	Section 1.1 Certain Definitions
	 	 	4	 
	Section 1.2 Other Terms
	 	 	7	 
	Section 1.3 Other Definitional Provisions
	 	 	8	 
	ARTICLE II PURCHASE AND SALE OF INTERESTS
	 	 	9	 
	Section 2.1 Sale of Interests
	 	 	9	 
	Section 2.2 Assumed Liabilities; Retained Liabilities; Cancellation of GMAC MHF Note
	 	 	9	 
	Section 2.3 Purchase Price
	 	 	9	 
	Section 2.4 Adjustments to the Firm Bid Price
	 	 	10	 
	Section 2.5 Closing
	 	 	12	 
	Section 2.6 Deliveries by Seller
	 	 	12	 
	Section 2.7 Deliveries by Buyer
	 	 	13	 
	Section 2.8 Closing Costs
	 	 	14	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	14	 
	Section 3.1 Representations and Warranties of ResCap and Seller
	 	 	14	 
	Section 3.2 Representations and Warranties of Buyer
	 	 	17	 
	ARTICLE IV COVENANTS
	 	 	18	 
	Section 4.1 Commercially Reasonable Efforts
	 	 	18	 
	Section 4.2 Additional Covenants
	 	 	19	 
	Section 4.3 Servicing and Asset Management
	 	 	19	 
	Section 4.4 Excluded Asset Sales
	 	 	19	 
	Section 4.5 Tax Matters
	 	 	20	 
	Section 4.6 Further Assurances
	 	 	21	 
	ARTICLE V CONDITIONS TO CLOSING
	 	 	21	 
	Section 5.1 Conditions to the Obligations of each of the Parties
	 	 	21	 
	Section 5.2 Conditions to the Obligations of ResCap and Seller
	 	 	22	 
	Section 5.3 Conditions to the Obligations of Buyer
	 	 	22	 
	ARTICLE VI TERMINATION
	 	 	23	 
	Section 6.1 Termination
	 	 	23	 
	Section 6.2 Effect of Termination
	 	 	23	 
	ARTICLE VII INDEMNIFICATION
	 	 	23	 
	Section 7.1 Survival of Representations, Warranties and Covenants
	 	 	23	 
	Section 7.2 Indemnification
	 	 	23	 
	Section 7.3 Notice of Claim; Defense
	 	 	24	 
	Section 7.4 Limitations on Indemnification
	 	 	26	 
	ARTICLE VIII MISCELLANEOUS
	 	 	28	 
	Section 8.1 Notices
	 	 	28	 
	Section 8.2 Amendment; Waiver
	 	 	29	 
	Section 8.3 No Assignment or Benefit to Third Parties
	 	 	29	 
	Section 8.4 Entire Agreement
	 	 	29	 
	Section 8.5 Fulfillment of Obligations
	 	 	29	 
	Section 8.6 Expenses
	 	 	30	 






 









 








	 	 	 	 	 
	Section 8.7 Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury 
	 	 	30	 
	
Section 8.8 Counterparts
	 	 	30	 
	Section 8.9 Headings
	 	 	30	 
	Section 8.10 Severability
	 	 	30	 
	Section 8.11 Commitment Regarding Actions of Controlled Affiliates
	 	 	31	 
	Section 8.12 Specific Performance
	 	 	31	 






EXHIBITS




	 	 	 
	Exhibit A-1

	 	Pool 1 Assets
	Exhibit A-2

	 	Pool 2 Assets
	Exhibit B

	 	Excluded Assets
	Exhibit C

	 	Buyer’s Valuation of Assets
	Exhibit D

	 	Calculation of Proration Amount
	Exhibit E

	 	Servicing Agreement
	Exhibit F

	 	Limited Assignment and Assumption Agreement
	Exhibit G

	 	Form of Mutual Release
	Exhibit H

	 	Form of Purchase and Sale Contract and Deed







ii









 








Exhibit E




PURCHASE AGREEMENT




     This PURCHASE AGREEMENT is dated as of September 30, 2008, among Residential Capital, LLC, a
Delaware limited liability company (“ResCap”), DOA Holding Properties, LLC, a Delaware
limited liability company and indirect wholly-owned subsidiary of ResCap (“Seller”), DOA
Properties IIIB (KB Models), LLC, a Delaware limited liability company and direct wholly-owned
subsidiary of Seller (“Subsidiary”) and MHPool Holdings LLC, a Delaware limited liability
company (“Buyer”). Each of ResCap, Seller, Subsidiary and Buyer are referred to herein as
a “Party” and, collectively, as the “Parties”.



RECITALS:




     WHEREAS, as of June 30, 2008, Subsidiary was the owner of all of the assets identified in
Exhibit A-1 hereto (collectively, the “Pool 1 Assets” or “Pool 1”), as to
which Cerberus Capital Management, L.P. submitted a firm bid on July 25, 2008 (the “Bid
Letter”);



     WHEREAS, as of June 30, 2008, DOA Properties III (Models), LLC, a Delaware limited liability
company and an Affiliate of Subsidiary (“DOA Affiliate”), was the owner of all of the
assets identified in Exhibit A-2 hereto (collectively, the “Pool 2 Assets” or
“Pool 2”, and, together with the Pool 1 Assets, the “Assets” or the
“Pools”), as to which Cerberus Capital Management, L.P. also submitted the Bid Letter;



     WHEREAS, DOA Affiliate has conveyed title to the Pool 2 Assets (other than the Excluded
Assets, as defined below) to Subsidiary;



     WHEREAS, during the period from June 30, 2008 to the date hereof, Subsidiary or (prior to the
conveyance of the Pool 2 Assets to Subsidiary) DOA Affiliate, as the case may be, has entered into
a definitive agreement to sell, or has otherwise sold, to a third party a portion of the Assets, a
list of which is set forth on Exhibit B hereto (the “Excluded Assets”); and



     WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of the Assets other than
the Excluded Assets (the “Subject Assets”), through a sale and purchase of all of the
membership interests of Subsidiary (the “Interests”), as contemplated by the Bid Letter, on
the terms and subject to the conditions set forth herein.



 









 





     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and undertakings contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be
legally bound, agree as follows:



ARTICLE I




DEFINITIONS AND TERMS




     Section 1.1 Certain Definitions. As used in this Agreement, the following terms have the
meanings set forth below:



     “Additional Proceeds Amount” means the aggregate amount of proceeds or other payments
received by ResCap or any of its Affiliates in respect of the Subject Assets in respect of the
period between 11:59 p.m. (New York City Time) on the Cut-Off Date and 12:01 a.m. (New York City
Time) on the Closing Date, including all payments due after the Cut-Off Date but received on or
prior to 11:59 p.m. (New York City Time) on the Cut-Off Date.



     “Adjustment Amount” means $18,949,822, which represents the total value ascribed to
the Excluded Assets by Buyer as set forth on Exhibit C hereto.



     “Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling, controlled by, or under common control with, such other Person as of the date on
which, or at any time during the period for which, the determination of affiliation is being made.
For purposes of this definition, the term “control” (including the correlative meanings of the
terms “controlled by” and “under common control with”), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management policies of such Person, whether through the ownership of voting securities or by
contract or otherwise.



     “Agreement” means this Purchase Agreement, as the same may be amended or supplemented
from time to time in accordance with the terms hereof.



     “Ancillary Transfer Documents” means those instruments of transfer, assumptions,
filings or documents required to be executed and delivered by Seller or Buyer to effect the sale
and transfer of the Interests to Buyer pursuant to this Agreement.



     “Business Day” means any day other than a Saturday, a Sunday or a day on which banks
in New York City are authorized or obligated by Law or executive order to close.



     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended through the Closing.



     “Claims” means any and all actions, suits, petitions, appeals, demands, demand
letters, claims, notices asserting any right to indemnification, liens, notices of noncompliance or
violation, investigations, proceedings, consent orders or consent agreements.



     “Community” means the residential project in which a Model Home is located.



 









 





     “Contract” means any contract, undertaking, commitment, lease, mortgage, indenture,
arrangement, plan or other legally binding agreement or understanding.



     “Cut-Off Date” means June 30, 2008.



     “Encumbrance” means any lien, pledge, charge, claim, encumbrance, restriction,
community property interest, security interest, option, mortgage, easement, right of first offer,
right of first refusal or claim of any kind and character.



     “Environment” means surface waters, ground waters, soil, subsurface strata and ambient
air.



     “Environmental Laws” means all Laws, now or hereafter in effect and as amended, and
any judicial or administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the Environment, health, safety, natural resources
or Hazardous Materials, including CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. §§
6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 6901
et seq.; the Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Clean Air Act, 42 U.S.C. §§
7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f et
seq.; the Atomic Energy Act, 42 U.S.C. §§ 2011 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; and the
Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq.



     “Governmental Entity” means any federal, state or local court, administrative body or
other governmental or quasi-governmental entity with competent jurisdiction.



     “Guaranty” means the Guaranty, effective as of June 5, 2006, made by Residential
Funding Corporation (“RFC”) in favor of the Builder (as defined in the Pool 1 MSRA) in
connection with the Pool 1 MSRA.



     “Hazardous Materials” means (a) any element, compound or chemical that is defined,
listed or otherwise classified as a toxic pollutant, toxic or hazardous substance, extremely
hazardous substance or chemical, hazardous material, hazardous waste or biohazardous or infectious
waste under applicable Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) any substance exhibiting a hazardous waste characteristic including but not limited
to corrosivity, ignitibility, toxicity or reactivity as well as any radioactive or explosive
materials; (d) any substance containing 50 parts per million or more of polychlorinated biphenyls
or asbestos that is friable or damaged; and (e) any other wastes, materials, chemicals or
substances regulated pursuant to any Environmental Law.



     “Law” means any law, statute, ordinance, rule, regulation, code, order, judgment,
injunction or decree enacted, issued, promulgated, enforced or entered by a Governmental Entity or
self-regulatory organization.



     “Liabilities” means any and all debts, liabilities, commitments and obligations of any
kind, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated,
accrued or not accrued, asserted or not asserted, known or unknown, determined, determinable or



 









 







otherwise, whenever or however arising (including, whether arising out of any contract or tort
based on negligence or strict liability) and whether or not the same would be required by GAAP to
be reflected in financial statements or disclosed in the notes thereto.



     “Limited Assignment and Assumption Agreement” means that certain Limited Assignment
and Assumption Agreement to be entered into at Closing by RFC, DOA Holdings NoteCo, LLC, KB One,
LLC and Buyer in the form annexed hereto as attached hereto as Exhibit F.



     “MSRA” means each of the Pool 1 MSRA and Pool 2 MSRA.



     “Mutual Release” means that certain mutual release to be entered into at Closing by
ResCap, on behalf of itself and each of its controlled Affiliates (other than Subsidiary), on the
one hand, and Subsidiary, on the other hand, in the form annexed hereto as Exhibit G.



     “Note” means the Amended and Restated Note, dated June 5, 2006, issued by KBOne, LLC
to KB Home, in connection with the Pool 1 MSRA.



     “Permitted Encumbrances” means (i) liens for real property taxes and government
improvement assessments not yet due and payable; (ii) covenants, easements, agreements,
restrictions and rights of record approved by Buyer that do not materially and adversely affect the
insurability or marketability of title to the Subject Asset or prohibit or interfere with the use
of the Subject Asset as a single family residential dwelling; (iii) the standard title insurance
policy exceptions for the jurisdiction to the extent customarily acceptable to buyers of
residential property; and (iv) any defects or other matters affecting title that will be
irrevocably extinguished by Seller or Subsidiary prior to the Closing.



     “Person” means an individual, a corporation, a partnership, an association, a limited
liability company, a Governmental Entity, a trust or other entity or organization.



     “Pool 1 MSRA” means the Second Amended and Restated Master Sale and Rental Agreement,
dated as of June 5, 2006, by and between Subsidiary, as successor in interest to KB One, LLC and KB
Home, as further amended or modified to date.



     “Pool 2 MSRA” means the Second Amended and Restated Master Sale and Rental Agreement,
dated as of September 10, 2004, by and among Subsidiary, as successor in interest to GMAC Model
Home Finance, Inc., Dominion Homes, Inc. and Dominion Homes of Kentucky, Ltd., as further amended
or modified to date.



     “Proration Amount” means the amount determined in accordance with Exhibit D.



     “Reference Rate” means the rate per annum equal to the “Prime Rate” for the United
States as published in The Wall Street Journal, Eastern Edition.



     “Release” means disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying, seeping, placing and the like into or upon any land or water
or air or otherwise entering into the Environment.



 









 





     “ResCap Disclosure Letters” means the disclosure letters delivered by Seller to Buyer
prior to the execution and delivery of this Agreement relating to Pool 1 and Pool 2, respectively.



     “ResCap’s Knowledge” means the actual knowledge of those persons identified in
Section 1.1 of the ResCap Disclosure Letters.



     “Subject Assets” means the Assets other than the Excluded Assets.



     “Tax Returns” means all reports, returns, declarations, statements or other
information filed, supplied or required to be filed or supplied to any Governmental Entity in
connection with Taxes.



     “Taxes” means all taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added,
excise, real property, personal property, sales, use, services, withholding, employment, payroll
and franchise taxes imposed by the United States or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax resulting from, attributable to, or
incurred in connection with any Tax or any contest or dispute thereof and any interest in respect
of such amounts.



     “Transaction Documents” means, collectively, this Agreement, the Limited Assignment
and Assumption Agreement, the Ancillary Transfer Documents, the Mutual Release and the Servicing
Agreement.



     Section 1.2 Other Terms. The following capitalized terms are defined in the following
Sections of this Agreement:



			
	Term	 	Section
	Assumed Liabilities
	 	2.2(a)
	Bid Letter
	 	RECITALS
	Buyer
	 	PREAMBLE
	Buyer Indemnified Party
	 	7.2(a)
	Cap
	 	7.4(c)
	Chosen Courts
	 	8.7
	Claim Notice
	 	7.3(a)
	Closing
	 	0
	Closing Date
	 	0
	Code
	 	2.6(f)
	Deductible
	 	7.4(b)
	Estimated Additional Proceeds Amount
	 	2.4(a)
	Estimated Adjustments
	 	2.4(a)
	Estimated Proration Amount
	 	2.4(a)
	Estimated Purchase Price
	 	2.3(a)
	Excluded Assets
	 	RECITALS
	Final Additional Proceeds Amount
	 	2.4(d)






 









 






			
	Term	 	Section
	Final Proration Amount
	 	2.4(d)
	Firm Bid Price
	 	2.3(a)
	GMAC MHF Note
	 	2.2(c)
	Indemnified Party
	 	7.3(a)
	Indemnifying Party
	 	7.3(a)
	Independent Accounting Firm
	 	2.4(e)
	Losses
	 	7.2(a)
	Model Homes
	 	3.1(e)(ii)
	Notice of Dispute
	 	2.4(d)
	Outside Date
	 	6.1(b)
	Owner
	 	2.6(f)
	Party
	 	PREAMBLE
	Pool
	 	RECITALS
	Post-Closing Statement
	 	2.4(c)
	Proceeding
	 	7.3(a)
	Required Seller Consents
	 	3.1(c)
	ResCap
	 	PREAMBLE
	ResCap Indemnified Party
	 	7.2(b)
	Retained Liabilities
	 	2.2(b)
	Sale
	 	2.1
	Seller
	 	PREAMBLE
	Seller’s Certificate
	 	2.4(a)
	Servicing Agreement
	 	4.3
	Subsidiary
	 	PREAMBLE
	Subject Asset
	 	RECITALS
	Third-Party Claim
	 	7.3(a)
	Transfer Taxes
	 	2.8






     Section 1.3 Other Definitional Provisions. Unless the express context otherwise requires:



          (a) the words “hereof”, “herein”, and “hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any particular provision of
this Agreement;




          (b) the terms defined in the singular have a comparable meaning when used in the plural, and
vice versa;




          (c) the terms “Dollars” and “$” mean United States Dollars;




          (d) references herein to a specific Section, Subsection or Exhibit shall refer, respectively,
to Sections, Subsections or Exhibits of this Agreement;




          (e) wherever the word “include,” “includes,” or “including” is used in this Agreement, it
shall be deemed to be followed by the words “without limitation;” and




 









 








          (f) references herein to any gender includes each other gender.




ARTICLE II




PURCHASE AND SALE OF INTERESTS




     Section 2.1 Sale of Interests. On the terms and subject to the conditions set forth
herein, at the Closing, Seller shall sell, convey, transfer, assign and deliver to Buyer, and Buyer
shall purchase from Seller, all of the right, title and interest of Seller in and to the Interests,
free and clear of all Encumbrances (the “Sale”).



     Section 2.2 Assumed Liabilities; Retained Liabilities; Cancellation of GMAC MHF Note.



          (a) On the terms and subject to the conditions set forth herein and in the Limited Assignment
and Assumption Agreement (to the extent applicable), at the Closing, Subsidiary shall assume or
retain, as applicable, perform and discharge when due (i) all Liabilities in respect of the Pool 1
MSRA and the Note allocated to Subsidiary pursuant to the Limited Assignment and Assumption
Agreement, (ii) all Liabilities in respect of the Pool 2 MSRA (but only to the extent of the
obligations thereunder arising from and after the Closing Date as a result of post-Closing
ownership and operation of the Subject Assets), and (iii) all Liabilities to the extent, but solely
to the extent, included in the calculation of the Proration Amount in accordance with Exhibit
D (collectively, the “Assumed Liabilities”).




          (b) From and after the Closing, Seller shall assume or retain, as applicable, perform and
discharge when due all Liabilities that exist, relate to or arise out of (i) all Liabilities in
respect of the Pool 1 MSRA and the Note allocated to Seller pursuant to the Limited Assignment and
Assumption Agreement, (ii) the ownership of the Interests or any of the Subject Assets or the
operation of the businesses or assets of Subsidiary or DOA Affiliate (including with respect to
obligations and liabilities under the Pool 2 MSRA except to the extent assumed or retained by
Subsidiary pursuant to Section 2.2(a)(ii)) prior to or as of the Closing (except to the
extent, but solely to the extent, included in the calculation of the Proration Amount in accordance
with Exhibit D), (iii) the Excluded Assets, or (iv) any of the matters specified in
Section 2.2 of either of the ResCap Disclosure Letters (the “Retained
Liabilities”). Notwithstanding anything to the contrary herein, neither Buyer nor Subsidiary
shall assume or have any responsibility of any nature with respect to any Retained Liabilities.




          (c) Prior to the Closing, ResCap and Buyer shall take, or shall cause their respective
controlled Subsidiaries to take, all actions necessary to extinguish that certain loan agreement
and revolving note between KBOne, LLC and GMAC MHF referenced in the Note (the “GMAC MHF
Note”) in full without any liability to Subsidiary, Buyer, ResCap, Seller, KB One, LLC or GMAC
MHF.




     Section 2.3 Purchase Price.



          (a) On the terms and subject to the conditions set forth herein, at the Closing, in
consideration of the sale of the Interests, Buyer shall pay to Seller an amount (the “Estimated





 









 







Purchase Price”) in cash equal to: (i) $80,070,000 (the “Firm Bid Price”),
(ii) as adjusted downward, for the Adjustment Amount, (iii) as adjusted upward or downward, for the
Estimated Proration Amount, and (iv) as adjusted downward, for the Estimated Additional Proceeds
Amount.




          (b) The allocation of the Firm Bid Price among the Subject Assets shall be allocated in
proportion to the value ascribed to each Subject Asset as set forth on Exhibit C hereto.
The allocation of the Final Proration Amount and Final Additional Proceeds Amount among the Subject
Assets shall be in accordance with a schedule to be prepared in good faith by Buyer and delivered
to Seller within 30 calendar days after the final determinations of the Final Proration Amount and
the Final Additional Proceeds Amount pursuant to Section 2.4 and shall be based on the
underlying Subject Asset directly related thereto. Seller shall have the right to review such
schedule and provide comments thereto which shall be considered in good faith by Buyer.




     Section 2.4 Adjustments to the Firm Bid Price.



          (a) No later than one Business Day prior to the Closing Date, Seller shall prepare and deliver
to Buyer a certificate (the “Seller’s Certificate”) that sets forth Seller’s good faith
estimate (together with reasonably detailed back-up data to support such estimate) of (i) the
Proration Amount (“Estimated Proration Amount”) and (ii) the Additional Proceeds Amount
(the “Estimated Additional Proceeds Amount” and, together with the Estimated Proration
Amount, the “Estimated Adjustments”). The calculation of the Estimated Proration Amount
shall be prepared in accordance with Exhibit D. The calculation of the Estimated Additional
Proceeds Amount shall be prepared in accordance with the definition of “Additional Proceeds
Amount”.




          (b) During the preparation and calculation of the Estimated Adjustments, Seller shall, and
ResCap shall cause Seller to, afford Buyer and its representatives a reasonable opportunity to
review the preparation of Estimated Adjustments; and thereafter, reasonable access to the books and
records of Seller and Subsidiary to confirm such calculation.




          (c) As promptly as practicable, but in no event later than thirty days following the Closing
Date, Seller shall prepare and deliver to Buyer a statement (the “Post-Closing Statement”)
that sets forth Seller’s calculation (together with reasonably detailed back-up data to support
such calculation) of (i) the Proration Amount and (ii) the Additional Proceeds Amount. The
calculation of the Proration Amount as set forth on the Post-Closing Statement shall be prepared in
accordance with Exhibit D. The calculation of the Additional Proceeds Amount as set forth
on the Post-Closing Statement shall be prepared in accordance with the definition of “Additional
Proceeds Amount”.




          (d) Except as set forth below in this Section 2.4, the Post-Closing Statement and the
calculations of the Proration Amount and Additional Proceeds Amount shall be deemed to be and shall
be final, binding and conclusive on the Parties hereto. Both the Post-Closing Statement and the
calculations of Proration Amount and Additional Proceeds thereon shall be deemed final for the
purposes of this Section 2.4 upon the earlier of (i) the failure of Buyer to deliver Seller
a Notice of Dispute within thirty days of the receipt of the Post-Closing Statement, (ii) the
resolution of all disputes, pursuant to this Section 2.4, by Buyer and Seller, or (iii) the



 









 






resolution of all disputes, pursuant to this Section 2.4, by the Independent
Accounting Firm. “Final Proration Amount” shall mean the Proration Amount as finally
determined pursuant to this Section 2.4. “Final Additional Proceeds Amount” shall
mean the Additional Proceeds Amount as finally determined pursuant to this Section 2.4.
“Notice of Dispute” means a written notice from Buyer that disputes Seller’s calculation of
any of the Proration Amount and/or Additional Proceeds Amount as set forth on the Post-Closing
Statement.




          (e) In the event a Notice of Dispute is delivered, Buyer and Seller shall cooperate in good
faith to attempt to reconcile their differences, and any mutually agreed resolution by them as to
any disputed amounts shall be final, binding and conclusive on the Parties hereto. If Buyer and
Seller are unable to reach such a resolution within thirty days of the delivery of the Notice of
Dispute, Buyer and Seller shall submit the items remaining in dispute for resolution to an
independent accounting firm of national reputation mutually acceptable to Seller and Buyer (the
“Independent Accounting Firm”). If a Notice of Dispute is not delivered on or before the
expiration of such 30-day period (or if Buyer notifies Seller in writing that there is no such
dispute), the calculations prepared by Seller shall be deemed to be final, binding and conclusive.
In the event a Notice of Dispute is timely delivered with respect to only certain of the amounts or
certain portions of the amounts set forth therein but not others, then any undisputed amount or
portion thereof shall be deemed to be final, binding and conclusive.




          (f) The Independent Accounting Firm shall be instructed to render its written determination as
soon as reasonably possible (which the Parties hereto agree should not be later than sixty days
following the date on which the items remaining in dispute are submitted to the Independent
Accounting Firm) to Seller and Buyer. The Independent Accounting Firm may only resolve
disagreements as to matters covered by the Notice of Dispute. All matters not covered by the
Notice of Dispute shall be deemed to be final, binding and conclusive. The Independent Accounting
Firm’s determination shall be final, binding and conclusive on the Seller and Buyer. Buyer and
Seller shall promptly provide their assertions regarding the Proration Amount and Additional
Proceeds Amount, as the case may be, in writing to the Independent Accounting Firm, with a copy to
each other. The Independent Accounting Firm shall conduct its determination activities in a manner
wherein all materials submitted to it are held in confidence and shall not be disclosed to any
third parties (other than any designated authorized representative of a Party). The Parties agree
that judgment may be entered upon the determination of the Independent Accounting Firm in any court
having jurisdiction over the Party against which such determination is to be enforced. The fees and
disbursements of the Independent Accounting Firm shall be allocated between Seller and Buyer in the
same proportion that the aggregate amount of such remaining disputed items so submitted to the
Independent Accounting Firm that is unsuccessfully disputed by each such Party as finally
determined by the Independent Accounting Firm bears to the total amount of such remaining disputed
items. In no event may the Independent Accounting Firm’s resolution of any difference be for an
amount which is outside the range of disagreement between Buyer’s position and Seller’s position.
Buyer and Seller shall provide the Independent Accounting Firm with access to all books and records
reasonably requested by the Independent Accounting Firm in connection with this Section
2.4(f) (subject to the execution of customary access letters, if requested, with respect to the
work product of a Party’s independent accountant).




 









 








          (g) Upon final determination of the Final Proration Amount, then:




               (A) in the event that the Final Proration Amount exceeds the Estimated Proration Amount, then
Seller shall pay such excess amount to Buyer within three Business Days of such determination; and



               (B) in the event that the Final Proration Amount is less than the Estimated Proration Amount,
then Buyer shall pay such excess amount to Seller within three Business Days of such determination.



          (h) Upon final determination of the Final Additional Proceeds Amount, then:




               (A) in the event that the Final Additional Proceeds Amount exceeds the Estimated Additional
Proceeds Amount, then Seller shall pay such excess amount to Buyer within three Business Days of
such determination; and



               (B) in the event that the Final Additional Proceeds Amount is less than the Estimated
Additional Proceeds Amount, then Buyer shall pay such excess amount to Seller within three Business
Days of such determination.



          (i) Payment shall be made pursuant to subsections (g) and (h) of this
Section 2.4 as follows: (i) by wire transfer of immediately available funds to the bank
account designated in writing by the recipient at least two Business Days prior to the expiration
of the applicable three-Business Day period referenced in subsections (g) and (h)
of this Section 2.4 and (ii) to the extent such payment is not made within the applicable
three-Business Day period, interest shall be due and payable on such payment at an annual rate
equal to the Reference Rate from and after the Closing Date to and including the date such payment
is fully made; provided, that such amounts shall be netted to the extent payable by each of
Seller and Buyer to the other Party.




     Section 2.5 Closing. Subject to the terms and conditions of this Agreement, the
consummation of the Sale (the “Closing”) shall take place at the offices of Schulte Roth & Zabel
LLP, 919 Third Avenue, New York, New York 10022 at 10:00 A.M. New York City time, on September 30,
2008, except to the extent any of the conditions set forth in Article V (other than those
conditions that by their nature are to be satisfied at the Closing but subject to the fulfillment
or waiver of those conditions) have not been satisfied or waived by such date, in which case the
Closing shall occur on the second Business Day following the date on which the conditions set forth
in Article V (other than those conditions that by their nature are to be satisfied at the Closing
but subject to the fulfillment or waiver of those conditions) have been satisfied or waived, or at
such other time and place as the Parties hereto may mutually agree. At the Closing, the Parties
shall take all actions required under this Article II and all other actions not previously taken
but required to be taken hereunder at or prior to the Closing. The date on which the Closing
occurs is called the “Closing Date”.



     Section 2.6 Deliveries by Seller. At the Closing, Seller shall deliver (or cause to be
delivered) to Buyer:



          (a) the certificate required to be delivered pursuant to Section 5.3(d);




 









 








          (b) an executed counterpart to the (i) Servicing Agreement, (ii) Limited Assignment and
Assumption Agreement, (iii) the Mutual Release and (iv) the Ancillary Transfer Documents;




          (c) the written resignations, effective as of the Closing, of the current officers, managing
member, manager or members of the board of managers or directors, as applicable, of Subsidiary;




          (d) all Contracts and other documents in the possession or control of ResCap or any of its
controlled Affiliates exclusively related to, and copies of all Contracts and other documents in
the possession or control of ResCap or any of its controlled Affiliates primarily related to or
otherwise material to, Subsidiary’s ownership or operation of the Subject Assets (including,
without limitation, permits, licenses, approvals, certificates of occupancy, plans, specifications,
guaranties and warranties);




          (e) evidence of extinguishment of the GMAC MHF Note in accordance with Section 2.2(c);




          (f) an affidavit sworn by Seller stating, under penalty of perjury, that its sole owner for
U.S. Federal tax purposes (that is not disregarded) (the “Owner”) is not a foreign person
as defined in Section 1445 of the U.S. Internal Revenue Code (the “Code”) and providing
Owner’s United States tax identification number;




          (g) any Transfer Tax documentation required to be executed by Seller or Subsidiary in
connection with the payment of any Transfer Taxes, if any;




          (h) evidence of the receipt of all Required Seller Consents;




          (i) the minute books, the interest ledger, and books and records of Subsidiary and such other
documents and instruments of Subsidiary as Buyer may reasonably request related to the ownership or
operation of Subsidiary; and




          (j) such other documents and instruments as may be reasonably and customarily required in the
applicable jurisdiction to consummate the Sale pursuant to this Agreement.




     Section 2.7 Deliveries by Buyer. At the Closing, Buyer shall deliver (or cause to be
delivered) to Seller:



          (a) an amount in cash equal to the Estimated Purchase Price in immediately available funds by
wire transfer to an account or accounts that have been designated by ResCap no later than three
Business Days prior to the Closing Date;




          (b) the certificate required to be delivered pursuant to Section 5.2(c);




          (c) an executed counterpart to the (i) Servicing Agreement, (ii) the Limited Assignment and
Assumption Agreement, (iii) the Mutual Release and (iv) the Ancillary Transfer Documents; and




 









 








          (d) such other documents and instruments as may be reasonably and customarily required to
consummate the Sale pursuant to this Agreement.




     Section 2.8 Closing Costs. Except as otherwise set forth herein, each party shall be
responsible for its respective legal costs. Seller shall pay all excise, sales, use, value added,
registration stamp, recording, documentary, conveyancing, franchise, transfer, gains, transaction
privilege tax and similar Taxes, levies, charges and fees (collectively, “Transfer Taxes”) incurred
in connection with the Sale pursuant to this Agreement. Buyer shall pay (i) all costs associated
with its due diligence; and (ii) all title insurance premiums and charges, including endorsements,
and all title examination costs for any and all title work Buyer orders. The obligations of the
parties to pay applicable closing charges shall survive the termination of this Agreement.



ARTICLE III




REPRESENTATIONS AND WARRANTIES 




     Section 3.1 Representations and Warranties of ResCap and Seller. ResCap and Seller, jointly
and severally, represent and warrant to Buyer as of the date hereof and as of the Closing Date
(except with respect to any representation or warranty made as of a specified date, which shall be
made only as of such date) that:



          (a) Due Organization. Each of ResCap, Seller and Subsidiary is duly formed, validly
existing and in good standing under the laws of its jurisdiction of formation. Each of ResCap and
Seller has all requisite limited liability company power and authority to enter into this Agreement
and to carry out its respective obligations hereunder and to consummate the transactions
contemplated hereby. Subsidiary has the requisite limited liability company power and authority to
own its assets and to carry on its business as presently conducted and is duly qualified to do
business and is in good standing (where such concept exists) as a foreign limited liability company
in each jurisdiction in which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary.




          (b) Binding Effect. The execution and delivery of this Agreement, the performance of
its obligations hereunder and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite limited liability company action on the part of each of ResCap,
Seller and Subsidiary. This Agreement has been duly executed and delivered by each of ResCap,
Seller and Subsidiary. This Agreement, assuming the due authorization, execution and delivery by
Buyer, constitutes a legally binding obligation of each of ResCap, Seller and Subsidiary,
enforceable against each of ResCap, Seller and Subsidiary in accordance with its terms, subject to
bankruptcy, insolvency, receivership, moratorium, reorganization or similar laws affecting the
rights of creditors generally. As of the Closing Date with respect to the Limited Assignment and
Assumption Agreement, Ancillary Transfer Documents, Mutual Release and the Servicing Agreement (i)
the execution and delivery of each such Transaction Document, the performance of their respective
obligations thereunder and the consummation of the transactions contemplated thereby shall have
been duly authorized by all requisite limited liability company power on the part of each of ResCap
and Seller; (ii) each such Transaction Document shall have been duly executed and delivered by each
of ResCap and Seller; and (iii) each such Transaction Document shall constitute a legally binding
obligation of each of ResCap



 









 






and Seller, enforceable against each such entity in accordance with its terms, subject to
bankruptcy, insolvency, receivership, moratorium, reorganization or similar laws affecting the
rights of creditors generally.




          (c) Consents and Approvals. No consent, approval, waiver, authorization, notice or
filing is required to be obtained from or made with any Governmental Entity or self-regulatory
organization or any other Person by ResCap or any of its controlled Affiliates, including Seller
and Subsidiary, in connection with the execution, delivery and performance of any of the
Transaction Documents, other than those set forth in Section 3.1(c) of the ResCap Disclosure
Letters (the “Required Seller Consents”).




          (d) Non-Contravention. Assuming the receipt of the Required Seller Consents, the
execution, delivery and performance of this Agreement by ResCap, Seller and Subsidiary and by
ResCap, Seller and each of their respective controlled Affiliates of the other Transaction
Documents (to the extent executed and delivered), and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) violate any provision of the
organizational documents of the applicable entity, (ii) result in the material breach of, or
constitute a material default under, or result in the termination, cancellation, modification or
acceleration (whether after the filing of notice or the lapse of time or both) of any material
right or obligation of ResCap or any of its controlled Affiliates, including Seller and Subsidiary,
under, or result in a loss of any material benefit to which such Party is entitled under, any
material Contract (including the MSRAs), or result in the creation of any Encumbrance upon any of
the Interests or the Subject Assets, or (iii) violate or result in a breach of or constitute a
default under any Law to which ResCap or any of its controlled Affiliates, including Seller and
Subsidiary, is subject.




          (e) Subject Assets.





          (i) Seller has full right to sell, assign and transfer all of its right, title and
interest in the Interests to Buyer, subject to receipt of the Required Seller Consents.
Seller is the owner of the Interests, free and clear of any Encumbrances of any nature
whatsoever (except for any such Encumbrances being released prior to or effective upon the
Closing). At the Closing, Seller shall transfer all right, title and interest in the
Interests to Buyer, free and clear of any Encumbrances of any kind (other than those imposed
by applicable securities Laws), and, except for those Ancillary Transfer Documents executed
and delivered to Buyer by Seller at Closing, no novations or assignments shall be necessary
to vest Buyer at the Closing with such right, title and interest. The Interests constitute
all of the outstanding membership interests (or other form of equity- or equity-like
interests) of Subsidiary. Subsidiary has good and valid title to each Subject Asset, free
and clear of any Encumbrances of any nature whatsoever except for Permitted Encumbrances and
any other Encumbrances being released prior to or effective upon the Closing. For each
Subject Asset, it was the policy of Subsidiary or Subsidiary’s predecessor in title to
obtain a title insurance policy in favor of (A) Subsidiary, or (b) a predecessor-in-title to
Subsidiary, and each predecessor-in-title to Subsidiary has transferred the Subject Asset to
a subsequent predecessor-in-title to Subsidiary or to Subsidiary using a general warranty
deed. The Services to be performed by ResCap or its controlled Affiliates under the
Servicing Agreement, shall, at Closing, constitute all



 









 







services necessary to operate the Subject Assets in all material respects as currently
operated. The sole business conducted by Subsidiary is and has been the ownership of the
Subject Assets, the Excluded Assets and the model homes sold by Subsidiary prior to June 30,
2008, and, except for obligations incurred in the ordinary course of business consistent
with past practice, pursuant to the transactions contemplated hereby or as otherwise set
forth in Section 3.1(e)(i) of the ResCap Disclosure Letters, Subsidiary has not
incurred any Liabilities other than Retained Liabilities, Assumed Liabilities and those
Liabilities satisfied in full prior to the Closing. None of the Assets have been sold,
transferred, conveyed or otherwise disposed of since the Cut-Off Date, other than the
Excluded Assets. Subsidiary has no employees.




          (ii) Except as set forth in Section 3.1(e)(ii) of the ResCap Disclosure
Letters, there are no pending or, to ResCap’s Knowledge, threatened Claims concerning
any Subject Asset that constitutes real property (the “Model Homes”) or the MSRAs or
the obligations or rights of ResCap or any of its controlled Affiliates or other Persons in
and to the Model Homes or under the MSRAs. Neither ResCap nor any of its controlled
Affiliates has received any written notice from any Governmental Entity that there currently
is any pending condemnation or eminent domain proceeding relating to the Model Homes, or
that any such proceeding is currently contemplated. To ResCap’s Knowledge, except as would
not reasonably be expected to result, individually or in the aggregate, in material
liability to Subsidiary or Buyer: (i) each Model Home has been used and occupied only as a
model home and/or as a sales office for the marketing of other homes in the applicable
Community or for storage of items relating to the applicable Community in accordance with
applicable Laws and for no other purpose, (ii) the construction of the Model Homes and all
improvements in the Communities in which the Model Homes are located (or the phase of the
Community in which the Model Home is located if the Community is being developed in phases)
have been completed in compliance with applicable Law to the extent necessary to allow for
use of the Model Homes as single family residences following Retrofit (as defined in the
MSRAs), (iii) except as set forth in Section 3.1(e)(ii) of the ResCap Disclosure
Letters, the applicable builder has complied with all state disclosure requirements and
community covenants in respect of the Subject Assets and (iv) no property underlying any of
the Model Homes contains Hazardous Materials in amounts that would violate applicable Law.




          (iii) Each MSRA is in full force and effect and, upon the execution and delivery of the
Limited Assignment and Assumption Agreement with respect to the Pool 1 MSRA, will be the
valid and binding obligation of Subsidiary to the extent assumed thereby and, to ResCap’s
Knowledge, the other parties thereto are in compliance in all material respects with all
terms and conditions in the MSRAs and, except as set forth in Section 3.1(e)(iii) of the
ResCap Disclosure Letters, there does not exist under the MSRAs any material violation,
breach or event of default, or alleged material violation, breach or event of default, or
event or condition that, after notice or lapse of time or both, would constitute a material
violation, breach or event of default thereunder on the part of Subsidiary or, to ResCap’s
Knowledge, any other party to the MSRAs. The MSRAs, the Note and the Guaranty constitute
the only Contracts in effect between ResCap or any of its controlled Affiliates, on the one
hand, and the applicable builder or any of its



 









 







Affiliates, on the other hand, concerning the Subject Assets. As of the Closing, other
than the MSRAs, the Note and the Guaranty, there are no Contracts or indebtedness to which
ResCap or any of its controlled Affiliates is a party with respect to which the Subject
Assets are bound.



          (f) Liabilities. Except for those items included as a reduction to the purchase price
in the calculation of the Proration Amount in accordance with Exhibit D, all liabilities
required to be paid prior to or as of 12:01 a.m. (New York City Time) on the Closing Date by ResCap
or any of its controlled Affiliates, including Subsidiary, in respect of any of the Interests or
Subject Assets (including under the MSRAs, the Note or the Guaranty) have been fully paid by ResCap
or the applicable controlled Affiliate. Without limiting the generality of the previous sentence,
(i) since its formation, Subsidiary has always been and is an entity disregarded from its sole
owner for U.S. Federal tax purposes and no deficiency for any Taxes has been asserted or assessed
with respect to any of the Interests or Subject Assets that has not been satisfied by payment,
settled or withdrawn, (ii) there is no audit, claim or controversy currently asserted or threatened
in writing with respect to the any of the Interests or Subject Assets in respect of any Taxes and
(iii) there are no Encumbrances or security interests on any of the Interests or Subject Assets
that arose in connection with any failure to pay any Taxes.




          (g) Brokers/Finders. No broker, investment banker, financial advisor or other Person
is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Interests (or the transfer of control of any of the Subject Assets as a result
thereof) pursuant to this Agreement based upon arrangements made by or on behalf of ResCap or any
of its controlled Affiliates with respect to which Buyer or Subsidiary has any obligation or
liability.




          (h) Non-Foreign Person. Seller’s sole owner for U.S. Federal tax purposes is not a
“foreign person” for purposes of Section 1445 of the Code.




          (i) No Other Representations or Warranties. Except for the representations and
warranties contained in this Section 3.1, neither ResCap or any of its controlled
Affiliates or other Persons makes any express or implied representation or warranty on behalf of
ResCap or Seller or with respect to the Interests or Assets.




     Section 3.2 Representations and Warranties of Buyer. Buyer represents and warrants to
ResCap as of the date hereof and as of the Closing Date (except with respect to any representation
or warranty made as of a specified date, which shall be made only as of such date) that:



          (a) Due Organization. Buyer is duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation and has all requisite limited liability company
power and authority to enter into this Agreement and to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.




          (b) Binding Effect. The execution and delivery of this Agreement, the performance of
its obligations hereunder and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite limited liability company action of Buyer.




 









 







This Agreement has been duly executed and delivered by Buyer. This Agreement, assuming the
due authorization, execution and delivery by ResCap, Seller and Subsidiary, constitutes a legally
binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to
bankruptcy, insolvency, receivership, moratorium, reorganization or similar laws affecting the
rights of creditors generally. As of the Closing Date with respect to the Limited Assignment and
Assumption Agreement, Ancillary Transfer Documents, Mutual Release and the Servicing Agreement, (i)
the execution and delivery of each such Transaction Document, the performance of Buyer’s
obligations thereunder and the consummation of the transactions contemplated thereby shall have
been duly authorized by all requisite limited liability company or corporate power, as applicable,
on the part of Buyer; (ii) each such Transaction Document shall have been duly executed and
delivered by Buyer; and (iii) each such Transaction Document shall constitute a legally binding
obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to bankruptcy,
insolvency, receivership, moratorium, reorganization or similar laws affecting the rights of
creditors generally.




          (c) Consents and Approvals. No consent, approval, waiver, authorization, notice or
filing is required to be obtained from or made with any Governmental Entity or self-regulatory
organization or any other Person, by Buyer in connection with the execution, delivery and
performance of any of the Transaction Documents.




          (d) Non-Contravention. The execution, delivery and performance by Buyer of each of
the Transaction Documents, and the consummation of the transactions contemplated hereby and
thereby, do not and will not (i) violate any provision of the organizational documents of Buyer,
(ii) result in the material breach of, or constitute a material default under, or result in the
termination, cancellation, modification or acceleration (whether after the filing of notice or the
lapse of time or both) of any material right or obligation of Buyer under, or result in a loss of
any material benefit to which Buyer is entitled under, any material Contract, or result in the
creation of any Encumbrance upon any of assets of Buyer, or (iii) violate or result in a breach of
or constitute a default under any Law to which Buyer is subject.




          (e) Brokers/Finders. No broker, investment banker, financial advisor or other Person
is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transfer of Interests (or the transfer of control of any of the Subject Assets
as a result thereof) pursuant to this Agreement based upon arrangements made by or on behalf of
Buyer with respect to which ResCap or any of its controlled Affiliates has any obligation or
liability.




          (f) No Other Representations or Warranties. Except for the representations and
warranties contained in this Section 3.2, neither Buyer nor any of its Affiliates or other
Persons makes any express or implied representation or warranty on behalf of Buyer.




ARTICLE IV




COVENANTS 




     Section 4.1 Commercially Reasonable Efforts.



 









 





          (a) Each of the Parties shall cooperate and use commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, and assist and cooperate with the
other Parties to this Agreement in doing, all things necessary or desirable under applicable Law to
consummate, in the most expeditious manner practicable, the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, ResCap shall use commercially
reasonable efforts to obtain, prior to the Closing Date, all Required Seller Consents;
provided, that, ResCap shall not have any obligation to pay any material fee to any Person
for the purpose of obtaining any Required Seller Consent or any material costs and expenses of any
Person resulting from the process of obtaining any Required Seller Consent. Neither Buyer nor any
of its Affiliates shall have any obligation to obtain any Required Seller Consents;
provided, that, Buyer shall, and shall cause its Affiliates to, provide reasonable
cooperation in connection with ResCap’s efforts to obtain such Required Seller Consents. In
connection with seeking or obtaining any Required Seller Consent, neither ResCap nor any of its
controlled Affiliates shall consent to the imposition of any limitations, restrictions or
conditions applicable to Buyer, Subsidiary or any of the Subject Assets (including any modification
of the MSRAs).




     Section 4.2 Additional Covenants.



          (a) From the date of this Agreement through the Closing, (i) Seller shall not, directly or
indirectly, sell or enter into any definitive agreement to sell any of the Interests or the Subject
Assets, and (ii) neither Seller nor any of its Affiliates shall, directly or indirectly, terminate,
amend or modify the MSRAs.




          (b) From the date of this Agreement through the period ending 60 days after the Closing,
Seller shall use its reasonable best efforts to perform its obligation set forth in Section
4.2(b) of the ResCap Disclosure Letters and, if it fails to satisfy such obligations during
that period, Buyer and Subsidiary shall have the rights described therein.




     Section 4.3 Servicing and Asset Management. At the Closing, Buyer, Subsidiary and ResCap
shall enter into the servicing agreement attached hereto as Exhibit E (the “Servicing Agreement”).
From and after the Closing, ResCap shall direct the applicable builder to pay to Buyer in
accordance with Buyer’s payment instructions all amounts due to “Owner” with respect to the Subject
Assets under the MSRAs, except as otherwise requested in writing by Buyer in connection with
ResCap’s performance of services pursuant to the Servicing Agreement. If at any time after the
Closing, ResCap or any of its controlled Affiliates receives proceeds or other payments in respect
of any of the Subject Assets, ResCap shall, or shall cause its controlled Affiliate to (if
applicable), (i) accept and hold such proceeds or payments in trust for the account and sole
benefit of Buyer and have no equitable or beneficial interest in any such proceeds or payments and
(ii) deliver such proceeds and payments (free of any withholding, setoff, recoupment or deduction
of any kind) promptly (but in any event no later than three Business Days after the date on which
such Person receives such proceeds or payment) to Buyer or at Buyer’s request, to Subsidiary.



     Section 4.4 Excluded Asset Sales. Buyer acknowledges that ResCap and Seller shall retain
all beneficial ownership interest in any Excluded Assets that are not sold to a third party before
Closing, notwithstanding Subsidiary’s continuing record ownership of such Excluded



 









 







Assets after the Closing. In accordance therewith, Subsidiary shall, and Buyer shall cause
Subsidiary to, (a) sell, transfer or otherwise dispose of the Excluded Assets, including completion
of any sale pursuant to any outstanding contract of sale or, if any such contract of sale
terminates, transfer to Seller or any of its Affiliates or any third Person at Seller’s expense all
right, title and interest in such Excluded Asset, in each case in accordance with the written
instructions of ResCap or Seller, and (b) to collect for the account of ResCap and/or Seller all
payments and other benefits under the MSRAs or the Note relating to such Excluded Assets, including
any lease payments with respect to such Excluded Assets pursuant to the MSRAs or any proceeds
received upon the sale of any Excluded Asset. If at any time after the Closing, Subsidiary, Buyer
or any of their respective controlled Affiliates receives proceeds or other payments in respect of
any of the Excluded Assets, Buyer and Subsidiary shall, or shall cause the controlled Affiliate to
(if applicable), (i) accept and hold such proceeds or payments in trust for the account and sole
benefit of ResCap and have no equitable or beneficial interest in any such proceeds or payments and
(ii) deliver such proceeds and payments (free of any withholding, setoff, recoupment or deduction
of any kind) promptly (but in any event no later than three Business Days after the date on which
such Person receives such proceeds or payment) to ResCap. From and after the Closing, Subsidiary
shall not, and Buyer shall cause Subsidiary not to, cause or permit any Excluded Asset to become
subject to any Encumbrance prior to the sale thereof pursuant to this Section 4.4.
Notwithstanding anything to the contrary set forth in this Section 4.4, (i) Subsidiary shall be
under no obligation to (x) take any action that would be in violation of applicable Law or any
contract with respect to which Subsidiary is bound or subject or (y) except as set forth in those
Contracts executed and delivered to Buyer prior to the date hereof, or in any other Contract
(including deeds) substantially in the form attached hereto as Exhibit H, make any representations
or warranties or provide any indemnification in respect of any of the Excluded Assets or otherwise
relating to any sale or transfer thereof, and (ii) any Liability incurred by Subsidiary in
connection with any sale, transfer, assignment or other disposition of any Excluded Assets or
otherwise arising from Subsidiary’s compliance with this Section 4.4 shall constitute “Retained
Liabilities” for purposes of Section 7.2(a)(iii).



     Section 4.5 Tax Matters.



          (a) Seller shall be liable for and Seller shall pay, or cause to be paid, any and all Taxes
applicable to the Interests or Subject Assets attributable to periods (or portions thereof) ending
on or before the Closing Date. Buyer shall be liable for and shall pay all Taxes applicable to the
Interests or Subject Assets attributable to periods (or portions thereof) beginning on the day
after the Closing Date.




          (b) Except with respect to Taxes included in the calculation of the Proration Amount
hereunder, Seller or Buyer, as the case may be, shall promptly reimburse any Tax paid by the other
party all or a portion of which Tax is the responsibility of Seller or Buyer in accordance with the
terms of this Section 4.4. Within a reasonable time prior to the payment of any such Tax,
the party paying such Tax shall give notice to the other party of the Tax payable and the portion
that is the liability of each party, although failure to do so shall not relieve the other party
from its liability hereunder except to the extent that it is materially prejudiced by such delay.




 









 








          (c) After the Closing, Seller and Buyer shall, as reasonably requested by the other, (i)
assist the other party in preparing any Tax Returns relating to the Interests or Subject Assets
which such other party is responsible for preparing and filing; (ii) cooperate fully in preparing
for any audit of, or dispute with taxing authorities regarding, and any judicial or administrative
proceeding relating to, liability for Taxes, in the preparation or conduct of litigation or
investigation of claims, and in connection with the preparation of financial statements or other
documents to be filed with any taxing authority, in each case with respect to the Interests or
Subject Assets; (iii) make available to the other and to any taxing authority as reasonably
requested all information, records, and documents relating to Taxes relating to the Interests or
Subject Assets; (iv) provide timely notice to the other party in writing of any pending or
threatened Tax audits or assessments relating to the Interests or Subject Assets for taxable
periods for which the other party is responsible under this Section 4.4; and (v) furnish
the other party with copies of all correspondence received from any taxing authority in connection
with any taxable audit or information request with respect to any Tax periods for which the other
is responsible under this Section 4.4. Until the seventh anniversary of the Closing Date,
Seller will, to the extent necessary in connection with any Taxes (including the tax basis of any
acquired asset) or other matters relating to the Interests or Subject Assets for any period ending
at or prior to the Closing, and without charge to Buyer, retain all original books, records and
other documents and all electronically archived data not deliverable to Buyer at Closing related to
the Interests or Subject Assets. Any information obtained pursuant to this Section 4.4 or
pursuant to any other Section hereof providing for the sharing of information or review of any Tax
Return or other schedule relating to Taxes shall be kept confidential by the Parties, except to the
extent such information is required to be disclosed by Law, regulation or judicial order.




          (d) Seller shall prepare and file, and Buyer shall cooperate in the preparation and filing of,
all Tax Returns, if any, relating to any Transfer Taxes that become payable in connection with the
transactions contemplated by this Agreement.




     Section 4.6 Further Assurances. From time to time after the Closing, each Party hereto
shall, and shall cause its Affiliates, promptly to execute, acknowledge and deliver any other
assurances or documents or instruments of transfer reasonably requested by the other Party hereto
and necessary for the requesting Party to satisfy obligations hereunder or to obtain the benefits
of the transactions contemplated hereby.



ARTICLE V




CONDITIONS TO CLOSING




     Section 5.1 Conditions to the Obligations of each of the Parties. The obligations of the
Parties hereto to effect the Closing are subject to the satisfaction of the following conditions:



          (a) No Injunctions or Restraints; Illegality. No judgment, order, injunction or decree
issued by any court or agency of competent jurisdiction or other legal restraint or prohibition
preventing the transactions contemplated by this Agreement or the other Transaction Documents shall
be in effect and no statute, rule, regulation, order, injunction or decree shall have been enacted,
promulgated or enforced by any Governmental Entity that prohibits or makes




 









 







illegal the consummation of the transactions contemplated by this Agreement or the other
Transaction Documents.




     Section 5.2 Conditions to the Obligations of ResCap and Seller. The obligations of ResCap
and Seller to effect the Closing are subject to the satisfaction of the following conditions:



          (a) Representations and Warranties. The representations and warranties of Buyer
contained in this Agreement shall be true and correct (without giving effect to any qualifications
as to materiality or similar qualifications therein) in all material respects as of the date hereof
and at and as of the Closing, as if made at and as of such time (or if made as of a specific date,
at and as of such date); provided, that the representations and warranties set forth in
Sections 3.2(a), 3.2(b) and 3.2(e) shall be true and correct in all
respects.




          (b) Covenants. Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by Buyer at or prior to the Closing Date and shall
have delivered all documentation required to be delivered by Buyer pursuant to Section 2.7.




          (c) Certificate. Buyer shall have delivered to ResCap a certificate, signed by a duly
authorized representative of Buyer and dated the Closing Date, to the effect that the conditions
set forth in Sections 5.2(a) and 5.2(b) have been satisfied.




     Section 5.3 Conditions to the Obligations of Buyer. The obligations of Buyer to effect the
Closing are subject to the satisfaction of the following conditions:



          (a) Representations and Warranties. The representations and warranties of ResCap and
Seller contained in this Agreement shall be true and correct (without giving effect to any
qualifications as to materiality or similar qualifications therein) in all material respects as of
the date hereof and at and as of the Closing, as if made at and as of such time (or if made as of a
specific date, at and as of such date); provided, that the representations and warranties
set forth in Sections 3.1(a), 3.1(b), 3.1(e)(i), 3.1(f) and
3.1(g) shall be true and correct in all respects.




          (b) Covenants. ResCap and Seller shall have, and shall have caused each of their
respective controlled Affiliates to have, performed in all material respects all of their
respective obligations hereunder required to be performed by such Person at or prior to the Closing
Date and shall have delivered all documentation required to be delivered by ResCap or Seller
pursuant to Section 2.6.




          (c) Consents and Approvals. All Required Seller Consents shall have been obtained or
made (without the imposition of any limitations, restrictions or conditions applicable to Buyer,
Subsidiary, the Interests or the Subject Assets (including any modification of the MSRAs or the
Note)).




          (d) Certificate. ResCap and Seller shall have delivered to Buyer a certificate,
signed by a duly authorized officer of ResCap and dated the Closing Date, to the effect that the
conditions set forth in Sections 5.3(a) through (c) have been satisfied.




 









 








ARTICLE VI




TERMINATION




     Section 6.1 Termination. This Agreement may be terminated at any time prior to the
Closing:



          (a) by written agreement of ResCap and Buyer;




          (b) by any Party, upon written notice to the other Parties, in the event that the Closing does
not occur on or before 5:00 p.m. (New York City Time) on October 6, 2008 (the “Outside
Date”); or




          (c) by any Party, upon written notice to the other Parties, in the event that any Law shall be
enacted or any Governmental Entity shall have issued any order, decree or injunction or taken any
other action restraining, enjoining or prohibiting any of the transactions contemplated by this
Agreement or the other Transaction Documents, and such order, decree, injunction or other action
shall have become final and nonappealable.




     Section 6.2 Effect of Termination. In the event of any termination of this Agreement as
provided in Section 6.1, this Agreement (other than this Section 6.2 and Sections 8.1 through 8.11,
which shall remain in full force and effect) shall forthwith become wholly void and of no further
force and effect.



ARTICLE VII




INDEMNIFICATION 




     Section 7.1 Survival of Representations, Warranties and Covenants. The representations and
warranties set forth in Article III of this Agreement shall survive the Closing until the second
anniversary of the Closing Date, except that the representations and warranties set forth in
Sections 3.1(a), 3.1(b), 3.1(e)(i), 3.1(g), 3.2(a), 3.2(b) and 3.2(e) shall survive the Closing
until the expiration of the applicable statute of limitations. The covenants in this Agreement
shall survive the Closing in accordance with their terms.



     Section 7.2 Indemnification.



          (a) From and after the Closing, ResCap shall indemnify and defend Buyer, its Affiliates
(including, for the avoidance of doubt, Subsidiary), managing member, officers, directors,
employees, agents, successors and assigns (each a “Buyer Indemnified Party”) from and
against any and all actions, suits, claims, proceedings, damages, losses, deficiencies,
liabilities, penalties, fines, interest, costs, damages, judgments, amounts paid in settlement and
expenses (including, without limitation, the cost and expenses of any litigations, actions,
judgments and settlements related thereto, and the reasonable costs and expenses of attorneys and
accountants incurred in the investigation or defense thereof or the enforcement of rights
hereunder) (collectively, “Losses”) related to or arising out of any one or more of the
following:




 









 









          (i) any breach of any representation or warranty made by ResCap or any of its
controlled Affiliates in this Agreement (without giving effect to any qualifications as to
materiality or similar qualifications contained in such representations or warranties);




          (ii) any breach by ResCap or Seller of any covenant to be performed or complied with by
ResCap or Seller under this Agreement; or




          (iii) the Retained Liabilities.



          (b) From and after the Closing, Buyer shall indemnify and defend ResCap, its Affiliates,
managing member, officers, directors, employees, agents, successors and assigns (each a “ResCap
Indemnified Party”) from and against any and all Losses related to or arising out of any one or
more of the following:





          (i) any breach of any representation or warranty made by Buyer in this Agreement
(without giving effect to any qualifications as to materiality or similar qualifications
contained in such representations or warranties);




          (ii) any breach by Buyer of any covenant to be performed or complied with by Buyer
under this Agreement;




          (iii) the Assumed Liabilities; or




          (iv) the ownership or use of the Subject Assets after the Closing, except to the extent
such Losses constitute Retained Liabilities.



     Section 7.3 Notice of Claim; Defense.



          (a) If any third party institutes or asserts any claim, demand, investigation, action or
proceeding (each of the foregoing, a “Proceeding”) against any Person entitled to
indemnification under this Agreement (an “Indemnified Party”) that may give rise to Losses
for which a party (an “Indemnifying Party”) may be liable for indemnification under this
Article VII (a “Third-Party Claim”), then the Indemnified Party shall promptly send
to the Indemnifying Party a written notice specifying (to the extent such information is reasonable
available) the nature of such claim and, if available, the estimated amount of all related
Liabilities, which estimate shall be subject to change (a “Claim Notice”). The
Indemnifying Party shall be relieved of its indemnification obligations under this Article
VII to the extent that it is materially prejudiced by the failure of the Indemnified Parties to
provide a timely and adequate Claim Notice. If a Claim Notice has been given prior to the
expiration of the applicable representations and warranties, then the relevant representation and
warranties shall survive as to such claim until such claim has been finally resolved.




          (b) The Indemnifying Party will have 20 days (or such lesser number of days as set forth in
the Claim Notice as may be required by court proceeding in the event of a litigation matter) after
receipt of the Claim Notice to notify the Indemnified Party that it desires to assume and
thereafter conduct the defense of the Third-Party Claim with counsel of its choice


 









 










reasonably satisfactory to the Indemnified Party, unless the Indemnified Party has notified
the Indemnifying Party that it has determined in good faith that (i) there is a reasonable
probability that such claim may materially and adversely affect it or its Affiliates other than as
a result of money damages, (ii) a conflict of interest exists in respect of such claim, or (iii)
there are specific defenses available to the Indemnified Party that are different from or
additional to those available to the Indemnifying Party and that could be adverse to the
Indemnifying Party. If the Indemnifying Party assumes the defense of the Third Party Claim, it
shall have conclusively established its obligation to indemnify the Indemnified Party with respect
to such Third Party Claim. The Indemnified Parties may participate, at their own expense and
through legal counsel of their choice, in any such Proceeding; provided, that the
Indemnified Parties and their counsel shall reasonably cooperate with the Indemnifying Party and
its counsel in connection with such Proceeding. The Indemnifying Party shall not (i) consent to,
or enter into, any compromise or settlement which commits the Indemnified Party to take, or to
forbear to take, any action or does not provide for a full and complete written release by such
third party of the Indemnified Party, (ii) consent to, or enter into, any compromise or settlement,
consent to the entry of any judgment, or admit any liability or wrongdoing with respect to any
Third-Party Claim unless it involves only the payment of money damages all of which will be borne
by the Indemnifying Party in accordance with its indemnification obligations hereunder and does not
impose an injunction or other equitable relief upon the Indemnified Party or otherwise involve any
admission of liability or wrongdoing by the Indemnified Party, in each case, without the
Indemnified Party’s prior written consent, which shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, if the Indemnifying Party elects not to retain counsel and
assume control of such defense or if both the Indemnifying Party and any Indemnified Party are
parties to or subjects of such Proceeding and conflicts of interests exist between the Indemnifying
Party and such Indemnified Party, then the Indemnified Parties shall retain counsel reasonably
acceptable to the Indemnifying Party in connection with such Proceeding and assume control of the
defense in connection with such Proceeding, and, to the extent the Indemnified Party is entitled to
indemnification hereunder in connection with such Proceeding, the fees, charges and disbursements
of not more than one firm as such counsel per jurisdiction selected by the Indemnified Parties
shall be reimbursed by the Indemnifying Party. Under no circumstances will the Indemnifying Party
have any liability in connection with any settlement of any Proceeding that is entered into without
its prior written consent (which shall not be unreasonably withheld, conditioned or delayed).




          (c) From and after the delivery of a Claim Notice, at the reasonable request of the
Indemnifying Party, each Indemnified Party shall (i) reasonably cooperate with the Indemnifying
Party in connection with the defense of any Third-Party Claim and (ii) grant the Indemnifying Party
and its counsel, experts and representatives reasonable access, during normal business hours, to
the books, records, personnel (including as witnesses or deponents at trial and during the
discovery process) and properties of the Indemnified Party to the extent reasonably related to the
Claim Notice, in the case of each of clauses (i) and (ii) of this sentence, at no
cost to the Indemnifying Party (other than for reasonable out of pocket expenses of the Indemnified
Parties).




          (d) From and after the Closing, except in the case of fraud, the indemnification obligations
set forth in this Article VII are the exclusive remedy of the



 









 






Indemnified Parties (a) for any inaccuracy in any of the representations or any breach of any
of the warranties or covenants contained herein or (b) otherwise with respect to this Agreement and
the transactions contemplated by this Agreement and matters arising out of, relating to or
resulting from the subject matter of this Agreement, whether based on statute, contract, tort,
property or otherwise, and whether or not arising from the relevant Party’s sole, joint or
concurrent negligence, strict liability or other fault.




     Section 7.4 Limitations on Indemnification.



          (a) To the extent that a Party hereto shall have any obligation to indemnify and hold harmless
any other Person hereunder, such obligation shall not include lost profits or other consequential,
special, punitive, incidental or indirect damages (and the injured Party shall not recover for such
amounts), except to the extent such amounts are required to be paid to a third party other than an
Indemnified Party or a Person affiliated therewith.




          (b) Except in the case of fraud or intentional misrepresentation, ResCap shall not have any
obligation to indemnify any Buyer Indemnified Party pursuant to Section 7.2(a)(i) relating
to or arising out of a breach of any of the representations and warranties made by ResCap and
Seller pursuant to Section 3.1(e)(ii) or (iii) unless and until the aggregate
amount of all Losses subject to indemnification thereunder shall exceed 0.5% of the Firm Bid Price,
as adjusted pursuant to Sections 2.3 and 2.4 (the “Deductible”), and once
the Deductible is exceeded, ResCap shall be liable for only those Losses in excess of the
Deductible.




          (c) Except in the case of fraud or intentional misrepresentation, in no event shall the
aggregate liability of ResCap for Losses pursuant to Section 7.2(a)(i) relating to or
arising out of a breach of any of the representations and warranties made by ResCap and Seller
pursuant to Section 3.1(e)(ii) or (iii) exceed an amount equal to the Firm Bid
Price, as adjusted pursuant to Sections 2.3 and 2.4 (the “Cap”).




          (d) Notwithstanding anything to the contrary in this Agreement, the Parties agree that neither
the Deductible nor the Cap shall apply with respect to any Losses pursuant to which any Buyer
Indemnified Party is entitled to indemnification pursuant to Section 7.2(a)(iii).




          (e) Notwithstanding anything contained herein to the contrary, the amount of any Losses
incurred or suffered by an Indemnified Person shall be calculated after giving effect to (i) any
insurance proceeds actually received by the Indemnified Person (or any of its controlled Affiliates
that are Indemnified Persons) with respect to such Losses and (ii) any other recoveries pursuant to
indemnification rights directly relating to such Loss obtained by the Indemnified Person (or any of
its controlled Affiliates that are Indemnified Persons) from any other third party, less, in the
case of each of clauses (i) and (ii) of this sentence, all Losses related to the
pursuing and receipt of such recoveries and any related recoveries. If any such net proceeds or
recoveries are actually received by an Indemnified Person (or any of its controlled Affiliates that
are Indemnified Persons) with respect to any Losses after an Indemnifying Person has made a payment
to the Indemnified Person with respect thereto, the Indemnified Person (or such Affiliate) shall
pay to the Indemnifying Person the amount of such net proceeds or recoveries (up to the amount of
the Indemnifying Person’s payment).




 









 








          (f) Upon making any payment to an Indemnified Person in respect of any Losses, the
Indemnifying Person shall, to the extent of such payment, be subrogated to all rights of the
Indemnified Person (and its Affiliates) against any insurance company from which the Indemnified
Person (and its controlled Affiliates that are Indemnified Persons) has insurance in respect of the
Losses to which such payment relates. Such Indemnified Person (and its controlled Affiliates that
are Indemnified Persons) and Indemnifying Person shall execute upon request all instruments
reasonably necessary to evidence or further perfect such subrogation rights. To the extent the
exercise of rights under this Section 7.4(f) directly results in higher insurance premiums
for the Indemnified Person, the incremental cost of such higher premiums shall constitute “Losses.”




          (g) If (i) the Indemnifying Party has expressly confirmed in writing its obligation to
indemnify an Indemnified Party for a Third Party Claim (or been deemed to have confirmed its
obligation to indemnify by assuming the defense of such Third Party Claim) and (ii) the Indemnified
Party is entitled to indemnification from a third party unaffiliated with such Indemnified Party,
then, promptly at the written request of the Indemnifying Party, the Indemnified Party shall use
commercially reasonable efforts to enforce its rights in respect of such third party
indemnification; provided, that (x) any out-of-pocket costs or expenses incurred by the
Indemnified Party in connection with such efforts shall constitute Losses hereunder and (y) the
Indemnified Party shall not be required to bring any action or pursue any claim under arbitration
or mediation to enforce its rights or otherwise take any action that the Indemnified Party
determines in its reasonable judgment would be detrimental in any material respect to any ongoing
business relationship with such third party. Notwithstanding anything to the contrary in this
Section 7.4, ResCap shall not have any right, directly or indirectly, to pursue any
indemnification rights of Buyer or Subsidiary under the MSRAs or otherwise, except to the extent
directed in writing by Buyer pursuant to the Servicing Agreement.




          (h) Each Indemnified Party shall use commercially reasonable efforts to mitigate any Losses,
whether by asserting claims against a third party (subject to clause (g) above) or by
otherwise qualifying for a benefit that would reduce or eliminate an indemnified matter;
provided, that no party shall be required to use such efforts if such efforts (i) would
require such party to pay any out-of-pocket amount; provided, however, that if an
Indemnified Party has actual knowledge of an opportunity to mitigate any Loss that involves paying
an out-of-pocket amount, then such Indemnified Party shall provide reasonable notification to the
Indemnifying Party of such opportunity and if, after receipt of such notification, the Indemnifying
Party elects to provide an Indemnified Party with immediately available funds with instructions to
use such funds to mitigate any Losses, such Indemnified Party shall use such funds for purposes of
satisfying its obligations under this subsection (h) in accordance with the reasonable
instructions of the Indemnifying Party (it being understood and agreed that funds supplied by an
Indemnifying Party to an Indemnified Party and used to mitigate Losses shall not represent payment
by the Indemnifying Party to the Indemnified Party for reimbursement of indemnified Losses);
provided, further, that failure by the Indemnified Party to provide any such notification shall not
relieve the Indemnifying Party of any of its indemnification obligations hereunder except to the
extent, and solely to the extent, the Indemnified Party fails to use commercially reasonable
efforts to notify the Indemnifying Party of an opportunity to mitigate any Loss as contemplated
hereby and the Indemnifying Party is materially prejudiced by such



 









 







failure, or (ii) otherwise would be detrimental in any material respect to any ongoing
business relationship of the Indemnified Party with any third party.




ARTICLE VIII




MISCELLANEOUS




     Section 8.1 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by overnight courier or by facsimile (with confirmation copies
delivered personally or by courier on or before the third Business Day after such facsimile
delivery) to the respective Parties at the following addresses (or at such other address for a
Party as shall be specified by like notice):



	 	 	 
	If to Seller, Subsidiary (prior to Closing),

	 	Residential Funding Company, LLC
	
or ResCap:

	 	One Meridian Crossings
	 

	 	Suite 100
	 

	 	Minneapolis, MN 55423
	 

	 	Attention:    President
	 

	 	                    Business Capital Group
	 
	 	 
	 

	 	Telephone No.: (952) 857-6958
	 

	 	Telecopier No.: (952) 857-6943
	 
	 	 
	With a copy to:

	 	Residential Funding Company, LLC
	 

	 	One Meridian Crossings
	 

	 	Suite 100
	 

	 	Minneapolis, MN 55423
	 

	 	Attention:    Chief Counsel
	 

	 	                    Business Capital Group
	 

	 	Telephone No.: (952) 857-6911
	 

	 	Telecopier No.: (952) 857-6949
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Skadden, Arps, Slate, Meagher & Flom LLP
	 

	 	One Rodney Square
	 

	 	Wilmington, DE 19801
	 

	 	Attention: Allison Land
	 

	 	Facsimile: 888-329-3021






 









 







	 	 	 
	If to Buyer or Subsidiary

	 	Cerberus Capital Management, L.P.
	(after the Closing):

	 	299 Park Avenue
	 

	 	New York, NY 10171
	 

	 	Attention: Mark A. Neporent
	 

	 	Facsimile: (212) 891-1540
	 
	 	 
	With a copy to:

	 	Schulte Roth & Zabel LLP
	 

	 	919 Third Avenue
	 

	 	New York, New York 10022
	 

	 	Attention:     John M. Pollack
	 

	 	Facsimile:     (212) 593-5955






     Copies to be sent as indicated above shall be courtesy copies and failure to deliver any such
courtesy copies shall not invalidate any notice properly delivered to ResCap or Buyer as set forth
above.



     Section 8.2 Amendment; Waiver. Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by
ResCap and Buyer, or in the case of a waiver, by the Party against whom the waiver is to be
effective. No failure or delay by any Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or privilege.



     Section 8.3 No Assignment or Benefit to Third Parties. This Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective successors, legal
representatives and permitted assigns. No Party to this Agreement may assign any of its rights or
delegate any of its obligations under this Agreement, by operation of Law or otherwise, without the
prior written consent of the other Parties hereto. Nothing in this Agreement, express or implied,
is intended to confer upon any Person other than ResCap, Seller, Buyer and Subsidiary and each of
their respective successors, legal representatives and permitted assigns, any rights or remedies
under or by reason of this Agreement; provided, that, the Buyer Indemnified Parties (solely with
respect to their indemnification rights pursuant to this Agreement) and the ResCap Indemnified
Parties (solely with respect to their indemnification rights pursuant to this Agreement) shall be
third party beneficiaries of such Sections of this Agreement, entitled to enforce those specified
provisions hereof.



     Section 8.4 Entire Agreement. This Agreement (including the Exhibits, the ResCap
Disclosure Letters hereto and any certificate or document required to be executed and delivered in
connection with the execution of this Agreement or the consummation of the transactions
contemplated hereby), the other Transaction Documents contain the entire agreement between the
Parties hereto with respect to the subject matter hereof and thereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.



     Section 8.5 Fulfillment of Obligations. Any obligation of any Party to any other Party
under this Agreement, which obligation is performed, satisfied or fulfilled completely by an



 









 







Affiliate of such Party, shall be deemed to have been performed, satisfied or fulfilled by such
Party.



     Section 8.6 Expenses. Except as otherwise specified in this Agreement, all costs and
expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred
in connection with this Agreement and the transactions contemplated hereby and thereby shall be
paid by the Party incurring such costs and expenses, whether or not the Closing shall have
occurred.



     Section 8.7 Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by
Jury. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Any action or proceeding in
respect of any claim arising out of or related to this Agreement or the transactions contained in
or contemplated hereby against any Party hereto shall be brought in the Chancery Court of the State
of Delaware, any other state court of the State of Delaware or the United States District Court for
the District of Delaware (the “Chosen Courts”), and solely in connection with claims arising under
this Agreement or the transactions that are the subject of this Agreement, each Party: (i)
irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection
to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection
that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party hereto
and (iv) agrees that service of process upon such Party in any such action or proceeding shall be
effective if notice is given in accordance with Section 8.1 of this Agreement. Each Party hereto
irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.



     Section 8.8 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and the same Agreement.
Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles will
be deemed as sufficient as if actual signature pages had been delivered.



     Section 8.9 Headings. The heading references herein and the table of contents hereof are
for convenience purposes only, and shall not be deemed to limit or affect any of the provisions
hereof.



     Section 8.10 Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof. If any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision
shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application thereof, in any other
jurisdiction.



 









 






     Section 8.11 Commitment Regarding Actions of Controlled Affiliates. With respect to any
covenant requiring any controlled Party or controlled Affiliate of a Party to take an action or
omit to take an action, such Party shall cause such controlled Affiliate to comply with such
covenant. Any failure by any Party’s controlled Affiliates to do so shall also constitute a breach
of such covenant by such Party.



     Section 8.12 Specific Performance. Each Party acknowledges that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement by such Party and
that any such breach would cause the other Party hereto irreparable harm. Accordingly, each Party
hereto also agrees that, in the event of any breach or threatened breach of the provisions of this
Agreement by such Party, the other Party hereto shall be entitled to equitable relief without the
requirement of posting a bond or other security, including in the form of injunctions and orders
for specific performance.



[Signature page follows.]




 









 








     IN WITNESS WHEREOF, each of the Parties has executed or caused this Agreement to be executed
as of the date first written above.



	 	 	 	 	 
	 	RESIDENTIAL CAPITAL, LLC

 	 
	 	By:  	/s/ James Young
 	 
	 	 	Name:  	James Young 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	DOA HOLDING PROPERTIES, LLC

 	 
	 	By:  	/s/ David Flavin
 	 
	 	 	Name:  	David Flavin 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	DOA PROPERTIES IIIB (KB MODELS), LLC

 	 
	 	By:  	/s/ David Flavin
 	 
	 	 	Name:  	David Flavin 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	MHPOOL HOLDINGS LLC

 	 
	 	By:  	/s/ Ronald J. Kravit
 	 
	 	 	Name:  	Ronald J. Kravit 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



EXHIBIT A




List of Assets




 









 








Pool 1 — All Assets




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid	 	File Number	 	Allocated Firm Bid
	 	6913	 	 	 
	 	$	131,221	 	 	 	12632	 	 	$	106,972	 
	 	6914	 	 	 
	 	$	118,521	 	 	 	12634	 	 	$	113,927	 
	 	6915	 	 	 
	 	$	97,355	 	 	 	12635	 	 	$	125,370	 
	 	7428	 	 	 
	 	$	185,406	 	 	 	12636	 	 	$	111,795	 
	 	7429	 	 	 
	 	$	161,741	 	 	 	12082	 	 	$	149,227	 
	 	7430	 	 	 
	 	$	123,415	 	 	 	12083	 	 	$	163,817	 
	 	7431	 	 	 
	 	$	94,677	 	 	 	12343	 	 	$	138,898	 
	 	7521	 	 	 
	 	$	121,025	 	 	 	12344	 	 	$	138,898	 
	 	7042	 	 	 
	 	$	143,835	 	 	 	12345	 	 	$	365,468	 
	 	7043	 	 	 
	 	$	141,355	 	 	 	12346	 	 	$	380,294	 
	 	7441	 	 	 
	 	$	109,941	 	 	 	11681	 	 	$	147,206	 
	 	7442	 	 	 
	 	$	128,128	 	 	 	11682	 	 	$	154,067	 
	 	7853	 	 	 
	 	$	157,062	 	 	 	12219	 	 	$	109,465	 
	 	7854	 	 	 
	 	$	162,849	 	 	 	12220	 	 	$	136,994	 
	 	7855	 	 	 
	 	$	185,996	 	 	 	11361	 	 	$	134,520	 
	 	7856	 	 	 
	 	$	177,729	 	 	 	11362	 	 	$	119,569	 
	 	7857	 	 	 
	 	$	197,570	 	 	 	11363	 	 	$	112,803	 
	 	7566	 	 	 
	 	$	132,207	 	 	 	10585	 	 	$	105,163	 
	 	7567	 	 	 
	 	$	112,283	 	 	 	10586	 	 	$	122,231	 
	 	7568	 	 	 
	 	$	99,595	 	 	 	10587	 	 	$	81,270	 
	 	7569	 	 	 
	 	$	117,143	 	 	 	10595	 	 	$	88,157	 
	 	7570	 	 	 
	 	$	133,735	 	 	 	10596	 	 	$	84,779	 
	 	7571	 	 	 
	 	$	149,487	 	 	 	11452	 	 	$	97,756	 
	 	7465	 	 	 
	 	$	113,624	 	 	 	11457	 	 	$	88,662	 
	 	7466	 	 	 
	 	$	89,861	 	 	 	10588	 	 	$	89,035	 
	 	7467	 	 	 
	 	$	102,615	 	 	 	11628	 	 	$	76,479	 
	 	8570	 	 	 
	 	$	103,469	 	 	 	11629	 	 	$	83,449	 
	 	8571	 	 	 
	 	$	138,399	 	 	 	11630	 	 	$	89,762	 
	 	8742	 	 	 
	 	$	108,087	 	 	 	11631	 	 	$	120,690	 
	 	8743	 	 	 
	 	$	133,628	 	 	 	11632	 	 	$	84,932	 
	 	9296	 	 	 
	 	$	175,880	 	 	 	11633	 	 	$	80,175	 
	 	8117	 	 	 
	 	$	122,625	 	 	 	11634	 	 	$	77,588	 
	 	8118	 	 	 
	 	$	127,755	 	 	 	11635	 	 	$	82,243	 
	 	8331	 	 	 
	 	$	197,229	 	 	 	11636	 	 	$	72,375	 
	 	8325	 	 	 
	 	$	136,024	 	 	 	11638	 	 	$	88,016	 
	 	8326	 	 	 
	 	$	143,186	 	 	 	11468	 	 	$	213,220	 
	 	9258	 	 	 
	 	$	133,008	 	 	 	11469	 	 	$	196,661	 
	 	9259	 	 	 
	 	$	148,135	 	 	 	11250	 	 	$	160,106	 
	 	8205	 	 	 
	 	$	118,875	 	 	 	12585	 	 	$	103,247	 
	 	8207	 	 	 
	 	$	127,665	 	 	 	12817	 	 	$	204,829	 
	 	8355	 	 	 
	 	$	107,373	 	 	 	12818	 	 	$	163,351	 
	 	8356	 	 	 
	 	$	121,747	 	 	 	12250	 	 	$	251,210	 
	 	8357	 	 	 
	 	$	112,370	 	 	 	10774	 	 	$	188,119	 
	 	8358	 	 	 
	 	$	92,153	 	 	 	10777	 	 	$	184,439	 
	 	8835	 	 	 
	 	$	104,711	 	 	 	10778	 	 	$	169,757	 
	 	8836	 	 	 
	 	$	107,185	 	 	 	10779	 	 	$	142,377	 
	 	8837	 	 	 
	 	$	76,348	 	 	 	10780	 	 	$	250,285	 
	 	8838	 	 	 
	 	$	97,478	 	 	 	10781	 	 	$	238,986	 
	 	8839	 	 	 
	 	$	133,156	 	 	 	10782	 	 	$	184,439	 
	 	8840	 	 	 
	 	$	103,900	 	 	 	10783	 	 	$	163,215	 
	 	8846	 	 	 
	 	$	178,589	 	 	 	10784	 	 	$	273,068	 
	 	9051	 	 	 
	 	$	129,030	 	 	 	10785	 	 	$	275,081	 






 









 





Pool 1 — All Assets





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid	 	File Number	 	Allocated Firm Bid
	 	9052	 	 	 
	 	$	180,281	 	 	 	10786	 	 	$	303,277	 
	 	9053	 	 	 
	 	$	143,377	 	 	 	10791	 	 	$	261,600	 
	 	9054	 	 	 
	 	$	146,738	 	 	 	10792	 	 	$	288,040	 
	 	9055	 	 	 
	 	$	143,504	 	 	 	10799	 	 	$	196,153	 
	 	9056	 	 	 
	 	$	143,504	 	 	 	10800	 	 	$	182,341	 
	 	9057	 	 	 
	 	$	141,181	 	 	 	10802	 	 	$	268,037	 
	 	8098	 	 	 
	 	$	110,288	 	 	 	10787	 	 	$	192,824	 
	 	8099	 	 	 
	 	$	156,168	 	 	 	10788	 	 	$	180,463	 
	 	8577	 	 	 
	 	$	195,063	 	 	 	10789	 	 	$	176,817	 
	 	8578	 	 	 
	 	$	176,574	 	 	 	10790	 	 	$	167,403	 
	 	8928	 	 	 
	 	$	127,697	 	 	 	11860	 	 	$	271,433	 
	 	8855	 	 	 
	 	$	128,831	 	 	 	11863	 	 	$	125,926	 
	 	8856	 	 	 
	 	$	159,855	 	 	 	11864	 	 	$	158,762	 
	 	9389	 	 	 
	 	$	76,939	 	 	 	11865	 	 	$	137,848	 
	 	9397	 	 	 
	 	$	158,311	 	 	 	11866	 	 	$	122,980	 
	 	8538	 	 	 
	 	$	153,052	 	 	 	11867	 	 	$	150,252	 
	 	8539	 	 	 
	 	$	163,179	 	 	 	11868	 	 	$	163,928	 
	 	9615	 	 	 
	 	$	138,787	 	 	 	11869	 	 	$	168,869	 
	 	9705	 	 	 
	 	$	93,674	 	 	 	11870	 	 	$	173,327	 
	 	9774	 	 	 
	 	$	157,594	 	 	 	11919	 	 	$	193,293	 
	 	9775	 	 	 
	 	$	148,942	 	 	 	10793	 	 	$	156,737	 
	 	9776	 	 	 
	 	$	246,504	 	 	 	10795	 	 	$	171,394	 
	 	9777	 	 	 
	 	$	136,664	 	 	 	11874	 	 	$	141,381	 
	 	9778	 	 	 
	 	$	193,893	 	 	 	11875	 	 	$	137,364	 
	 	9639	 	 	 
	 	$	156,016	 	 	 	12938	 	 	$	182,072	 
	 	9640	 	 	 
	 	$	186,166	 	 	 	12940	 	 	$	240,617	 
	 	9887	 	 	 
	 	$	161,330	 	 	 	13384	 	 	$	238,529	 
	 	9888	 	 	 
	 	$	182,121	 	 	 	13385	 	 	$	276,844	 
	 	9889	 	 	 
	 	$	242,011	 	 	 	13386	 	 	$	222,728	 
	 	9890	 	 	 
	 	$	220,215	 	 	 	13387	 	 	$	156,237	 
	 	10731	 	 	 
	 	$	124,278	 	 	 	10977	 	 	$	168,438	 
	 	9800	 	 	 
	 	$	115,917	 	 	 	10978	 	 	$	171,882	 
	 	9801	 	 	 
	 	$	107,897	 	 	 	10979	 	 	$	172,275	 
	 	10707	 	 	 
	 	$	181,180	 	 	 	11624	 	 	$	166,649	 
	 	10708	 	 	 
	 	$	187,858	 	 	 	11625	 	 	$	127,888	 
	 	9562	 	 	 
	 	$	155,106	 	 	 	11626	 	 	$	134,095	 
	 	9829	 	 	 
	 	$	209,464	 	 	 	11967	 	 	$	242,274	 
	 	9830	 	 	 
	 	$	198,270	 	 	 	11968	 	 	$	246,276	 
	 	9831	 	 	 
	 	$	200,376	 	 	 	11969	 	 	$	248,277	 
	 	10223	 	 	 
	 	$	175,008	 	 	 	11972	 	 	$	278,939	 
	 	10474	 	 	 
	 	$	143,950	 	 	 	11973	 	 	$	261,609	 
	 	10475	 	 	 
	 	$	145,843	 	 	 	11974	 	 	$	230,960	 
	 	10476	 	 	 
	 	$	154,302	 	 	 	11975	 	 	$	229,946	 
	 	11047	 	 	 
	 	$	153,173	 	 	 	11976	 	 	$	270,201	 
	 	11048	 	 	 
	 	$	148,654	 	 	 	10611	 	 	$	152,791	 
	 	9535	 	 	 
	 	$	104,053	 	 	 	10618	 	 	$	97,524	 
	 	9536	 	 	 
	 	$	77,052	 	 	 	10619	 	 	$	108,837	 
	 	9537	 	 	 
	 	$	98,792	 	 	 	10620	 	 	$	125,513	 
	 	9538	 	 	 
	 	$	139,127	 	 	 	12676	 	 	$	201,853	 
	 	9544	 	 	 
	 	$	97,343	 	 	 	12677	 	 	$	163,712	 
	 	9545	 	 	 
	 	$	83,615	 	 	 	13576	 	 	$	214,744	 
	 	9546	 	 	 
	 	$	95,203	 	 	 	13577	 	 	$	166,150	 






 









 





Pool 1 — All Assets





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid	 	File Number	 	Allocated Firm Bid
	 	9547	 	 	 
	 	$	117,614	 	 	 	13578	 	 	$	125,203	 
	 	9697	 	 	 
	 	$	95,925	 	 	 	13579	 	 	$	121,314	 
	 	9698	 	 	 
	 	$	98,863	 	 	 	13580	 	 	$	112,961	 
	 	9805	 	 	 
	 	$	89,733	 	 	 	13581	 	 	$	123,182	 
	 	9811	 	 	 
	 	$	67,684	 	 	 	10690	 	 	$	91,938	 
	 	10574	 	 	 
	 	$	104,085	 	 	 	10691	 	 	$	96,740	 
	 	10576	 	 	 
	 	$	85,320	 	 	 	10692	 	 	$	108,073	 
	 	10577	 	 	 
	 	$	86,342	 	 	 	10693	 	 	$	195,523	 
	 	10578	 	 	 
	 	$	79,795	 	 	 	11531	 	 	$	108,127	 
	 	10580	 	 	 
	 	$	103,848	 	 	 	11532	 	 	$	101,885	 
	 	10581	 	 	 
	 	$	82,514	 	 	 	11533	 	 	$	96,226	 
	 	10582	 	 	 
	 	$	77,483	 	 	 	11534	 	 	$	89,309	 
	 	10589	 	 	 
	 	$	80,495	 	 	 	11535	 	 	$	83,915	 
	 	10593	 	 	 
	 	$	84,980	 	 	 	11536	 	 	$	88,274	 
	 	10594	 	 	 
	 	$	81,593	 	 	 	11537	 	 	$	94,856	 
	 	9689	 	 	 
	 	$	174,279	 	 	 	11538	 	 	$	96,996	 
	 	10630	 	 	 
	 	$	129,663	 	 	 	11539	 	 	$	212,052	 
	 	9641	 	 	 
	 	$	257,731	 	 	 	11540	 	 	$	166,389	 
	 	9656	 	 	 
	 	$	137,361	 	 	 	11582	 	 	$	109,421	 
	 	10658	 	 	 
	 	$	88,532	 	 	 	10687	 	 	$	129,760	 
	 	10335	 	 	 
	 	$	223,326	 	 	 	10688	 	 	$	97,755	 
	 	10336	 	 	 
	 	$	185,916	 	 	 	10689	 	 	$	119,643	 
	 	10337	 	 	 
	 	$	215,585	 	 	 	10997	 	 	$	168,360	 
	 	10338	 	 	 
	 	$	178,613	 	 	 	10998	 	 	$	177,795	 
	 	10339	 	 	 
	 	$	221,706	 	 	 	10999	 	 	$	276,127	 
	 	10480	 	 	 
	 	$	221,326	 	 	 	11000	 	 	$	238,325	 
	 	10481	 	 	 
	 	$	253,946	 	 	 	11001	 	 	$	216,250	 
	 	10482	 	 	 
	 	$	257,562	 	 	 	11002	 	 	$	287,987	 
	 	10483	 	 	 
	 	$	339,902	 	 	 	11003	 	 	$	296,899	 
	 	9872	 	 	 
	 	$	236,349	 	 	 	11004	 	 	$	302,010	 
	 	9873	 	 	 
	 	$	184,065	 	 	 	12088	 	 	$	132,021	 
	 	9874	 	 	 
	 	$	174,989	 	 	 	12089	 	 	$	117,550	 
	 	9875	 	 	 
	 	$	128,729	 	 	 	12090	 	 	$	107,857	 
	 	9876	 	 	 
	 	$	232,761	 	 	 	12091	 	 	$	125,458	 
	 	9877	 	 	 
	 	$	229,292	 	 	 	12788	 	 	$	222,169	 
	 	9878	 	 	 
	 	$	156,058	 	 	 	12789	 	 	$	145,052	 
	 	9879	 	 	 
	 	$	145,424	 	 	 	12477	 	 	$	188,949	 
	 	10601	 	 	 
	 	$	127,930	 	 	 	12478	 	 	$	195,659	 
	 	10602	 	 	 
	 	$	122,419	 	 	 	12479	 	 	$	200,759	 
	 	10607	 	 	 
	 	$	160,700	 	 	 	12480	 	 	$	216,662	 
	 	10608	 	 	 
	 	$	161,927	 	 	 	12481	 	 	$	229,318	 
	 	10609	 	 	 
	 	$	172,088	 	 	 	11904	 	 	$	169,821	 
	 	10663	 	 	 
	 	$	201,243	 	 	 	11905	 	 	$	164,335	 
	 	10664	 	 	 
	 	$	146,050	 	 	 	11906	 	 	$	159,731	 
	 	10665	 	 	 
	 	$	142,035	 	 	 	11907	 	 	$	203,712	 
	 	9630	 	 	 
	 	$	111,567	 	 	 	11908	 	 	$	175,662	 
	 	10675	 	 	 
	 	$	100,617	 	 	 	11884	 	 	$	180,365	 
	 	10676	 	 	 
	 	$	107,367	 	 	 	11885	 	 	$	182,227	 
	 	10677	 	 	 
	 	$	81,870	 	 	 	11886	 	 	$	193,666	 
	 	10678	 	 	 
	 	$	102,777	 	 	 	11887	 	 	$	184,515	 
	 	10679	 	 	 
	 	$	98,080	 	 	 	11888	 	 	$	194,377	 
	 	10680	 	 	 
	 	$	105,817	 	 	 	11889	 	 	$	208,091	 






 









 





Pool 1 — All Assets





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid	 	File Number	 	Allocated Firm Bid
	 	10681	 	 	 
	 	$	110,630	 	 	 	10833	 	 	$	451,045	 
	 	10682	 	 	 
	 	$	123,179	 	 	 	10834	 	 	$	510,329	 
	 	9786	 	 	 
	 	$	141,204	 	 	 	10835	 	 	$	413,089	 
	 	9787	 	 	 
	 	$	126,393	 	 	 	9947	 	 	$	327,080	 
	 	9788	 	 	 
	 	$	121,854	 	 	 	12289	 	 	$	185,213	 
	 	9789	 	 	 
	 	$	116,624	 	 	 	12290	 	 	$	175,989	 
	 	9790	 	 	 
	 	$	123,770	 	 	 	12291	 	 	$	169,757	 
	 	9885	 	 	 
	 	$	118,031	 	 	 	12292	 	 	$	147,097	 
	 	9886	 	 	 
	 	$	108,499	 	 	 	12773	 	 	$	229,201	 
	 	9584	 	 	 
	 	$	188,769	 	 	 	12774	 	 	$	221,827	 
	 	9585	 	 	 
	 	$	201,893	 	 	 	12775	 	 	$	184,282	 
	 	9586	 	 	 
	 	$	221,977	 	 	 	12776	 	 	$	409,103	 
	 	9587	 	 	 
	 	$	251,386	 	 	 	12777	 	 	$	402,835	 
	 	9941	 	 	 
	 	$	398,328	 	 	 	12778	 	 	$	428,923	 
	 	9942	 	 	 
	 	$	414,118	 	 	 	10936	 	 	$	209,039	 
	 	9943	 	 	 
	 	$	332,291	 	 	 	10937	 	 	$	195,737	 
	 	9944	 	 	 
	 	$	412,177	 	 	 	10938	 	 	$	214,213	 
	 	9945	 	 	 
	 	$	381,128	 	 	 	10939	 	 	$	200,488	 
	 	9946	 	 	 
	 	$	415,983	 	 	 	10940	 	 	$	209,842	 
	 	9815	 	 	 
	 	$	120,256	 	 	 	10941	 	 	$	211,952	 
	 	9816	 	 	 
	 	$	129,843	 	 	 	10943	 	 	$	160,664	 
	 	9817	 	 	 
	 	$	169,699	 	 	 	10944	 	 	$	167,778	 
	 	9818	 	 	 
	 	$	145,217	 	 	 	10945	 	 	$	169,765	 
	 	11012	 	 	 
	 	$	132,903	 	 	 	10946	 	 	$	174,791	 
	 	11013	 	 	 
	 	$	118,912	 	 	 	10947	 	 	$	189,549	 
	 	11014	 	 	 
	 	$	112,567	 	 	 	10950	 	 	$	168,155	 
	 	9518	 	 	 
	 	$	218,827	 	 	 	10951	 	 	$	183,240	 
	 	9519	 	 	 
	 	$	213,275	 	 	 	10952	 	 	$	210,019	 
	 	9520	 	 	 
	 	$	218,827	 	 	 	10953	 	 	$	194,734	 
	 	9521	 	 	 
	 	$	195,891	 	 	 	10954	 	 	$	170,646	 
	 	10754	 	 	 
	 	$	131,687	 	 	 	10955	 	 	$	109,892	 
	 	10755	 	 	 
	 	$	134,775	 	 	 	10956	 	 	$	108,580	 
	 	10277	 	 	 
	 	$	146,627	 	 	 	10957	 	 	$	119,490	 
	 	10278	 	 	 
	 	$	178,865	 	 	 	10958	 	 	$	137,617	 
	 	10279	 	 	 
	 	$	187,203	 	 	 	10959	 	 	$	132,512	 
	 	10280	 	 	 
	 	$	192,611	 	 	 	10960	 	 	$	149,341	 
	 	10281	 	 	 
	 	$	209,524	 	 	 	11495	 	 	$	107,660	 
	 	10632	 	 	 
	 	$	122,347	 	 	 	11496	 	 	$	98,357	 
	 	10633	 	 	 
	 	$	163,149	 	 	 	11500	 	 	$	316,935	 
	 	10634	 	 	 
	 	$	200,478	 	 	 	11501	 	 	$	264,554	 
	 	12222	 	 	 
	 	$	103,623	 	 	 	11497	 	 	$	94,583	 
	 	12223	 	 	 
	 	$	132,766	 	 	 	11498	 	 	$	111,357	 
	 	12221	 	 	 
	 	$	74,668	 	 	 	11499	 	 	$	134,731	 
	 	12228	 	 	 
	 	$	75,184	 	 	 	12049	 	 	$	103,415	 
	 	12229	 	 	 
	 	$	102,368	 	 	 	12050	 	 	$	82,072	 
	 	12230	 	 	 
	 	$	93,457	 	 	 	11842	 	 	$	118,752	 
	 	12231	 	 	 
	 	$	120,573	 	 	 	11844	 	 	$	234,521	 
	 	12233	 	 	 
	 	$	153,706	 	 	 	11845	 	 	$	179,283	 
	 	12234	 	 	 
	 	$	128,223	 	 	 	11848	 	 	$	135,230	 
	 	12224	 	 	 
	 	$	86,277	 	 	 	11846	 	 	$	251,693	 
	 	12225	 	 	 
	 	$	75,216	 	 	 	11847	 	 	$	205,572	 
	 	12226	 	 	 
	 	$	89,185	 	 	 	13537	 	 	$	73,190	 






 









 





Pool 1 — All Assets





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid	 	File Number	 	Allocated Firm Bid
	 	12227	 	 	 
	 	$	108,284	 	 	 	13538	 	 	$	73,177	 
	 	12232	 	 	 
	 	$	69,515	 	 	 	13539	 	 	$	79,510	 
	 	11810	 	 	 
	 	$	169,467	 	 	 	13540	 	 	$	78,454	 
	 	12833	 	 	 
	 	$	129,716	 	 	 	13541	 	 	$	182,364	 
	 	12834	 	 	 
	 	$	152,448	 	 	 	13542	 	 	$	168,250	 
	 	12835	 	 	 
	 	$	172,249	 	 	 	12918	 	 	$	272,941	 
	 	12836	 	 	 
	 	$	151,913	 	 	 	12919	 	 	$	260,688	 
	 	10736	 	 	 
	 	$	159,761	 	 	 	12920	 	 	$	318,266	 
	 	10737	 	 	 
	 	$	144,174	 	 	 	12921	 	 	$	312,525	 
	 	12759	 	 	 
	 	$	168,153	 	 	 	12922	 	 	$	319,293	 
	 	12760	 	 	 
	 	$	150,226	 	 	 	12923	 	 	$	682,586	 
	 	12761	 	 	 
	 	$	171,195	 	 	 	12924	 	 	$	358,173	 
	 	10732	 	 	 
	 	$	96,410	 	 	 	12925	 	 	$	391,089	 
	 	10733	 	 	 
	 	$	85,707	 	 	 	11672	 	 	$	258,977	 
	 	10734	 	 	 
	 	$	83,074	 	 	 	11673	 	 	$	233,718	 
	 	12763	 	 	 
	 	$	96,952	 	 	 	11674	 	 	$	228,945	 
	 	12764	 	 	 
	 	$	98,007	 	 	 	11675	 	 	$	196,999	 
	 	12349	 	 	 
	 	$	112,301	 	 	 	11676	 	 	$	218,122	 
	 	12350	 	 	 
	 	$	119,112	 	 	 	11677	 	 	$	193,343	 
	 	10907	 	 	 
	 	$	132,443	 	 	 	11668	 	 	$	176,749	 
	 	10905	 	 	 
	 	$	137,732	 	 	 	11669	 	 	$	186,524	 
	 	10906	 	 	 
	 	$	153,766	 	 	 	11670	 	 	$	184,641	 
	 	12624	 	 	 
	 	$	174,623	 	 	 	11671	 	 	$	165,891	 
	 	12625	 	 	 
	 	$	198,397	 	 	 	11241	 	 	$	86,771	 
	 	10878	 	 	 
	 	$	134,890	 	 	 	11242	 	 	$	87,379	 
	 	10879	 	 	 
	 	$	117,005	 	 	 	10744	 	 	$	147,744	 
	 	10880	 	 	 
	 	$	143,181	 	 	 	10748	 	 	$	125,198	 
	 	10881	 	 	 
	 	$	150,666	 	 	 	10749	 	 	$	137,391	 
	 	10882	 	 	 
	 	$	195,156	 	 	 	10745	 	 	$	115,458	 
	 	10883	 	 	 
	 	$	195,809	 	 	 	10746	 	 	$	108,337	 
	 	12383	 	 	 
	 	$	147,107	 	 	 	10747	 	 	$	102,824	 
	 	12384	 	 	 
	 	$	120,927	 	 	 	12271	 	 	$	123,113	 
	 	12631	 	 	 
	 	$	104,655	 	 	 	12272	 	 	$	151,315	 
	 	 	 	 	 
	 	 	 	 	 	 	12273	 	 	$	148,371	 






 









 





Pool 2 — All Assets






	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Firm Bid
	 	8711	 	 	 
	 	$	260,558	 
	 	10023	 	 	 
	 	$	122,261	 
	 	10034	 	 	 
	 	$	244,590	 
	 	10039	 	 	 
	 	$	92,591	 






 









 





EXHIBIT B




Excluded Assets




 









 








Pool 1 — Excluded Assets




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	File Number	 	 	 	Allocated Bid Price	 	File Number	 	Allocated Bid Price
	 	6913	 	 	 
	 	$	131,221	 	 	 	10337	 	 	$	215,585	 
	 	7428	 	 	 
	 	$	185,406	 	 	 	10338	 	 	$	178,613	 
	 	7431	 	 	 
	 	$	94,677	 	 	 	10339	 	 	$	221,706	 
	 	7521	 	 	 
	 	$	121,025	 	 	 	10483	 	 	$	339,902	 
	 	7042	 	 	 
	 	$	143,835	 	 	 	9584	 	 	$	188,769	 
	 	7043	 	 	 
	 	$	141,355	 	 	 	9941	 	 	$	398,328	 
	 	7441	 	 	 
	 	$	109,941	 	 	 	9942	 	 	$	414,118	 
	 	7442	 	 	 
	 	$	128,128	 	 	 	9943	 	 	$	332,291	 
	 	7853	 	 	 
	 	$	157,062	 	 	 	10732	 	 	$	96,410	 
	 	7854	 	 	 
	 	$	162,849	 	 	 	10733	 	 	$	85,707	 
	 	7855	 	 	 
	 	$	185,996	 	 	 	10734	 	 	$	83,074	 
	 	7856	 	 	 
	 	$	177,729	 	 	 	12763	 	 	$	96,952	 
	 	7857	 	 	 
	 	$	197,570	 	 	 	12764	 	 	$	98,007	 
	 	7568	 	 	 
	 	$	99,595	 	 	 	10880	 	 	$	143,181	 
	 	7569	 	 	 
	 	$	117,143	 	 	 	12631	 	 	$	104,655	 
	 	7571	 	 	 
	 	$	149,487	 	 	 	12817	 	 	$	204,829	 
	 	7465	 	 	 
	 	$	113,624	 	 	 	12250	 	 	$	251,210	 
	 	7466	 	 	 
	 	$	89,861	 	 	 	10774	 	 	$	188,119	 
	 	7467	 	 	 
	 	$	102,615	 	 	 	10791	 	 	$	261,600	 
	 	8570	 	 	 
	 	$	103,469	 	 	 	10792	 	 	$	288,040	 
	 	8571	 	 	 
	 	$	138,399	 	 	 	10802	 	 	$	268,037	 
	 	8742	 	 	 
	 	$	108,087	 	 	 	11860	 	 	$	271,433	 
	 	8743	 	 	 
	 	$	133,628	 	 	 	11919	 	 	$	193,293	 
	 	8117	 	 	 
	 	$	122,625	 	 	 	10793	 	 	$	156,737	 
	 	8118	 	 	 
	 	$	127,755	 	 	 	10795	 	 	$	171,394	 
	 	8331	 	 	 
	 	$	197,229	 	 	 	12940	 	 	$	240,617	 
	 	8325	 	 	 
	 	$	136,024	 	 	 	13384	 	 	$	238,529	 
	 	8326	 	 	 
	 	$	143,186	 	 	 	13385	 	 	$	276,844	 
	 	9258	 	 	 
	 	$	133,008	 	 	 	13386	 	 	$	222,728	 
	 	9259	 	 	 
	 	$	148,135	 	 	 	10978	 	 	$	171,882	 
	 	8836	 	 	 
	 	$	107,185	 	 	 	10979	 	 	$	172,275	 
	 	8838	 	 	 
	 	$	97,478	 	 	 	11624	 	 	$	166,649	 
	 	8839	 	 	 
	 	$	133,156	 	 	 	11625	 	 	$	127,888	 
	 	8840	 	 	 
	 	$	103,900	 	 	 	11626	 	 	$	134,095	 
	 	8846	 	 	 
	 	$	178,589	 	 	 	10693	 	 	$	195,523	 
	 	9052	 	 	 
	 	$	180,281	 	 	 	11539	 	 	$	212,052	 
	 	9053	 	 	 
	 	$	143,377	 	 	 	11540	 	 	$	166,389	 
	 	9054	 	 	 
	 	$	146,738	 	 	 	10835	 	 	$	413,089	 
	 	9055	 	 	 
	 	$	143,504	 	 	 	12290	 	 	$	175,989	 
	 	9057	 	 	 
	 	$	141,181	 	 	 	12291	 	 	$	169,757	 
	 	8099	 	 	 
	 	$	156,168	 	 	 	11495	 	 	$	107,660	 
	 	8577	 	 	 
	 	$	195,063	 	 	 	11496	 	 	$	98,357	 
	 	8855	 	 	 
	 	$	128,831	 	 	 	12049	 	 	$	103,415	 
	 	8856	 	 	 
	 	$	159,855	 	 	 	12050	 	 	$	82,072	 
	 	9389	 	 	 
	 	$	76,939	 	 	 	11842	 	 	$	118,752	 
	 	9397	 	 	 
	 	$	158,311	 	 	 	11844	 	 	$	234,521	 
	 	9705	 	 	 
	 	$	93,674	 	 	 	11848	 	 	$	135,230	 
	 	9639	 	 	 
	 	$	156,016	 	 	 	11846	 	 	$	251,693	 
	 	9640	 	 	 
	 	$	186,166	 	 	 	11847	 	 	$	205,572	 
	 	9641	 	 	 
	 	$	257,731	 	 	 	13541	 	 	$	182,364	 
	 	9656	 	 	 
	 	$	137,361	 	 	 	13542	 	 	$	168,250	 
	 	10335	 	 	 
	 	$	223,326	 	 	 	12923	 	 	$	682,586	 
	 	10336	 	 	 
	 	$	185,916	 	 	 	12925	 	 	$	391,089	 






 









 






Pool 2 — Excluded Assets




	 	 	 	 	 
	File Number	 	Allocated Bid Price
	8711
	 	$	260,558	 






 









 






EXHIBIT C



See the column entitled Allocated Bid Price in Exhibit B to the Purchase Agreement.




 









 








EXHIBIT D




Calculation of Proration Amount




     1. The following adjustments and prorations shall be apportioned between Seller and Buyer at
Closing as of 11:59 p.m. (New York City Time) on the Cut-Off Date (the “Cut-Off Time”)
(with Seller being responsible for reimbursing Buyer for all of the following costs and expenses
incurred by Buyer (or Subsidiary after the Closing) to the extent such costs and/or expenses relate
to the period of ownership or maintenance of the Subject Assets prior to the Cut-Off Time and with
Buyer being responsible for reimbursing Seller for all of the following costs and expenses incurred
by Seller to the extent such costs and/or expenses relate to the period of ownership or maintenance
of the Subject Assets after the Cut-Off Time), to the extent that, on or prior to Closing, either
Party has paid, received or is due any of the following amounts directly arising from the
ownership, operation or maintenance of the Subject Assets:



          (a) all real estate taxes or personal property taxes, water charges, sewer rents and vault
charges, if any, on the basis of the fiscal years, respectively, for which same have been assessed;




          (b) utilities, including, without limitation, telephone, steam, electricity and gas, on the
basis of the most recently issued bills therefor, subject to adjustment after the Closing when the
next bills are available, or if current meter readings are available, on the basis of such
readings;




          (c) any prepaid items, including, without limitation, insurance for each Subject Assets, fees
for licenses which are transferred to Buyer at the Closing and annual permit and inspection fees;
and




          (d) all casualty repairs, maintenance costs and repair costs and other property-level
out-of-pocket costs and expenses incurred and paid to third parties in the ordinary course
consistent with past practice for the purpose of maintaining the Subject Assets in proper
condition.




     2. Seller and Buyer shall cooperate to make the adjustments and prorations required under this
Exhibit D in accordance with the provisions of this Agreement and otherwise on a cash basis
or accrual basis, as appropriate, and in accordance with sound accounting practices and the local
customs regarding title closings as recommended by the Real Estate Board of New York.



     3. Notwithstanding anything to the contrary in this Exhibit D, to the extent that any
amounts referenced in Section 1 of this Exhibit D are included in the calculation
of the Additional Proceeds Amount, such amounts shall be disregarded for purposes of calculating
the Proration Amount.



 









 





EXHIBIT E




      




SERVICING AGREEMENT




between




RESIDENTIAL CAPITAL, LLC




and




MHPOOL HOLDINGS LLC




dated as of




September 30, 2008




      




 









 





SERVICING AGREEMENT




     THIS SERVICING AGREEMENT (this “Agreement”) is made and entered into as of September
30, 2008, among Residential Capital, LLC, a Delaware limited liability company (“ResCap”),
on behalf of itself and its controlled Affiliates (as defined in the Purchase Agreement (as defined
below)) and MHPool Holdings LLC, a Delaware limited liability company (“Buyer”), on behalf
of itself and Subsidiary.



RECITALS




     A. ResCap, DOA Holding Properties, LLC,, a Delaware limited liability company and indirect
wholly-owned subsidiary of ResCap, DOA Properties IIIB (KB Models), LLC, a Delaware limited
liability company and a subsidiary of Holdings (“Subsidiary”) and Buyer entered into that
certain Purchase Agreement, dated as of September 30, 2008 (the “Purchase Agreement”),
pursuant to which, on the Closing Date, Buyer purchased from ResCap, and ResCap sold to Buyer, the
Interests.



     B. The parties desire to enter into this Agreement on the terms and subject to the conditions
set forth herein.



     C. Capitalized terms used but not defined herein shall have the respective meanings set forth
in the Purchase Agreement.



     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and
agreements contained in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, upon the terms and subject to the conditions set
forth in this Agreement, the parties hereto, intending to be legally bound, hereby agree as
follows:



          ARTICLE IX Agreement to Provide Services.




               Section 9.1 Agreement. ResCap hereby agrees to provide, or cause its controlled
Affiliates to provide, or use its commercially reasonable efforts to cause other third parties to
provide, to Subsidiary and Buyer, the Services (as defined below) with the same degree of care,
skill, and diligence and in substantially the same manner as such services have been obtained by
Subsidiary or any of the Prior Owners with respect to the Subject Assets during the six-month
period ended September 30, 2008 (from ResCap or its controlled Affiliates or by virtue of third
party services made available by ResCap or its controlled Affiliates) (the “Required Servicing
Standard”); provided, however, that ResCap may only use third parties to
provide Services so long as such third parties (or similar third parties) provided such Services
(directly or indirectly) to Subsidiary as of the Closing Date. The term “Prior Owners”
means, collectively, DOA Properties III (Models), LLC and GMAC Model Home Finance, LLC.



               Section 9.2 Services. As used in this Agreement, the term “Services” means
all services obtained by Subsidiary or a Prior Owner with respect to the Subject Assets during the
six-month period ended September 30, 2008 (from ResCap or its controlled Affiliates or by virtue of
third party services made available by ResCap or its



 









 







controlled Affiliates) that are necessary or advisable, in the reasonable judgment of Buyer,
to own, operate and maintain the Subject Assets as owned, operated and maintained by Subsidiary or
a Prior Owner during the six-month period ended September 30, 2008, including, without limitation,
the services described in the schedules attached hereto (the “Schedules”).



               Section 9.3 Change in Services. Any material change in the manner in which the
Services are provided (a “Material Change in Service”), including any change in the
employees or third parties providing such Services, shall require Buyer’s prior written consent,
which consent shall not be unreasonably withheld, delayed or conditioned. To the fullest extent
practicable, Buyer shall receive a written request for consent from ResCap at least five business
days prior to any proposed Material Change in Service, together with reasonable documentation
describing the material terms of such proposed Material Change in Service. Notwithstanding the
foregoing, Buyer acknowledges that certain Material Changes in Service may be outside of ResCap’s
control (“Involuntary Changes”), including the resignation of any employee or the
termination by any third party service provider of its provision of services to ResCap, and that
any Involuntary Change shall not require Buyer’s prior written consent; provided, that (i) ResCap
shall confer with Buyer in determining the appropriate course of conduct in addressing any
Involuntary Changes and (ii) ResCap shall obtain Buyer’s written consent (not to be unreasonably
withheld, delayed or conditioned) prior to taking any action in response to such Involuntary Change
that, if taken, would constitute a Material Change in Service.



          ARTICLE X Payment of Services.




               Section 10.1 Service Costs. From Closing until the thirty (30) day anniversary
thereof, ResCap shall bear all costs of providing the Services. Thereafter, in consideration for
each Service, Buyer shall reimburse ResCap as set forth on Schedule I hereto.



               Section 10.2 Invoicing of Service Costs. During the applicable term of each Service,
ResCap shall invoice Buyer for the Applicable Service Cost promptly after the end of each calendar
month during such term. Buyer shall include with each invoice a reasonably detailed description of
the Services performed, the costs charged, and such other details as may be necessary to support
the invoice. All undisputed invoices shall be paid by Buyer to ResCap by wire transfer of
immediately available funds not later than sixty (60) calendar days after receipt by Buyer of
ResCap’s invoice, in accordance with the wiring instructions provided by ResCap to Buyer.



               Section 10.3 Service Cost Disputes. In the event that Buyer has a good faith dispute
with regard to any costs invoiced by ResCap hereunder, Buyer shall provide ResCap with written
notice of such dispute, together with a reasonably detailed explanation of such dispute, at or
prior to the time payment would have otherwise been due, and Buyer may withhold payment of any
disputed amounts pending resolution of the dispute. Buyer’s failure to pay amounts disputed in
accordance with the preceding



2









 







sentence shall not be grounds for a claim of breach or suspension of the provision of Services
by ResCap, its controlled Affiliates or any third party service provider.



               Section 10.4 Records and Inspection. During the term of this Agreement, ResCap shall
maintain complete and accurate records of the Services provided, costs invoiced to Buyer and
payments made thereunder. All such records shall be available for inspection by Buyer or its
representative.



     ARTICLE XI Relationship between the Parties.



               Section 11.1 Independent Contractors. ResCap, its controlled Affiliates and any third
party service providers in the performance of the Services, shall be acting as independent
contractors to Subsidiary and Buyer and its Affiliates, and not as partners, joint venturers or
agents of Buyer. Neither ResCap nor Buyer intends to create by this Agreement an employer-employee
relationship. Each of ResCap, its controlled Affiliates and any third party service providers, on
the one hand, and Subsidiary and Buyer, on the other hand, shall retain control over their
respective personnel, and their respective employees shall not be considered employees of the
other. Except as expressly provided pursuant to any signing authority granted pursuant to any
power of attorney or written consent of the board of directors of Buyer, neither ResCap, any of its
controlled Affiliates or any third party service providers, on the one hand, nor Subsidiary or
Buyer, on the other hand, shall have any right, power or authority to create any obligation,
express or implied, on behalf of the other pursuant to this Agreement.



               Section 11.2 Cooperation. ResCap shall, and shall cause its controlled Affiliates to,
and shall use its commercially reasonable efforts to cause its, employees, agents, representatives,
third party service providers and subcontractors to, cooperate fully with Buyer, its Affiliates and
their respective employees, agents and representatives to facilitate, in all respects, the
provision of Services to Buyer and its Affiliates. Buyer shall and shall use its commercially
reasonable efforts to cause its respective employees, agents, representatives and subcontractors
to, cooperate fully with ResCap, its controlled Affiliates and their respective employees, agents
and representatives to facilitate, in all respects, the provision of Services to Buyer.



               Section 11.3 Steering Committee. As promptly as practicable, ResCap and Buyer shall
form a steering committee (the “Steering Committee”), which shall consist of two
individuals, one of whom shall be nominated by ResCap and one of whom shall be nominated by Buyer.
Subject to Section 1.3, to the fullest extent practicable, ResCap shall keep the Steering Committee
reasonably informed of all proposed changes to the provision of Services and consult with the
Steering Committee prior to taking any such action that would reasonably be expected to adversely
affect the provision of Services hereunder.



3









 





          ARTICLE XII Service Standard; Compliance with Laws.




               Section 12.1 Service Standard. ResCap shall, or shall cause its controlled Affiliates
to, or shall use its commercially reasonable efforts to cause its third party service providers to,
provide the Services.



               Section 12.2 Compliance With Laws. Neither ResCap nor any of its controlled Affiliates
shall violate any applicable Laws in connection with its performance of the Services.



               Section 12.3 Third Party Service Provider. In each instance hereunder where ResCap
shall use a third party service provider to provide the Services, ResCap shall use its commercially
reasonably efforts to cause such third party service providers to provide the Services in
accordance with the Required Servicing Standard and other applicable terms hereof. Notwithstanding
the foregoing, any failure of any such third party service provider to perform any Services in
accordance with the Required Servicing Standard or other applicable terms hereof shall constitute a
breach by ResCap of the Requisite Servicing Standard or such other term, as the case may be, and
Subsidiary and Buyer shall be entitled to the remedies provided in this Agreement with respect to
such ResCap breach.



          ARTICLE XIII Service Disruptions. If ResCap, its controlled Affiliates’ or any
third party service provider’s performance of any Services is interrupted in whole or in part for
any reason for more than three (3) full Business Days, then Subsidiary and Buyer has the
right (in addition to any other remedies available under this Agreement or by Law), at ResCap’s
sole cost and expense, to make commercially reasonable arrangements to procure such interrupted
Services from an alternative source for the period and to the extent reasonably necessitated by
such interruption, or, if longer, for the duration of the contract entered into with such
alternative source (provided, that Buyer shall use commercially reasonable efforts
to limit the duration of the contract with such alternate source to the shortest period of time
that is reasonably practical).




          ARTICLE XIV Indemnification.




               Section 14.1 Buyer Indemnity. Buyer shall indemnify, defend and hold harmless ResCap,
its controlled Affiliates and its and their respective officers, directors, managers, partners,
members, employees, successors and assigns (collectively, the “ResCap Indemnified Parties”)
from and against all Losses arising out of any third party claims in connection with or arising
from the performance of the obligations of ResCap and its controlled Affiliates under this
Agreement, except to the extent such Losses arise out of (i) the gross negligence or willful
misconduct of ResCap or any of its controlled Affiliates in the performance of its obligations
under this Agreement, or (ii) any claim that any of the Services violates or infringes on any
intellectual property rights of any third party.



               Section 14.2 ResCap Indemnity. ResCap shall indemnify, defend and hold harmless Buyer,
its Affiliates (including, for the avoidance of doubt, Subsidiary) and



4









 







its and their respective officers, directors, managers, partners, members, employees,
successors and assigns (collectively, the “ Buyer Indemnified Parties”) from and against
all Losses arising out of (i) the gross negligence or willful misconduct of ResCap or any of its
controlled Affiliates in the performance of its obligations under this Agreement, or (ii) any claim
that any of the Services violates or infringes on any intellectual property rights of any third
party.



               Section 14.3 Procedure. The indemnified party shall promptly notify the indemnifying
party of any action for which an indemnified party intends to claim indemnification hereunder
(provided, however, that the failure to so notify the indemnifying party will not
relieve the indemnifying party from its indemnification obligations, except to the extent (and only
to the extent) that the indemnifying party is prejudiced by such failure). The indemnified party
agrees that that the indemnifying party will have the right to assume and control the defense or
settlement of such action, with counsel chosen by the indemnifying party and reasonably acceptable
to the indemnified party; provided, however, that (i) if the indemnifying party
assumes the defense of any action, it shall have conclusively established its obligation to
indemnify the indemnified party with respect to such action and (ii) the indemnifying party shall
not enter into any settlement or compromise of any such claim in the event such settlement or
compromise imposes any liability or obligation on the indemnified party without the indemnified
party’s prior written consent (which consent shall not be unreasonably withheld, conditioned or
delayed). The indemnified party agrees to cooperate in all reasonable respects with the
indemnifying party and its legal representatives in the investigation and defense of any action
covered by indemnification hereunder.



               Section 14.4 Limitation of Liability. NEITHER RESCAP NOR BUYER SHALL BE REQUIRED TO
INDEMNIFY THE OTHER OR THE OTHER’S CONTROLLED AFFILIATES FOR ANY EXEMPLARY, PUNITIVE, TREBLE,
SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES, LOST PROFITS OR INTERNAL COSTS;
PROVIDED HOWEVER, THAT, IF ANY INDEMNIFIED PARTY IS HELD LIABLE PURSUANT TO A
THIRD-PARTY CLAIM FOR ANY OF SUCH DAMAGES AND THE INDEMNIFYING PARTY IS OBLIGATED TO INDEMNIFY SUCH
INDEMNIFIED PARTY UNDER SECTION 6.1 OR SECTION 6.2 OF THIS AGREEMENT, THEN THE
INDEMNIFYING PARTY SHALL BE LIABLE FOR AND OBLIGATED TO REIMBURSE THE INDEMNIFIED PARTY FOR SUCH
DAMAGES.



          ARTICLE XV Term and Termination.




               Section 15.1 Term. This Agreement shall be effective from and after the Closing Date
and continue until the earlier of (i) the date on which all Services have been terminated in
accordance with the terms hereof and (ii) the dissolution of Buyer. This Agreement shall terminate
automatically (without further action by any of the parties hereto) at the end of the term set
forth in the preceding sentence. ResCap shall provide, or cause to be provided to, Buyer and
Subsidiary each Service until the earlier to occur of (i) the date on which Buyer notifies ResCap
in writing to terminate such Service pursuant to Section 7.2 hereof and (ii) the dissolution of
Buyer.



5









 





               Section 15.2 Termination of Services. Buyer may terminate its right to receive any
particular Service for any or no reason by providing ResCap not less than thirty (30) days’ prior
written notice setting forth the termination date for such Service.



               Section 15.3 Obligations on Termination. Upon any termination of this Agreement or any
Service, (i) ResCap shall cooperate, and cause its controlled Affiliates to cooperate, and shall
use its commercially reasonably efforts to cause its third party service providers to cooperate,
with all reasonable requests by Buyer in connection with the transition of such Services, including
the transfer and retention of records and data pertaining to the Services or the Subsidiary to
Buyer or its designees (in a mutually agreed industry standard electronic format), (ii) ResCap
shall return to Buyer or, to the extent permitted by applicable Law, destroy, at Buyer’s option,
all Confidential Information (including data) relating to the Subsidiary or the Services that is in
ResCap’s, any of its controlled Affiliates’ or any third party service provider’s possession or
control; (iii) no party hereto shall be relieved of any liability for any breach or nonfulfillment
of any of its obligations hereunder with respect to such Service prior to termination of such
Service; and (iv) Section 2 (as to any unpaid amounts), Sections 6, 8 and 9 and this Section 7
shall survive any termination of this Agreement or of any Service.



          ARTICLE XVI Confidentiality.




               Section 16.1 Confidential Information. As used in this Agreement, “Confidential
Information” means any and all non-public information, in any form, furnished or made available
directly or indirectly by one party hereto or any of its Affiliates (the “Disclosing
Party”) to the other hereto or any of its Affiliates or third party service providers (the
“Receiving Party”) pursuant to this Agreement, and in the case of Buyer as the Disclosing
Party the term Confidential Information shall also include any non-public information concerning
Buyer, any of its Affiliates (including, without limitation, Subsidiary) or any of the Subject
Assets.



               Section 16.2 Obligations of Confidentiality. The Receiving Party shall protect the
Confidential Information of the Disclosing Party by using the same degree of care to prevent the
unauthorized use, dissemination, or publication of such Confidential Information as the Receiving
Party uses to protect its own Confidential Information of a similar nature, but in no event shall
the Receiving Party use less than a reasonable standard of care in its treatment of such
Confidential Information. The Receiving Party shall use the Confidential Information solely for
the purposes contemplated by this Agreement, and shall limit its disclosure of such Confidential
Information to those employees, other personnel and third party service providers who have a need
to know such Confidential Information for such purposes and who are informed of the confidential
nature of such Confidential Information and directed to use, hold and protect such Confidential
Information in accordance with this Agreement. The Receiving Party shall be responsible for any
breach of this Section 8.2 by any Person to whom it discloses or provides access to
Confidential Information.



               Section 16.3 Exclusions.



6









 






          (i) This Agreement imposes no obligation upon the Receiving Party with respect to
Confidential Information which (i) is or becomes a matter of public knowledge without
violation of this Agreement by the Receiving Party or any other Person to whom the Receiving
Party disclosed or provided access to the Confidential Information of the other party or of
its Affiliates; (ii) is received on a non-confidential basis by the Receiving Party from a
third party that, to the knowledge of the Receiving Party, is rightfully in possession of,
and with a right to make an unrestricted disclosure of, such information; or (iii) is
independently developed by the Receiving Party without the use of Confidential Information
disclosed by the Disclosing Party.




          (ii) If the Receiving Party is required (by applicable law, rule or regulation or a
subpoena, court order, similar judicial process, regulatory agency, Governmental Entity,
self-regulatory organization or stock exchange rule) to disclose any Confidential
Information, the Receiving Party will, to the extent consistent with legal and regulatory
requirements: (i) promptly notify the Disclosing Party of the existence, terms and
circumstances surrounding such requirement, (ii) reasonably consult with the Disclosing
Party on the advisability of taking legally available steps to resist or narrow such
requirement and (iii) if disclosure of such information is required, to furnish only that
portion of the Confidential Information which the Receiving Party is required to disclose
and to reasonably cooperate with the Disclosing Party, at the Disclosing Party’s sole cost
and expense, to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information.



               Section 16.4 Ownership of Confidential Information. Neither the Receiving Party nor
any of its controlled Affiliates or third party service providers shall obtain any rights with
respect to the Confidential Information of the Disclosing Party, and in all cases the Disclosing
Party shall retain all right, title and interest in its Confidential Information.



               Section 16.5 Return of Confidential Information. Upon termination of this Agreement,
or at any time upon request by the Disclosing Party, the Receiving Party shall return to the
Disclosing Party or, to the extent permitted by applicable Law, destroy, at the Disclosing Party’s
option, all Confidential Information of the Disclosing Party that is in the possession or under the
control of the Receiving Party or any of its controlled Affiliates or third party service providers
(including all copies thereof).



          ARTICLE XVII General Provisions.




               Section 17.1 Miscellaneous Provisions. Sections 8.1, 8.2, 8.5, 8.8, 8.9, 8.10, 8.11
and 8.12 of the Purchase Agreement shall apply to this Agreement mutatis mutandis as if set forth
herein.



               Section 17.2 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective



7









 







successors, legal representatives and assigns. No party hereto may assign any of its rights
or delegate any of its obligations under this Agreement, by operation of Law or otherwise, without
the prior written consent of the other party hereto; provided, however, that Buyer
may assign or delegate, in whole or in part, its rights and obligations under this Agreement to any
one or more of its Affiliates so long as Buyer remains responsible for the performance of its
obligations hereunder. Nothing in this Agreement, express or implied, is intended to confer upon
any Person other than ResCap, Buyer and each of its controlled Affiliates, successors, legal
representatives and permitted assigns, any rights or remedies under or by reason of this Agreement;
provided, that, the Buyer Indemnified Parties (solely with respect to their
indemnification rights pursuant to this Agreement) and the ResCap Indemnified Parties (solely with
respect to their indemnification rights pursuant to this Agreement) shall be third party
beneficiaries of such Sections of this Agreement, entitled to enforce those specified provisions
hereof.



               Section 17.3 Interpretation. The words “hereof,” “herein” and “hereunder” and words
of like import used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. Terms defined in the singular in this Agreement shall also
include the plural and vice versa. The captions and headings herein are included for convenience
of reference only and shall be ignored in the construction or interpretation hereof. References to
Articles, Sections, and Schedules are to Articles, Sections, and Schedules of this Agreement unless
otherwise specified. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not
they are in fact followed by those words or words of like import. The phrases “the date of this
Agreement,” “the date hereof” and phrases of similar import, unless the context otherwise requires,
shall be deemed to refer to the date set forth in the Preamble to this Agreement. The parties
hereto have participated jointly in the negotiation and drafting of this Agreement. If any
ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.



               Section 17.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.



               Section 17.5 Disputes. Any controversy or dispute arising out of this Agreement
(each, a “Dispute”), including, without limitation, any dispute under Section 2.3
hereof, shall be submitted to the Steering Committee. If the Steering Committee fails to reach
unanimous agreement on the resolution of such Dispute within twenty (20) Business Days, then either
ResCap or Buyer may seek remedies under Delaware law, and in connection therewith, such Dispute
shall be brought in the Chancery Court of the State of Delaware, any other state court of the State
of Delaware or the United States District Court for the District of Delaware (the “Chosen
Courts”), and solely in connection with claims arising under this Agreement or the transactions
that are the subject of this Agreement, each Party: (i) irrevocably submits to the exclusive



8









 







jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such
action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any Party hereto and (iv) agrees that service
of process upon such Party in any such action or proceeding shall be effective if notice is given
in accordance with Section 8.1 of the Purchase Agreement. Each Party hereto irrevocably
waives any and all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.



               Section 17.6 Entire Agreement. This Agreement (including the Schedules hereto), the
Purchase Agreement and the other Transaction Documents contain the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.



               Section 17.7 Force Majeure. Subject to Section 5 of this Agreement, neither
party shall be responsible to the other for any delay in or failure of performance of its
obligations under this Agreement (other than payment obligations under Section 2) to the
extent such delay or failure is attributable to any cause beyond its reasonable control, including
any act of God, fire, earthquake, failures of its computers or electronic transmissions (but solely
to the extent outside its reasonable control), strike or other labor disputes, war, embargo or
other governmental act, or riot; provided, however, that the party affected thereby
gives the other party prompt written notice of the occurrence of any event that is likely to cause
any delay or failure setting forth a reasonable estimate of the length of any delay and any
expectation that it shall be unable to resume performance; and provided, further,
that said affected party shall use its commercially reasonable efforts to expeditiously overcome
the effects of that event and resume performance with the least possible delay. For the avoidance
of doubt, Buyer shall not be obligated to pay ResCap or any of its controlled Affiliates for
Services during the period of time when ResCap is not providing, or causing to be provided, such
Services.



               Section 17.8 Conflicts. In case of conflict between the terms and conditions of this
Agreement and the Purchase Agreement, the Purchase Agreement shall control.



               Section 17.9 Schedules. All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full herein.



[SIGNATURE PAGE FOLLOWS THIS PAGE]




9









 






EXHIBIT F




     IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed
as of the date first written above.



	 	 	 	 	 
	 	RESIDENTIAL CAPITAL, LLC,
     
on behalf of itself and its controlled Affiliates

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	MHPOOL HOLDINGS LLC,

on behalf of itself and Subsidiary

 	 
	 	By:  	 	 



	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



Schedule I




SERVICES TO BE PROVIDED





	•	 	Employees, including support of asset managers from ResCap’s Special Assets Group and
internal ResCap legal counsel;
	 
	•	 	Third party professional service providers, including legal;
	 
	•	 	Cash management services;
	 
	•	 	IT services;
	 
	•	 	Accounting services;
	 
	•	 	Insurance;
	 
	•	 	Use of the Richmond, Virginia headquarters facility, the Dallas, Texas servicing facility
and/or such other facilities as determined by ResCap; provided, however, that
if there is a material reduction in the performance of Services at the Richmond, Virginia or
Dallas, Texas facility, taken as a whole, then ResCap’s designation of replacement facilities
to perform such Services shall require Buyer’s prior written consent, which shall not be
unreasonably withheld, delayed or conditioned; and
	 
	•	 	Such other Services as may be necessary or incidental to own, operate and maintain the
Subject Assets for the benefit of Buyer consistent with the ordinary course of business
consistent with past practice relating to the Subject Assets.





PRICING





	•	 	$300 per month per REO model; plus
	 
	•	 	For all models under lease as of the end of the applicable calendar month, 30 basis points
per annum on value allocated to such models as per Exhibit C of the Purchase Agreement; plus
	 
	•	 	Reimbursement for direct, out-of-pocket costs and expenses incurred during the applicable
calendar month in connection with providing for Services, including, without limitation,
taxes, utilities, insurance premiums, fees and expenses of outside counsel, accountants, and
other outside professionals and advisors, and all costs and fees incurred in pursuing any
insurance claims (including costs of professional adjusters).




11









 











EXHIBIT F




LIMITED ASSIGNMENT AND ASSUMPTION AGREEMENT




     This Limited Assignment and Assumption Agreement (this “Assignment”) is made and executed as
of the 30th day of September, 2008, by and among KBOne, LLC, a Delaware limited liability company
(“KBOne”), DOA Holdings NoteCo, LLC, a Delaware limited liability company (“Holdings”), Residential
Funding Company, LLC, a Delaware limited liability company (“RFC”), and MHPool Holdings LLC, a
Delaware limited liability company (“Buyer”).



RECITALS:




     A. KBOne entered into a certain Second Amended and Restated Master Sale and Rental Agreement,
dated June 5, 2006 (the “MSRA”), with KB Home, a Delaware corporation (“KB Home”), and certain
other affiliates of KB Home identified in the MSRA (KB Home and such other affiliates being
sometimes hereinafter collectively referred to as the “Builder”).



     B. Pursuant to the terms of the MSRA, KBOne agreed to purchase certain single family
residential homes from Builder, and to lease such homes back to Builder for use as model homes in
residential developments in which Builder develops and constructs additional for-sale homes.



     C. In connection with the proposed purchase of homes pursuant to the MSRA, KBOne made and
delivered to KB Home a certain Amended and Restated Note, dated June 5, 2006 (the “KB Home Note”),
evidencing KBOne’s obligation to pay those portions of the purchase price of homes purchased by
KBOne pursuant to the MSRA that were not paid in cash by KBOne to KB Home upon the closing of the
purchase of such homes by KBOne.



     D. In connection with the KB Home Note, Residential Funding Corporation, the predecessor of
RFC, gave a performance and payment guaranty (the “Guaranty”) to KB Home, effective as of June 5,
2006, in connection with KBOne’s obligations under the MSRA and the Note.



     E. Effective as of June 9, 2008, all of the equity of KBOne was transferred indirectly to CMH
Holdings LLC (the “CMH Transfer”) pursuant to that Purchase Agreement, dated as of June 6, 2008,
among Residential Capital, LLC, GMAC Model Home Finance I, LLC and CMH Holdings LLC (the “June
Purchase Agreement”) and, in connection therewith, KBOne conveyed to DOA Properties IIIB (KB
Models), LLC, a Delaware limited liability company and a



12









 








subsidiary of Holdings (“DOA IIIB”), those certain model homes and real property on which they
are constructed described on attached Schedule 1 (the “DOA Models”), and KBOne retained
title to those certain model homes and real property on which they are constructed described on
attached Schedule 2 (the “CMH Models”).



     F. In connection with the CMH Transfer, (i) KBOne desires to assign to Holdings certain rights
and obligations under the MSRA and the KB Home Note, effective as of June 9, 2008, to the extent
set forth herein, and Holdings desires to assume the same, and KBOne desires to retain certain
rights and obligations under the MSRA and the KB Home Note, to the extent set forth herein, and
(ii) RFC desires to assign to KBOne, effective as of June 9, 2008, certain rights

 and obligations under the Guaranty, to the extent set forth herein, and KBOne desires to assume the
same, and RFC desires to retain certain rights and obligations under the Guaranty, to the extent
set forth herein.




     G. Effective as of the date hereof, Holdings is hereby assigning to Buyer (the “DOA Transfer”)
pursuant to that Purchase Agreement, dated as of September 30, 2008, among Residential Capital, LLC
(“ResCap”), DOA Holding Properties, LLC, DOA IIIB and Buyer (the “September Purchase Agreement”)
all of its right, title and interest in and to those DOA Models described on attached
Schedule 3 (the “Pool 1 Models”) by way of a transfer of all of the outstanding equity of
DOA IIIB, and DOA Holding Properties, LLC, and ResCap are retaining beneficial ownership of those
certain DOA Models described on attached Schedule 4 (the “Excluded Models”).



     H. In connection with the DOA Transfer, Holdings and RFC desire to assign to Buyer certain
rights and obligations under the MSRA, the KB Home Note and the Guaranty, effective as of the date
hereof, to the extent set forth herein, and Holdings and RFC desire to retain certain rights and
obligations under the MSRA, the KB Home Note and the Guaranty, to the extent set forth herein.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of KBOne, Holdings, RFC and Buyer hereby agree as follows:



     Section 1. Assignment and Assumption of Obligations.



          (a) Effective as of June 9, 2008, (i) KBOne hereby assigns and conveys to Holdings certain
rights and obligations in, to and under the MSRA and the KB Home Note, but only to the extent set
forth opposite Holdings’ name on Exhibit A hereto, and Holdings hereby



13









 






assumes all of such rights and obligations, and KBOne hereby retains certain rights and
obligations under the MSRA and the KB Home Note, but only to the extent set forth opposite KBOne’s
name on Exhibit A hereto, and (ii) RFC hereby assigns and conveys to KBOne certain rights and
obligations under the Guaranty, but only to the extent set forth opposite KBOne’s name on Exhibit A
hereto, and KBOne hereby assumes all of such rights and obligations, and RFC hereby retains all
other rights and obligations under the Guaranty, as set forth on Exhibit A.




          (b) Effective as of the date hereof, (i) Holdings hereby assigns and conveys to Buyer certain
rights and obligations in, to and under the MSRA and the KB Home Note, but only to the extent set
forth opposite Buyer’s name on Exhibit B hereto, and Buyer hereby assumes all of such rights and
obligations, and Holdings hereby retains certain rights and obligations under the MSRA and the KB
Home Note, but only to the extent set forth opposite Buyer’s name on Exhibit B hereto, and (ii) RFC
hereby assigns and conveys to Buyer certain rights and obligations under the Guaranty, but only to
the extent set forth opposite Buyer’s name on Exhibit B hereto, and Buyer hereby assumes all of
such rights and obligations, and RFC hereby retains all other rights and obligations under the
Guaranty, as set forth on Exhibit B.




          Section 2. Other Covenants of the Parties. Each of KBOne, Holdings, RFC and Buyer
hereby agrees and covenants that it shall not agree to any modification or amendment of, or waiver
any of its rights under, the Note, the MSRA or the guaranty, without the prior written consent of
each of the other parties hereto.




          Section 3. Further Assurances. KBOne, Holdings, RFC and Buyer agree to cooperate
with each other and to execute such other documents and take such other actions as may be
reasonably required to give effect to the intent and agreements of the parties as set forth in this
Assignment.




[SIGNATURE PAGE FOLLOWS]




14









 








     IN WITNESS WHEREOF, the undersigned have executed and delivered this Limited Assignment and
Assumption Agreement as of the date set forth above.



	 	 	 	 	 	 	 	 	 
	 	 	KBOne, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DOA Holdings NoteCo, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Residential Funding Company, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MHPOOL HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





15









 





EXHIBIT F




SCHEDULE 1

DOA MODELS




 









 








SCHEDULE 2

CMH MODELS




2









 








SCHEDULE 3

POOL 1 MODELS




3









 








SCHEDULE 4

EXCLUDED MODELS





4











 







EXHIBIT A




	 	 	 	 	 	 	 
	Allocation:	 	KB Home Note	 	MSRA	 	Guaranty
	KBOne, LLC

	 	All rights directly arising
from the CMH Models. 




The following obligations,
solely to the extent directly
arising from the CMH Models:

 

•   Note Shortfall;and

•   Commission Shortfall;



provided, that the foregoing
obligations shall exclude
Retained Liabilities (as
defined in the June Purchase
Agreement).
	 	All rights directly arising
from the CMH Models, including
all rights to indemnification
for losses directly related to
the CMH Models.

 

The following obligations,
solely to the extentdirectly
arising from the CMH Models:

 

•   Obligations arising
after June 9, 2008



provided, that the foregoing
obligations shall exclude
Retained Liabilities (as
defined in the June Purchase
Agreement) (for the avoidance
of doubt, KBOne, LLC assumes
no obligations under
Section 13.17 of the MSRA).
	 	All obligations directly
arising from the obligations
allocated under this Exhibit A 
to KBOne, LLC in respect of
the Note and MSRA; provided, 
that
KBOne, LLC shall not be
obligated to pay any amounts
contemplated to be paid to
“Builder” (as defined in the
MSRA) pursuant to
clause (ii)(z) or the last
sentence of Section 1(a) of
the Guaranty (i.e., any
minimum commitment to
“Builder” (as defined in the
MSRA) to pay 10% of the
principal balance of the Note
attributed to the CMH Models).
	 
	 	 	 	 	 	 
	DOA Holding 

Properties, LLC

	 	All other rights and
obligations under the KB Home
Note prior to, on or after the
effective date of this
Assignment (other than those
specifically allocated to
KBOne, LLC above).
	 	All other rights and
obligations under the MSRA
prior to, on or after June 9,
2008 (other than those
specifically allocated to
KBOne, LLC above), including
all obligations under
Section 8.5 of the MSRA
pertaining to any model homes
other than the CMH Models.	 	 
	 
	 	 	 	 	 	 
	Residential 

Funding Company, 

LLC

	 	 	 	 	 	All other obligations under
the Guaranty prior to, on or
after the effective date of
this Assignment (as defined in
the June Purchase Agreement).
	 
	 	 	 	 	 	 





	 	 	 	 	 	 	 
	Other:	 	Holdings’ obligations 	 	 	Holdings’ obligations 	 	 	RFC’s obligations under 







5










 





	 	 	 	 	 	 	 
	Allocation:	 	KB Home Note	 	MSRA	 	Guaranty
	 

	 	under the KB Home Note to be treated
as Retained Liabilities under
the June Purchase Agreement
(including for purposes of the
indemnity).
	 	under the MSRA to be treated as
Retained Liabilities under the
June Purchase Agreement
(including for purposes of the
indemnity).
	 	the Guaranty to be treated as
Retained Liabilities under the
June Purchase Agreement
(including for purposes of the
indemnity).
	 
	 	 	 	 	 	 
	 

	 	If an event of default occurs,
KBOne, LLC and Holdings to be
responsible for the principal
and interest associated with
the CMH Models and DOA Models,
respectively.
	 	Residential Capital, LLC to
agree to perform, pursuant to
the servicing agreement
currently in effect, any of
KBOne, LLC’s obligations under
the MSRA.	 	 






6









 








EXHIBIT B




	 	 	 	 	 	 	 
	Allocation:	 	KB Home Note	 	MSRA	 	Guaranty
	Buyer

	 	All rights directly arising
from the Pool 1 Models.

 

The following obligations,
solely to the extent directly
arising from the Pool 1 Models:

 

•    Note Shortfall; and

•    Commission Shortfall;


 

provided, that the foregoing
obligations shall exclude
Retained Liabilities (as
defined in the September
Purchase Agreement).
	 	All rights directly arising
from the Pool 1 Models,
including all rights to
indemnification for losses
directly related to the Pool 1
Models.

 

The following obligations,
solely to the extent directly
arising from Pool 1 Models:

 

•    Obligations arising
after the date hereof


 

provided, that the foregoing
obligations shall exclude
Retained Liabilities (as
defined in the September
Purchase Agreement) (for the
avoidance of doubt, Buyer
Entity assumes no obligations
under Section 13.17 of the
MSRA).
	 	All obligations directly
arising from the obligations
allocated under this chart to
Buyer in respect of the KB
Home Note and MSRA; provided, 
that
Buyer shall not be obligated
to pay any amounts
contemplated to be paid to
“Builder” (as defined in the
MSRA) pursuant to
clause (ii)(z) or the last
sentence of Section 1(a) of
the Guaranty (i.e., any
minimum commitment to
“Builder” (as defined in the
MSRA) to pay 10% of the
principal balance of the Note
attributed to the Pool 1
Models).
	 
	 	 	 	 	 	 
	DOA Holding 

Properties, LLC

	 	All other rights and
obligations under the KB Home
Note prior to, on or after the
effective date of this
Assignment (other than those
specifically allocated to
Buyer above).
	 	All other rights and
obligations under the MSRA
prior to, on or after the
effective date of this
Assignment (other than those
specifically allocated to
Buyer above), including all
obligations under Section 8.5
of the MSRA pertaining to any
model homes other than the
Pool 1 Models.	 	 
	 
	 	 	 	 	 	 
	RFC

	 	 	 	 	 	All other obligations under
the Guaranty prior to, on or
after the effective date of
this Assignment.
	 
	 	 	 	 	 	 
	Other:

	 	Holdings’ obligations under
the KB Home Note to be treated
as Retained Liabilities under
	 	Holdings’ obligations under
the MSRA to be treated as
Retained Liabilities under the
	 	RFC’s obligations under the
Guaranty to be treated as
Retained Liabilities under the






7









 






	 	 	 	 	 	 	 
	Allocation:	 	KB Home Note	 	MSRA	 	Guaranty
	 

	 	the September Purchase
Agreement (including for
purposes of the indemnity).
	 	September Purchase Agreement
(including for purposes of the
indemnity).
	 	September Purchase Agreement
(including for purposes of the
indemnity).
	 
	 	 	 	 	 	 
	 

	 	If an event of default occurs,
Buyer and Holdings to be
responsible for the principal
and interest associated with
the Pool 1 Models and Excluded
Models, respectively.
	 	Residential Capital, LLC to
agree to perform, pursuant to
the servicing agreement
currently in effect, any of
Buyer’s obligations under the
MSRA.	 	 






8











 





EXHIBIT G




MUTUAL RELEASE




Dated as of September 30, 2008




     Pursuant to Sections 2.6(b) and 2.7(c) of that certain Purchase Agreement, dated as of
September 30, 2008 (the “Purchase Agreement”), by and among Residential Capital, LLC, a
Delaware limited liability company (“ResCap”), DOA Holding Properties, LLC, a Delaware
limited liability company and an indirect wholly-owned subsidiary of ResCap (“Seller”), DOA
Properties IIIB (KB Models), LLC, a Delaware limited liability company and direct wholly-owned
subsidiary of Seller (“Subsidiary”) and MHPool Holdings LLC, a Delaware limited liability company
(“Buyer”), this Mutual Release (the “Release”), dated as of the Closing Date, is being
entered into by ResCap, on behalf of itself and its controlled Affiliates (other than Subsidiary)
on the one hand, and Subsidiary, on the other hand. Except as otherwise defined herein, terms used
herein with initial capital letters are so used with the meanings ascribed thereto in the Purchase
Agreement.



     Effective as of the Closing, each of ResCap, on behalf of itself and its controlled Affiliates
(other than Subsidiary), on the one hand, and Subsidiary, on the other hand, hereby irrevocably and
unconditionally releases and forever discharges one another and each of their respective past and
present parents, subsidiaries and Affiliates, together with each of their respective officers,
directors, members, managers, employees, agents, representatives and attorneys, predecessors,
successors and assigns from any and all Liabilities to one another, including all Liabilities
arising out of or in connection with the assets, properties, businesses or operations of the
Subsidiary, the Interests and/or the Subject Assets, prior to, or as of, the Closing or otherwise
from events, actions, omissions, failures to act or circumstances occurring or existing prior to,
or as of, the Closing; provided, however, that, notwithstanding anything to the
contrary herein, nothing herein shall release or discharge or be construed or otherwise deemed to
release or discharge any rights, Liabilities, claims, agreements, arrangements or undertakings of
any Person arising pursuant to any of the Transaction Documents (including, without limitation, the
indemnification obligations of ResCap pursuant to Article VII of the Purchase Agreement) or any
certificate or document required to be executed in connection with the execution of the Purchase
Agreement or the consummation of the transactions contemplated thereby or otherwise expressly
contemplated by any of the Transaction Documents to continue after the Closing.



     Each of ResCap, on behalf of itself and its controlled Affiliates (other than Subsidiary) and
Subsidiary hereby irrevocably covenants to, and shall cause its respective controlled Affiliates
to, refrain from, directly or indirectly, asserting or commencing, instituting or causing to be
commenced, any claim for Liabilities of any nature whatsoever based upon any matter covered by this
Release (other than Liabilities excluded pursuant to the proviso set forth in the paragraph above).



     Each of ResCap and Subsidiary hereby expressly waives, and shall cause its respective
controlled Affiliates to waive any rights it may have under any statute, law, rule or regulation
applicable to the Liabilities released hereby. Each of ResCap and Subsidiary, on behalf of itself
and its respective controlled Affiliates, assumes the risk of the subsequent discovery or



 









 







understanding of any matter, fact or law which, if known or understood, would in any respect
have affected the releases and waivers made herein. In furtherance of the foregoing:



     EACH PARTY HERETO ACKNOWLEDGES THAT IT IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:



     “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”



[Signature Page Follows]




 









 








     IN WITNESS WHEREOF, each of the undersigned has duly executed this Release as of the date
written above.



	 	 	 	 	 
	 	ResCap (on behalf of itself and its controlled

Affiliates, other than Subsidiary):





RESIDENTIAL CAPITAL, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Subsidiary:





DOA PROPERTIES IIIB (KB MODELS), LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 












 





EXHIBIT H







	Contract Concerning Page of 8 02-13-06 (Address of Property)
EQUAL HOUSING PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
OPPORTUNITY ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE)
NOTICE: Not For Use For Condominium Transactions
1. PARTIES:
(Seller) agrees to sell and convey to (Buyer) and Buyer agrees to buy from Seller the
Property described below.
2. PROPERTY:A. LAND: Lot            Block      , Addition, City of , County of , Texas,
known as (address/zip code), or as described on attached exhibit. B. IMPROVEMENTS: The house,
garage and all other fixtures and improvements attached to the above-described real property,
including without limitation, the following permanently installed and built-in items, if any: all
equipment and appliances, valances, screens, shutters, awnings, wall-to-wall carpeting, mirrors,
ceiling fans, attic fans, mail boxes, television antennas and satellite dish system and equipment,
heating and air-conditioning units, security and fire detection equipment, wiring, plumbing and
lighting fixtures, chandeliers, water softener system, kitchen equipment, garage door openers,
cleaning equipment, shrubbery, landscaping, outdoor cooking equipment, and all other property owned
by Seller and attached to the above described real property. C. ACCESSORIES: The following
described related accessories, if any: window air conditioning units, stove, fireplace screens,
curtains and rods, blinds, window shades, draperies and rods, controls for satellite dish system,
controls for garage door openers, entry gate controls, door keys, mailbox keys, above ground pool,
swimming pool equipment and maintenance accessories, and artificial fireplace logs. D. EXCLUSIONS:
The following improvements and accessories will be retained by Seller and removed prior to
delivery of possession: . The land, improvements and accessories are collectively referred to as
the “Property”.
3. SALES PRICE:
A. Cash portion of Sales Price payable by Buyer at closing.. $ B. Sum of all financing described
below (excluding any loan funding fee or mortgage insurance premium)... $
C. Sales Price (Sum of A and B).. $ 4. FINANCING: The portion of Sales Price not payable in
cash will be paid as follows: (Check applicable boxes below)
A. THIRD PARTY FINANCING: One or more third party mortgage loans in the total amount of
$(excluding any loan funding fee or mortgage insurance premium).
(1) Property Approval: If the Property does not satisfy the lenders’ underwriting requirements for
the loan(s), this contract will terminate and the earnest money will be refunded to Buyer. (2)
Financing Approval: (Check one box only) (a) This contract is subject to Buyer being approved for
the financing described in the attached Third Party Financing Condition Addendum. (b) This
contract is not subject to Buyer being approved for financing and does not involve FHA or VA
financing.
B. ASSUMPTION: The assumption of the unpaid principal balance of one or more promissory notes
described in the attached TREC Loan Assumption Addendum.
C. SELLER FINANCING: A promissory note from Buyer to Seller of $
        , secured by vendor’s and deed of trust liens, and containing the terms and conditions
described in the attached TREC Seller Financing Addendum. If an owner policy of title insurance is
furnished, Buyer shall furnish Seller with a mortgagee policy of title insurance. 5. EARNEST MONEY:
Upon execution of this contract by both parties, Buyer shall deposit $
as earnest money with , as escrow agent, at (address). Buyer shall deposit additional
earnest money of $        with escrow agent within            days after the
effective date of this contract. If Buyer fails to deposit the earnest money as required
 by this
contract, Buyer will be in default.
6. TITLE POLICY AND SURVEY:A. TITLE POLICY: Seller shall furnish to Buyer at Seller’s Buyer’s
expense an owner policy of title insurance (Title Policy) issued by (Title Company) in the amount
of the Sales Price, dated at or after closing, insuring Buyer Initialed for identification by Buyer
and Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 2 of 8 02-13-06 (Address of Property)
against loss under the provisions of the Title Policy, subject to the promulgated exclusions
(including existing building and zoning ordinances) and the following exceptions: (1) Restrictive
covenants common to the platted subdivision in which the Property is located. (2) The standard
printed exception for standby fees, taxes and assessments. (3) Liens created as part of the
financing described in Paragraph 4. (4) Utility easements created by the dedication deed or plat of
the subdivision in which the Property is located. (5) Reservations or exceptions otherwise
permitted by this contract or as may be approved by Buyer in writing. (6) The standard printed
exception as to marital rights. (7) The standard printed exception as to waters, tidelands,
beaches, streams, and related matters. (8) The standard printed exception as to discrepancies,
conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping
improvements. Buyer, at Buyer’s expense, may have the exception amended to read, “shortages in
area”. B. COMMITMENT: Within 20 days after the Title Company receives a copy of this contract,
Seller shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer’s
expense, legible copies of restrictive covenants and documents evidencing exceptions in the
Commitment (Exception Documents) other than the standard printed exceptions. Seller authorizes the
Title Company to deliver the Commitment and Exception Documents to Buyer at Buyer’s address shown
in Paragraph 21. If the Commitment and Exception Documents are not delivered to Buyer within the
specified time, the time for delivery will be automatically extended up to 15 days or the Closing
Date, whichever is earlier. C. SURVEY: The survey must be made by a registered professional land
surveyor acceptable to the Title Company and any lender. (Check one box only)
(1) Within            days after the effective date of this contract, Seller shall furnish to
Buyer and Title Company Seller’s existing survey of the Property and a Residential Real Property
Affidavit promulgated by the Texas Department of Insurance (Affidavit). If the existing survey or
Affidavit is not acceptable to Title Company or Buyer’s lender, Buyer shall obtain a new survey at
Seller’s Buyer’s expense no later than 3 days prior to Closing Date. If Seller fails to furnish
the existing survey or Affidavit within the time prescribed, Buyer shall obtain a new survey at
Seller’s expense no later than 3 days prior to Closing Date.
(2) Within            days after the effective date of this contract, Buyer shall obtain a new
survey at Buyer’s expense. Buyer is deemed to receive the survey on the date of actual receipt or
the date specified in this paragraph, whichever is earlier. (3) Within            days after the
effective date of this contract, Seller, at Seller’s expense shall furnish a new survey to Buyer.
D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title:
disclosed on the survey other than items 6A(1) through (7) above; disclosed in the Commitment other
than items 6A(1) through (8) above; or which prohibit the following use or activity: . Buyer must
object not later than (i) the Closing Date or (ii) days after Buyer receives the Commitment,
Exception Documents, and the survey, whichever is earlier. Buyer’s failure to object within the
time allowed will constitute a waiver of Buyer’s right to object; except that the requirements in
Schedule C of the Commitment are not waived. Provided Seller is not obligated to incur
any expense, Seller shall cure the
timely objections of Buyer or any third party lender within 15 days after Seller receives the
objections and the Closing Date will be extended as necessary. If objections are not cured within
such 15 day period, this contract will terminate and the earnest money will be refunded to Buyer
unless Buyer waives the objections. E. TITLE NOTICES:(1) ABSTRACT OR TITLE POLICY: Broker advises
Buyer to have an abstract of title covering the Property examined by an attorney of Buyer’s
selection, or Buyer should be furnished with or obtain a Title Policy. If a Title Policy is
furnished, the Commitment should be promptly reviewed by an attorney of Buyer’s choice due to the
time limitations on Buyer’s right to object. (2) MANDATORY OWNERS’ ASSOCIATION MEMBERSHIP: The
Property is is not subject to mandatory membership in an owners’ association. If the Property
is subject to mandatory membership in an owners’ association, Seller notifies Buyer under §5.012,
Texas Property Code, that, as a purchaser of property in the residential community in which
the Property is located, you are obligated to be a member of the owners’ association. Restrictive
covenants governing the use and occupancy of the Property and a dedicatory instrument governing
the establishment, maintenance, and operation of this residential community have been or will be
recorded in the Real Property Records of the county in which the Property is located. Copies of the
restrictive covenants and dedicatory instrument may be obtained from the county clerk. You are
obligated to pay
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	Contract Concerning
Page 3 of 8 02-13-06 (Address of Property)
assessments to the owners’ association. The amount of the assessments is subject to change. Your
failure to pay the assessments could result in a lien on and the foreclosure of the Property. If
Buyer is concerned about these matters, the TREC promulgated Addendum for Property Subject to
Mandatory Membership in an Owner’s Association should be used. (3) STATUTORY TAX DISTRICTS: If the
Property is situated in a utility or other statutorily created district providing water, sewer,
drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller
to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or
standby fee of the district prior to final execution of this contract. (4) TIDE WATERS: If the
Property abuts the tidally influenced waters of the state, §33.135,Texas Natural Resources Code,
requires a notice regarding coastal area property to be included in the contract. An addendum
containing the notice promulgated by TREC or required by the parties must be used. (5) ANNEXATION:
If the Property is located outside the limits of a municipality, Seller notifies Buyer under
§5.011, Texas Property Code, that the Property may now or later be included in the extraterritorial
jurisdiction of a municipality and may now or later be subject to annexation by the municipality.
Each municipality maintains a map that depicts its boundaries and extraterritorial jurisdiction. To
determine if the Property is located within a municipality’s extraterritorial jurisdiction or is
likely to be located within a municipality’s extraterritorial jurisdiction, contact all
municipalities located in the general proximity of the Property for further information. (6)
PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE PROVIDER: Notice required by
§13.257, Water Code: The real property, described in Paragraph 2, that you are about to purchase
may be located in a certificated water or sewer service area, which is authorized by law to provide
water or sewer service to the properties in the certificated area. If your property is located in a
certificated area there may be special costs or charges that you will be required to pay before you
can receive water or sewer service. There may be a period required to construct lines or other
facilities necessary to provide water or sewer service to your property. You are advised to
determine if the property is in a certificated area and contact the utility service provider to
determine the cost that you will be required to pay and the period, if any, that is required to
provide water or sewer service to your property. The undersigned Buyer hereby acknowledges receipt
of the foregoing notice at or before the execution of a binding contract for the purchase of the
real property described in Paragraph 2 or at closing of purchase of the real property. (7) PUBLIC
IMPROVEMENT DISTRICTS: If the Property is in a public improvement district, §5.014, Property Code,
requires Seller to notify Buyer as follows: As a purchaser of this parcel of real property you are
obligated to pay an assessment to a municipality or county for an improvement project undertaken by
a public improvement district under Chapter 372, Local Government Code. The assessment may be due
annually or in periodic installments. More information concerning the amount of the assessment and
the due dates of that assessment may be obtained from the municipality or county levying the
assessment. The amount of the assessments is subject to change. Your failure to pay the
assessments could result in a lien on and the foreclosure of your property.
7. PROPERTY CONDITION:
A. ACCESS,INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer’s agents access to the
Property at reasonable times. Buyer may have the Property inspected by inspectors selected by Buye
r
and licensed by TREC or otherwise permitted by law to make inspections. Seller at Seller’s expense
shall turn on existing utilities for inspections. B. SELLER’S DISCLOSURE NOTICE PURSUANT TO §5.008,
TEXAS PROPERTY CODE (Notice): (Check one box only)
(1) Buyer has received the Notice.
(2) Buyer has not received the Notice. Within            days after the effective date of
this contract, Seller shall deliver the Notice to Buyer. If Buyer does not receive the Notice,
Buyer may terminate this contract at any time prior to the closing and the earnest money will be
refunded to Buyer. If Seller delivers the Notice, Buyer may terminate this contract for any reason
within 7 days after Buyer receives the Notice or prior to the closing, whichever first occurs, and
the earnest money will be refunded to Buyer.
(3) The Seller is not required to furnish the notice under the Texas Property Code. C.
SELLER’S DISCLOSURE OF LEAD-BASED PAINT AND LEAD-BASED PAINT HAZARDS is required by Federal law for
a residential dwelling constructed prior to 1978. D. ACCEPTANCE OF PROPERTY CONDITION: Buyer
accepts the Property in its present condition; provided Seller, at Seller’s expense, shall complete
the following specific repairs and treatments:
E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless otherwise agreed in writing, neither party is
obligated to pay for lender required repairs, which includes treatment for wood Initialed
for identification by Buyer            and Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 4 of 8 02-13-06 (Address of Property)
destroying insects. If the parties do not agree to pay for the lender required repairs or
treatments, this contract will terminate and the earnest money will be refunded to Buyer. If the
cost of lender required repairs and treatments exceeds 5% of the Sales Price, Buyer may terminate
this contract and the earnest money will be refunded to Buyer. F. COMPLETION OF REPAIRS AND
TREATMENTS: Unless otherwise agreed in writing, Seller shall complete all agreed repairs and
treatments prior to the Closing Date. All required permits must be obtained, and repairs and
treatments must be performed by persons who are licensed or otherwise authorized by law to provide
such repairs or treatments. At Buyer’s election, any transferable warranties received by Seller
with respect to the repairs and treatments will be transferred to Buyer at Buyer’s expense.
If Seller fails to complete any agreed repairs and treatments prior to the Closing Date, Buyer may
do so and receive reimbursement from Seller at closing. The Closing Date will be extended up to 15
days, if necessary, to complete repairs and treatments. G. ENVIRONMENTAL MATTERS: Buyer is advised
that the presence of wetlands, toxic substances, including asbestos and wastes or other
environmental hazards, or the presence of a threatened or endangered species or its habitat may
affect Buyer’s intended use of the Property. If Buyer is concerned about these matters, an addendum
promulgated by TREC or required by the parties should be used. H. RESIDENTIAL SERVICE CONTRACTS:
Buyer may purchase a residential service contract from a residential service company licensed by
TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing
for the cost of the residential service contract in an amount not exceeding $ .
Buyer should review any residential service contract for the scope of coverage, exclusions and
limitations. The purchase of a residential service contract is optional. Similar coverage may be
purchased from various companies authorized to do business in Texas. 8. BROKERS’ FEES: All
obligations of the parties for payment of brokers’ fees are contained in separate written
agreements.
9. CLOSING:
A. The closing of the sale will be on or before      , 20 , or
within 7 days after objections made under Paragraph 6D have been cured or waived, whichever date is
later (Closing Date). If either party fails to close the sale by the Closing Date, the
non-defaulting party may exercise the remedies contained in Paragraph 15. B. At closing:(1) Seller
shall execute and deliver a special warranty deed conveying title to the Property to Buyer and
showing no additional exceptions to those permitted in Paragraph 6 and furnish tax statements or
certificates showing no delinquent taxes on the Property. (2) Buyer shall pay the Sales Price in
good funds acceptable to the escrow agent. (3) Seller and Buyer shall execute and deliver any
notices, statements, certificates, affidavits, releases, loan documents and other documents
required of them by this contract, the Commitment or law necessary for the closing of the sale and
the issuance of the Title Policy. C. Unless expressly prohibited by written agreement, Seller may
continue to show the Property and receive, negotiate and accept back up offers.
D. All covenants, representations and warranties in this contract survive closing.
10. POSSESSION: Seller shall deliver to Buyer possession of the Property in its present or required
condition, ordinary wear and tear excepted: upon closing and funding
according to a temporary residential lease form promulgated by TREC or other written lease required
by the parties. Any possession by Buyer prior to closing or by Seller after closing which is not
authorized by a written lease will establish a tenancy at sufferance relationship between the parties.
C
onsult your insurance agent prior to change of ownership and possession because insurance coverage
may be limited or terminated. The absence of a written lease or appropriate insurance coverage may
expose the parties to economic loss. 11. SPECIAL PROVISIONS: (Insert only factual statements and
business details applicable to the sale. TREC rules prohibit licensees from adding factual
statements or business details for which a contract addendum, lease or other form has been
promulgated by TREC for mandatory use.)
Initialed for identification by Buyer            and Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 5 of 8 02-13-06 (Address of Property)
12. SETTLEMENT AND OTHER EXPENSES:
A. The following expenses must be paid at or prior to closing: (1) Expenses payable by Seller
(Seller’s Expenses):
(a) Releases of existing liens, including prepayment penalties and recording fees; release of
Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of escrow
fee; and other expenses payable by Seller under this contract. (b) Seller shall also pay an amount
not to exceed $ to be applied in the following order: Buyer’s Expenses which Buyer is prohibited
from paying by FHA, VA, Texas Veterans Housing Assistance Program or other governmental loan
programs, and then to other Buyer’s Expenses as allowed by the lender. (2) Expenses payable by
Buyer (Buyer’s Expenses): (a) Loan origination, discount, buy-down, and commitment fees (Loan
Fees). (b) Appraisal fees; loan application fees; credit reports; preparation of loan documents;
interest on the notes from date of disbursement to one month prior to dates of first
monthly payments; recording fees; copies of easements and restrictions; mortgagee title policy with
endorsements required by lender; loan-related inspection fees; photos; amortization schedules;
one-half of escrow fee; all prepaid items, including required premiums for flood and hazard
insurance, reserve deposits for insurance, ad valorem taxes and special governmental assessments;
final compliance inspection; courier fee; repair inspection; underwriting fee; wire transfer fee;
expenses incident to any loan; and other expenses payable by Buyer under this contract. B. Buyer
shall pay Private Mortgage Insurance Premium (PMI), VA Loan Funding Fee, or FHA Mortgage Insurance
Premium (MIP) as required by the lender. C. If any expense exceeds an amount expressly stated in
this contract for such expense to be paid by a party, that party may terminate this contract unless
the other party agrees to pay such excess. Buyer may not pay charges and fees expressly prohibited
by FHA, VA, Texas Veterans Housing Assistance Program or other governmental loan program
regulations. 13. PRORATIONS: Taxes for the current year, interest, maintenance fees, assessments,
dues and rents will be prorated through the Closing Date. The tax proration may be calculated
taking into consideration any change in exemptions that will affect the current year’s taxes. If
taxes for the current year vary from the amount prorated at closing, the parties shall adjust the
prorations when tax statements for the current year are available. If taxes are not paid at or
prior to closing, Buyer shall pay taxes for the current year. 14. CASUALTY LOSS: If any part of the
Property is damaged or destroyed by fire or other casualty after the effective date of this
contract, Seller shall restore the Property to its previous condition as soon as reasonably
possible, but in any event by the Closing Date. If Seller fails to do so due to factors beyond
Seller’s control, Buyer may (a) terminate this contract and the earnest money will be refunded to
Buyer (b) extend the time for performance up to 15 days and the Closing Date will be extended as
necessary or (c) accept the Property in its damaged condition with an assignment of insurance
proceeds and receive credit from Seller at closing in the amount of the deductible under the
insurance policy. Seller’s obligations under this paragraph are independent of any other
obligations of Seller under this contract. 15. DEFAULT: If Buyer fails to comply with this
contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such
other relief as may be
provided by law, or both, or (b) terminate this contract and receive the earnest money as
liquidated damages, thereby releasing both parties from this contract. If, due to factors beyond
Seller’s control, Seller fails within the time
allowed to make any non-casualty repairs or deliver
the Commitment, or survey, if required of Seller, Buyer may (a) extend the time for performance up
to 15 days and the Closing Date will be extended as necessary or (b) terminate this contract as the
sole remedy and receive the earnest money. If Seller fails to comply with this contract for any
other reason, Seller will be in default and Buyer may (a) enforce specific performance, seek such
other relief as may be provided by law, or both, or (b) terminate this contract and receive the
earnest money, thereby releasing both parties from this contract. 16. MEDIATION: It is the policy
of the State of Texas to encourage resolution of disputes through alternative dispute resolution
procedures such as mediation. Any dispute between Seller and Buyer related to this contract which
is not resolved through informal discussion will will not be submitted to a mutually acceptable
mediation service or provider. The parties to the mediation shall bear the mediation costs equally.
This paragraph does not preclude a party from seeking equitable relief from a court of competent
jurisdiction. 17. ATTORNEY’S FEES: The prevailing party in any legal proceeding related to this
contract is entitled to recover reasonable attorney’s fees and all costs of such proceeding
incurred by the prevailing party. Initialed for identification by Buyer            and
Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 6 of 8 02-13-06 (Address of Property)
18. ESCROW:
A. ESCROW: The escrow agent is not (i) a party to this contract and does not have liability for
the performance or nonperformance of any party to this contract, (ii) liable for interest on the
earnest money and (iii) liable for the loss of any earnest money caused by the failure of any
financial institution in which the earnest money has been deposited unless the financial
institution is acting as escrow agent. B. EXPENSES: At closing, the earnest money must be applied
first to any cash down payment, then to Buyer’s Expenses and any excess refunded to Buyer. If no
closing occurs, escrow agent may require payment of unpaid expenses incurred on behalf of the
parties and a written release of liability of escrow agent from all parties. C. DEMAND: Upon
termination of this contract, either party or the escrow agent may send a release of earnest money
to each party and the parties shall execute counterparts of the release and deliver same to the
escrow agent. If either party fails to execute the release, either party may make a written demand
to the escrow agent for the earnest money. If only one party makes written demand for the earnest
money, escrow agent shall promptly provide a copy of the demand to the other party. If escrow agent
does not receive written objection to the demand from the other party within 15 days, escrow agent
may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses
incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to
the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby
releases escrow agent from all adverse claims related to the disbursal of the earnest money. D.
DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent
within 7 days of receipt of the request will be liable to the other party for liquidated damages of
three times the amount of the earnest money. E. NOTICES: Escrow agent’s notices will be effective
when sent in compliance with Paragraph 21. Notice of objection to the demand will be deemed
effective upon receipt by escrow agent. 19. REPRESENTATIONS: Seller represents that as of the
Closing Date (a) there will be no liens, assessments, or security interests against the Property
which will not be satisfied out of the sales proceeds unless securing payment of any loans assumed
by Buyer and (b) assumed loans will not be in default. If any representation of Seller in this
contract is untrue on the Closing Date, Seller will be in default. 20. FEDERAL TAX REQUIREMENTS: If
Seller is a “foreign person,” as defined by applicable law, or if Seller fails to deliver an
affidavit to Buyer that Seller is not a “foreign person,” then Buyer shall withhold from the sales
proceeds an amount sufficient to comply with applicable tax law and deliver the same to the
Internal Revenue Service together with appropriate tax forms. Internal Revenue Service regulations
require filing written reports if currency in excess of specified amounts is received in the
transaction. 21. NOTICES: All notices from one party to the other must be in writing and are
effective when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission
as follows:
To Buyer To Seller at: at:
Telephone: ( ) Telephone: ( )
Facsimile: ( ) Facsimile: ( )
E-mail: E-mail:
Initialed for identification by Buyer            and Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 7 of 8 02-13-06 (Address of Property)
22. AGREEMENT OF PARTIES: This contract contains the entire agreement of the parties and cannot be
changed except by their written agreement. Addenda which are a part of this contract are (Check
all applicable boxes):
Third Party Financing Condition Addendum for Property Subject to Mandatory Addendum Membership
in an Owners’ Association
Seller Financing Addendum Environmental Assessment, Threatened or Endangered Species and
Wetlands Addendum
Loan Assumption Addendum Addendum for “Back-Up” Contract
Buyer’s Temporary Residential Lease            Addendum for Coastal Area Property
Seller’s Temporary Residential Lease            Addendum for Property Located Seaward of the Gulf
Intracoastal Waterway
Addendum for Sale of Other Property            Addendum for Release of Liability on by Buyer
Assumption of FHA, VA, or Conventional Loan Restoration of Seller’s Entitlement for VA Guaranteed
Loan
Addendum for Seller’s Disclosure of            Other (list): Warranty Book Information
on Lead-based Paint and
Lead-based Paint Hazards as Required by Federal Law 23.TERMINATION OPTION: For nominal
consideration, the receipt of which is hereby acknowledged by Seller, and Buyer’s agreement to pay
Seller $ (Option Fee) within 2 days after the effective date of this
contract, Seller grants Buyer the unrestricted right to terminate this contract by giving notice of
termination to Seller within            days after the effective date of this contract. If no
dollar amount is stated as the Option Fee or if Buyer fails to pay the Option Fee within the time
prescribed, this paragraph will not be a part of this contract and Buyer shall not have the
unrestricted right to terminate this contract. If Buyer gives notice of termination within the time
prescribed, the Option Fee will not be refunded; however, any earnest money will be refunded to
Buyer. The Option Fee will will not be credited to the Sales Price at closing. Time is of the
essence for this paragraph and strict compliance with the time for performance is required.
24.CONSULT AN ATTORNEY: Real estate licensees cannot give legal advice. READ THIS CONTRACT
CAREFULLY. If you do not understand the effect of this contract, consult an attorney BEFORE
signing.
Buyer’s Seller’s
Attorney is: Attorney is:
Telephone: ( ) Telephone: ( )
Facsimile: ( ) Facsimile: ( )
E-mail: E-mail:
EXECUTED the            day of      , 20 (EFFECTIVE
DATE). (BROKER: FILL IN THE DATE OF FINAL ACCEPTANCE.)
Buyer            Seller
Buyer            Seller
The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are
intended for use only by trained real estate licensees. No representation
is made as to the legal validity or adequacy of any provision in any specific transactions. It is
not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX
78711-2188, 1-800-250-8732 or (512) 459-6544 (http://www.trec.state.tx.us) TREC NO. 20-7. This form
replaces TREC NO. 20-6.
Initialed for identification by Buyer and Seller TREC NO. 20-7





 









 








	Contract Concerning
Page 8 of 8 02-13-06 (Address of Property)
BROKER INFORMATION AND RATIFICATION OF FEE
Listing Broker has agreed to pay Other Broker of the total sales price when Listing Broker’s fee
is received. Escrow Agent is authorized and directed to pay Other Broker from Listing Broker’s fee
at closing.
Other Broker            License No. Listing Broker
License No. represents            Buyer only as Buyer’s
agent represents            Seller and Buyer as an intermediary            Seller as Listing
Broker’s subagent Seller only as Seller’s agent
Associate            Telephone Listing Associate
Telephone Broker’s Address Listing Associate’s Office
Address            Facsimile City            State
Zip City            State
Zip
Facsimile Email Address
Email Address            Selling Associate            Telephone
Selling Associate’s Office Address            Facsimile
City            State            Zip
Email Address
OPTION FEE RECEIPT
Receipt of $(Option Fee) in the form of            is acknowledged.
Seller or Listing Broker            Date
CONTRACT AND EARNEST MONEY RECEIPT
Receipt of Contract and $ Earnest Money in the form of is acknowledged. Escrow Agent: Date:
By:
Email Address
Telephone ( )
Address
Facsimile: ( )
City            State
Zip
Initialed for identification by Buyer and Seller TREC NO. 20-7





 









 








	02-13-06
PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
EQUAL HOUSING
OPPORTUNITY
THIRD PARTY FINANCING CONDITION ADDENDUM
TO CONTRACT CONCERNING THE PROPERTY AT
(Street Address and City)
Buyer shall apply promptly for all financing described below and make every reasonable effort to
obtain approval for the financing (Financing Approval). Buyer shall furnish all information and
documents required by lender for Financing Approval. Financing Approval will be deemed to have been
obtained when (1) the terms of the loan(s) described below are available and (2) lender determines
that Buyer has satisfied all of lender’s financial requirements (those items relating to Buyer’s
assets, income and credit history). If Buyer cannot obtain Financing Approval, Buyer may give
written notice to Seller within ___days after the effective date of this contract and this
contract will terminate and the earnest money will be refunded to Buyer. If Buyer does not give
such notice within the time required, this contract will no longer be subject to Financing
Approval. Time is of the essence for this paragraph and strict compliance with the time for
performance is required.
NOTE: Financing Approval does not include approval of lender’s underwriting requirements for the
Property, as specified in Paragraph 4.A.(1) of the contract.
Each note must be secured by vendor’s and deed of trust liens.
CHECK APPLICABLE BOXES:
A. CONVENTIONAL FINANCING:
(1) A first mortgage loan in the principal amount of $
(excluding any financed PMI premium), due in full in            year(s), with interest not to
exceed      % per annum for the first            year(s) of the loan with Loan Fees (loan
origination, discount, buy-down, and commitment fees) not to exceed % of the loan.
(2) A second mortgage loan in the principal amount of $
(excluding any financed PMI premium), due in full in            year(s), with interest not to
exceed      % per annum for the first            year(s) of the loan with Loan Fees
(loan origination, discount, buy-down, and commitment fees) not to exceed % of the loan.
B. TEXAS VETERANS HOUSING ASSISTANCE PROGRAM LOAN: A Texas Veterans Housing Assistance Program
Loan of $        for a period of at least            years at the interest rate
established by the Texas Veterans Land Board.
C. FHA INSURED FINANCING: A Section FHA insured loan of not less
than
$ (excluding any financed MIP), amortizable monthly for not less than
years, with interest not to exceed % per annum for the first            year(s) of the loan with Loan
Fees (loan origination, discount, buy-down, and commitment fees) not to exceed      % of
the loan. As required by HUD-FHA, if FHA valuation is unknown, “It is expressly agreed that,
notwithstanding any other provision of this contract, the purchaser (Buyer) shall not be obligated
to complete the purchase of the Property described herein or to incur any penalty by forfeiture of
earnest money deposits
or otherwise unless the purchaser (Buyer) has been given in accordance with HUD/FHA or VA
requirements a written statement issued by the Federal Housing Commissioner, Department of Veterans
Affairs, or a Direct Endorsement Lender setting forth the appraised value of the Property of
not less than $ . The purchaser (Buyer) shall have the privilege and option
of proceeding with consummation of the contract without regard to the amount of the
Initialed for identificat
ion by Buyer and Seller TREC NO. 40-2
(TAR-1901) 2-13-06 Page 1 of 2





 









 








	Third Party Financing Condition Addendum Concerning
Page 2 of 2 02-13-06
(Address of Property)
appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the
Department of Housing and Urban Development will insure. HUD does not warrant the value or the
condition of the Property. The purchaser (Buyer) should satisfy himself/herself that the price and
the condition of the Property are acceptable.”
NOTE: HUD 92564-CN “For Your Protection: Get a Home Inspection” must be signed and dated by Buyer
and attached to this Addendum.
D. VA GUARANTEED FINANCING: A VA guaranteed loan of not less than $




	(excluding any financed Funding Fee), amortizable monthly for not less than            years, with
interest not to exceed      % per annum for the first            year(s) of the loan with Loan
Fees (loan origination, discount, buy-down, and commitment fees) not to exceed % of the loan.
VA NOTICE TO BUYER: “It is expressly agreed that, notwithstanding any other provisions of this
contract, the Buyer shall not incur any penalty by forfeiture of earnest money or otherwise or be
obligated to complete the purchase of the Property described herein, if the contract purchase price
or cost exceeds the reasonable value of the Property established by the Department of Veterans
Affairs. The Buyer shall, however, have the privilege and option of proceeding with the
consummation of this contract without regard to the amount of the reasonable value established by
the Department of Veterans Affairs.”
If Buyer elects to complete the purchase at an amount in excess of the reasonable value established
by VA, Buyer shall pay such excess amount in cash from a source which Buyer agrees to disclose to
the VA and which Buyer represents will not be from borrowed funds except as approved by VA. If VA
reasonable value of the Property is less than the Sales Price, Seller may reduce the Sales Price to
an amount equal to the VA reasonable value and the sale will be closed at the lower Sales Price
with proportionate adjustments to the down payment and the loan amount.
Buyer hereby authorizes any lender to furnish to the Seller or Buyer or their representatives
information relating only to the status of Financing Approval of Buyer.
Buyer            Seller
Buyer            Seller
This form has been approved by the Texas Real Estate Commission for use with similarly approved
or promulgated contract forms. Such approval relates to this form only. TREC forms are
intended for use only by trained real estate licensees. No representation is made as to the legal
validity or adequacy of any provision in any specific transactions. It is not intended for
complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188,
1-800-250-8732 or (512) 459-6544 (http://www.trec.state.tx.us) TREC No. 40-2. This form replaces TREC No. 40-1.
TREC NO. 40-2
(TAR-1901) 2-13-06 Page 2 of 2





 









 








	PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC) 02-13-06
EQUAL HOUSING ADDENDUM FOR PROPERTY SUBJECT TO
OPPORTUNITY MANDATORY MEMBERSHIP IN AN OWNERS’ ASSOCIATION
(NOT FOR USE WITH CONDOMINIUMS)
ADDENDUM TO CONTRACT CONCERNING THE PROPERTY AT
(Street Address and City)
(Name of Owners’ Association)
A. SUBDIVISON INFORMATION: “Subdivision Information” means: (i) the restrictions applying to the
subdivision, (ii) the bylaws and rules of the Owners’ Association, and (iii) a resale certificate,
all of which were provided by the Owners’ Association in compliance with Section 207.003 of the
Texas Property Code. (Check only one box):
1. Within days after the effective date of the contract, Seller shall at Seller’s expense
deliver the Subdivision Information to Buyer. If Buyer does not receive the Subdivision
Information, Buyer may terminate the contract at any time prior to closing and the earnest money
will be refunded to Buyer. If Seller delivers the Subdivision Information, Buyer may terminate the
contract for any reason within 7 days after Buyer receives the Subdivision Information or prior to
closing, whichever first occurs, and the earnest money will be refunded to Buyer. 2. Buyer has
received and approved the Subdivision Information before signing the contract.
3. Buyer does not require delivery of the Subdivision Information.
If Seller becomes aware of any material changes in the Subdivision Information, Seller shall
immediately give notice to Buyer. Buyer may terminate the contract prior to closing by giving
written notice to Seller if: (i) any of the Subdivision Information provided was not true; or (ii)
any material adverse change in the Subdivision Information occurs prior to closing, and the earnest
money will be refunded to Buyer. B. FEES: Buyer shall pay any Owners’ Association fees resulting
from the transfer of the Property not to exceed $ and Seller shall pay any excess.
NOTICE TO BUYER REGARDING REPAIRS BY THE OWNERS’ ASSOCIATION: The Owners’ Association may have the
sole responsibility to make certain repairs to the Property. If you are concerned about the
condition of any part of the Property which the Owners’ Association is required to repair, you
should not sign the contract unless you are satisfied that the Owners’ Association will make the
desired repairs.
Buyer            Seller
Buyer            Seller
The form of this addendum has been approved by the Texas Real Estate Commission for use only with
similarly approved or promulgated forms of contracts. Such approval relates to this contract form
only. TREC forms are intended for use only by trained real estate licensees. No representation is
made as to the legal validity or adequacy of any provision in any specific transactions. It is not
intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX
78711-2188, 1-800-250-8732 or (512) 459-6544 (http://www.trec.state.tx.us) TREC No. 36-4. This
form replaces TREC No. 36-3.
TREC NO. 36-4






 











 





Modification of Builder Warranty (Model Home)




ADDENDUM TO PURCHASE AGREEMENT




	 	 	 
	Date of Purchase Agreement:
	 	 
	 

	 	 





	 	 	 
	“Buyer(s)”:
	 	 
	 

	 	 





	 	 	 
	“Company”:

	 	 






	 	 	 
	“Builder”:
	 	 
	 

	 	 





	 	 	 
	Community:
	 	 
	 

	 	 





	 	 	 	 	 	 	 
	Lot:

	 	 	 	Block/Section/Phase:	 	 
	 

	 	 
	 	 	 	 





	 	 	 
	Address:
	 	 
	 

	 	 





	 	 	 
	Completion Date of Home (certificate of occupancy):
	 	 
	 

	 	 





	 	 	 
	Estimated Closing Date (see paragraphs 2 and 3, below):
	 	 
	 

	 	 





     This addendum (“Addendum”), when duly executed by the Company and Buyer, will constitute a
part of the above-referenced purchase agreement (the “Purchase Agreement”) between the
above-referenced Buyer(s) and the Company covering the property referenced above (the “Property”).
If any portion of this Addendum conflicts with any portion of the Agreement, the provisions of this
Addendum shall prevail.



1. PROPERTY DESCRIPTION. The description of the Property is as set forth above. The
residence on the Property (the “Home”) is not being constructed specifically for Buyer nor to the
precise specifications or design of any model home displayed by Builder. This Agreement is an
agreement to purchase a completed residence. Neither the Company nor Builder is acting as Buyer’s
contractor.



2. CLOSING. Unless this Agreement is earlier terminated as provided herein, the Company,
either directly or through Builder, shall give Buyer written notice of the date (the “Availability
Date”) on which Builder expects to complete its use of and make available the Home for occupancy by
Buyer. Within twenty (20) calendar days prior to the Availability Date, (a) Buyer shall deposit or
cause to be deposited with the escrow holder or closing agent the balance of the Purchase Price and
all closing costs and fees, including contract coordination fees, to be paid by Buyer and all
documents necessary to close, (b) the Company, shall likewise deliver to the escrow holder or
closing agent all funds and documents necessary to close, including a fully executed and notarized
deed for the conveyance of title to the Property to Buyer. Unless this Agreement is earlier
terminated as provided herein, the closing for Buyer’s acquisition of the Property (“Closing”)
shall occur within three (3) business days after the Availability Date, as such date may be
modified by Builder from time to time as provided below. If, after notice



 









 







and tender of its required performance by the Company, Buyer is not ready to close within the time
set forth herein, Buyer shall be in material default of its obligations under this Agreement.



THE ACTUAL CLOSING DATE MAY VARY FROM THE ESTIMATED CLOSING DATE SET FORTH ABOVE AND ANY OTHER
ESTIMATED CLOSING DATES PROVIDED BY THE COMPANY OR BUILDER TO BUYER, INCLUDING ANY “AVAILABILITY
DATE” IN ANY COMMUNICATION FROM THE COMPANY OR BUILDER TO BUYER. BUYER HEREBY ACCEPTS THE
UNCERTAINTY OF THE DATE ESTIMATED FOR THE CLOSING.



3. BUYER’S RIGHT OF CANCELLATION. As set forth in Paragraph 2, Buyer acknowledges that any
estimated closing date is approximate and subject to the rate of sales and construction at the
community, which rates are extremely difficult to estimate in advance. However, if the Company or
Builder has not given notice to Buyer of an Availability Date not later than                      months
after the Estimated Closing Date set forth above (“Outside Closing Date”), then Buyer shall have
the option, which option Buyer may exercise at any time after the Outside Closing Date and prior to
the closing, of delivering written notice to Builder and the Company of Buyer’s election to
terminate the Agreement and cancel the purchase of the Property, in which event Buyer’s deposits
shall be returned to Buyer, within fifteen (15) calendar days after Builder’s receipt of Buyer’s
written notice of such termination and cancellation and neither the Company nor Builder shall have
any further obligation to Buyer with respect to the Property or under this Agreement.



4. PRIOR USE AS MODEL HOME.




     4.1 Buyer acknowledges that the Home has been and will continue to be used as a model home
and/or sales office by Builder since the date it was completed as described above. As a result,
Buyer accepts that certain items in the Home (including, but not limited to, wall coverings, floor
coverings, window treatments, heating system, air conditioning system, landscaping irrigation
system and similar items) have suffered and will continue to suffer wear and tear in excess of the
wear and tear typically associated with the initial delivery of a new production home.



     4.2 Buyer, with full knowledge of the above, agrees that all items not included in the Limited
Warranty (defined below), including any personal property included in the Property, as currently
installed, shall be accepted by Buyer in their “AS-IS” condition at the closing, subject to the
other provisions of the Agreement.



     4.3 If not completed prior to the complete execution of this Agreement, a concrete driveway
will be completed by or for Buyer, at no cost to Buyer, in the location between the garage and the
street prior to the closing.



     4.4 If the Home contains a sales office located in the garage, local building codes typically
require that the overhead garage door(s) be installed prior to occupancy by Buyer. If local
building codes permit, any carpeting and permanent storage room will remain in the garage for the
Buyer; however, Builder has advised the Company that it is



 









 







Builder’s experience that garage storage areas are typically required to be altered or
eliminated. This will be determined by Builder in conjunction with the applicable jurisdiction.
Buyer also acknowledges that certain hardscape items must be removed in conjunction with the
conversion of the model home/sales office to a residence. By way of example only, trellises built
over the sales office entrance must be removed prior to the installation of the overhead garage
door and the trap fence and trap walk will be removed and replaced with plant material.

Builder has advised the Company that other hardscape material may be required to be removed
depending on the requirements of the applicable jurisdiction. The Company shall not be obligated
to cause Builder to, and Builder does not, guaranty in any way any special pools, spas, fountains
(and related equipment), built-in walls, patios, barbecues and other landscape plan items which do
remain with the Home at closing. These items will be sold in their “AS-IS” condition and may not
have all equipment with respect to their full operation. By way of example only, spas may not have
heaters or other equipment normally associated with a working spa. Neither the Company nor Builder
have any responsibility to provide such additional equipment to Buyer. Only the equipment in such
items as of the date of this Agreement shall be included.



     4.5 The Company has contracted with Builder to remove from the Property all signs, flag poles,
model complex enclosure fences, boxed plantings, front yard light fixtures and other items
identifying the model home site and other matters in connection with the sale of homes in the
community in which the Property is located; and to fill the holes created by the removal of such
items from the ground or patio at Builder’s expense.



5. WARRANTY.  Buyer acknowledges that the home constructed on the Property (the “Home”) is
covered by the KB HOME Limited Warranty Agreement (a form of which has been provided to Buyer)
issued by Builder, as such limited warranty is amended and supplemented by this paragraph (the
“Limited Warranty”). The “Limited Warranty Commencement Date” as set forth in the Limited Warranty
shall be the closing date for Buyer’s purchase of the Property.



     5.1 Buyer acknowledges that s/he is satisfied, independent of any representations by the
Company, Builder or any broker, that the Home is presently (i) free from any defect resulting in or
causing tangible damage to the roof, walls or foundation which materially diminishes the structural
integrity and the load-bearing performance of the Home, and (ii) that the Major Components of the
Home (as defined in the Limited Warranty) are “free from defects and workmanship” as referenced by
the Limited Warranty. Accordingly, Buyer agrees that Builder’s responsibility under the Limited
Warranty shall be limited to covered damage or malfunctions caused by conditions which arise after
the date in which title to the Home is transferred from the Company to Buyer.



     5.2 Buyer further acknowledges that the term “Major Components” of the Home, as used in the
Limited Warranty, shall refer only to the plumbing, electrical, heating and cooling systems of the
Home, including wiring, pipes, vents and ducts (except for the furnace, air conditioning condenser
and water heater, which are “Appliances”). As a result of this Addendum, the additional items
listed as Major



 









 







Components under Section B(2) of the Limited Warranty shall not be deemed Major Components for
the purposes of the Limited Warranty. Instead, the cabinets, doors, driveways, exterior painting,
fireplace, floor coverings, roof installation, shelves, tract boundary walls and windows shall be
treated as “Appliances” for the purposes of the Limited Warranty and shall be warranted to be free
from defects in materials and workmanship for a period of one year beginning with the Limited
Warranty Commencement Date.



     5.3 Buyer further acknowledges that the Limited Warranty (as hereby amended) is intended to
apply to defects in the systems and components in the Home and not to the aging and wear and tear
of such components and systems. Buyer understands that (i) construction of the Home was completed
on or prior to the Limited Warranty Commencement Date, (ii) the Home has been used for model Home
and/or sales office purposes continually since that time, and (iii) the covered components and
systems have deteriorated since the construction date and are not in new condition. Accordingly,
in interpreting the Limited Warranty for the purposes of coverage, the term “defect” shall not be
construed to include damage or deterioration caused by age and/or wear or tear.



Except as changed by this paragraph, the Limited Warranty shall remain in full force and effect as
drafted.



THE LIMITED WARRANTY IS THE ONLY WARRANTY GIVEN CONNECTION WITH THE PURCHASE OF THE PROPERTY. TO
THE FULLEST EXTENT PERMITTED BY LAW, ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY, HABITABILITY, USE, WORKMANSHIP AND FITNESS FOR A PARTICULAR PURPOSE,
ARE DISCLAIMED EXCLUDED AND WAIVED.



6. FINAL VERIFICATION OF CONDITION. Buyer acknowledges that certain landscape and/or
hardscape items may be required to be altered by or for Builder prior to the closing in order to
complete the renovation of the Home in compliance with local building codes pursuant to Paragraph
4. The exterior landscaping of the Home will be maintained by or for the Company until the closing
date; however, no new plant material will be added by the Company or Builder nor will any dead or
damaged plant material be replaced by the Company or Builder after the closing date.



7. FIXTURES AND PERSONAL PROPERTY. No personal property is included in the sale except for
personal property which is specifically identified on a supplement or addendum to this contract
signed by Buyer and the Company. Personal property includes, without limitation, the following
types of property, if and to the extent that they are located on the Property: music systems,
security systems, interior and exterior potted plants, pictures, artwork, linens, non built-in
appliances (including, without limitation, televisions, refrigerators, and clothes washers and
dryers), interior and exterior furniture (including, without limitation, patio furniture, office
furniture and equipment or office fixtures, cabinetry, shelving and lighting not attached to the
walls or ceiling) and any other item labeled or otherwise identified as a “Decorator Item” in the
Property which is not a fixture. All items of personal property which are not specifically
included in the



 









 







sale, as agreed by Buyer and the Company, in writing, shall be removed by or for the Company prior
to the closing, without cost to Buyer but also without reimbursement to Buyer. If any personal
property which is not specifically identified, in writing, as being included in the Property (and,
therefore, is not included in Buyer’s purchase of the Property) remains on the Property at the
closing, Buyer shall be entitled to keep such personal property but such personal property is
conveyed as part of the Property, but without warranty or representation as to fitness for any
purpose. Personal property, if any, included in the sale and any other personal property remaining
on the Property at the closing are being transferred in their “AS IS” “WHERE IS” condition and are
not warranted in any way.



8. MEDIATION AND ARBITRATION. In the event of any dispute related to the Property or this
Agreement, the parties shall first mediate their dispute with a third party mediator to be selected
by the parties. The costs of mediation will be shared equally between the parties. In the event
the dispute is not settled at mediation, then this Agreement shall be subject to arbitration under
the Federal Arbitration Act. Subject to the provisions set forth below, all claims, demands,
disputes, controversies and differences that may arise between the parties to this Agreement
(including the officers, agents and employees of each party) of whatever nature or kind, including,
without limitation, disputes: 1) as to events, representations or omissions, which predate this
Agreement; 2) arising out of this Agreement; and/or 3) relative to the construction contemplated by
this Agreement with respect to events occurring prior to the Closing, shall each be submitted to
binding arbitration and such arbitration shall be governed by the provisions of the Federal
Arbitration Act 9, U.S.C. Section 1 et seq. Either party may, within one (1) year after an
arbitration award, apply to the U.S. District Court having jurisdiction over the county in which
the Property is located to confirm the award. The forwarding of a written demand for arbitration
shall toll the running of any applicable statute of limitations for the matter to be arbitrated.
This Agreement to arbitrate shall survive Closing, and shall survive cancellation of this
Agreement. Arbitration shall be conducted through the American Arbitration Association offices
nearest to where the Property is located. The costs of arbitration will be shared equally between
the parties.



The provisions of this Section 8 shall not apply to any repairs or warranty claims with respect to
the Home arising after construction is completed and the Closing has occurred hereunder and shall
expressly NOT control over the dispute resolution provisions in the Warranty for such repairs or
warranty claims. Notwithstanding anything to the contrary in this Agreement or any other agreement
entered into by Buyer or the Company or any other documentation with respect to the Property,
including, without limitation, any of the Covenants, any such repairs or warranty claims shall be
governed by the warranty coverage disputes provisions of the Warranty and applicable State and
Federal law.



WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS
INCLUDED IN THE “ARBITRATION (OF DISPUTES” PROVISION TO NEUTRAL ARBITRATION.



 









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	INITIALS:

	 	 	 	 
	 	INITIALS:
	 	 	 	 
	 	INITIALS:
	 	 	 	 
	 	INITIALS:	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	(Buyer)
	 	 	 	 	 	(Buyer)
	 	 	 	 	 	(the Company’s Agent)
	 	 	 	 	 	(the Company)






9. ENTRY UPON PROPERTY PRIOR TO DELIVERY OF POSSESSION. Except as set forth in this
Paragraph, Buyer shall not be permitted to enter, occupy or take possession of the Property, or
make any alterations of or additions to the Property, prior to delivery of possession. Buyer may
arrange to visit the Property prior to the closing, subject to the Company prior written approval,
and provided that the Company shall have the right to designate an authorized representative to
accompany Buyer on such visit. Buyer acknowledges that the Property is situated within a
construction site and the safety and welfare of persons entering the construction site cannot be
assured. BUYER HEREBY ASSUMES ALL LIABILITY AND RESPONSIBILITY FOR ALL INJURIES AND DAMAGES WHICH
ARISE OUT OF OR RESULT FROM BUYER’S BREACH OF THE PROVISIONS OF THIS PARAGRAPH.



10. NO FURTHER MODIFICATIONS. Except as specifically amended herein, the Purchase
Agreement remains unmodified and in full force and effect.



THIRD PARTY BENEFICIARY. As against Buyer, Builder shall be a third party beneficiary of
the rights in favor of the Company and Builder hereunder. Nothing provided for in this agreement
shall create any additional obligation between the Company and Builder.



	 	 	 	 	 	 	 	 	 
	APPROVED AND AGREED TO:	 	 	 	“The Company”
	 
	 	 	 	 	 	 	 	 
	Buyer
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Buyer
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Buyer
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





 









 





Sales Contract Addendum for the Benefit of



                                         (“Company”)





     This Sales Contract Addendum (the “Addendum”) is attached to that certain sales
contract (the “Contract”) dated                     by and between the Company, as Seller, and
                     as Buyer, as to the property more particularly described therein
and is executed for the benefit of the Company.                      (“Builder”), a
company totally unrelated to the Company. Builder is in possession of the property under a
lease agreement with the Company. Although the Company holds record title to the
property, under the lease agreement, Builder is the authorized agent of Seller to solicit
offers for the property. The Company will convey title pursuant to a special warranty
deed in accordance with the sale contract, but the remaining terms of the sale contract
are the obligations of Builder. Other than the limited warranty as to title under the
deed to be given under the contract, NO WARRANTY OF ANY TYPE OR KIND SHALL BE PROVIDED
BY THE COMPANY AND ALL WARRANTIES AS TO THE CONDITION OF THE PROPERTY OR OTHERWISE,
EXPRESSED OR IMPLIED, ARE HEREBY DISCLAIMED. Buyers hereby release and hold harmless the
Company, and all its affiliates, from and against any and all actions, suits, claims,
damages, costs, expenses and any other liability including attorneys’fees on account of,
or in any manner growing out or as a result of the presence of defects in material or
workmanship in or on any part of the property, irrespective of when or how it is
identified. Buyer acknowledges that any and all warranties, remedies, or indemnification
obligations, whether pursuant to the Contract or applicable law, if any, are the
obligation of Builder, and not the Company. This addendum shall survive the closing
of this transaction and recording of the deed. Builder will provide its limited warranty
at or prior to closing in accordance with the Contract.




     This Addendum modifies the Contract and all addendums or supplements thereto and
shall supersede all other terms and conditions of the Contract and all addendums and
supplements to the Contract. In the event of any ambiguity or inconsistency between the
terms of this Addendum and the terms of the Contract, the terms of this Addendum shall
control.




     Buyer is also advised that any claims brought by Buyer against either the Company or
Builder in connection with the sales contract to which this Addendum is attached shall be
subject to the arbitration provisions contained in the original deed from Builder to the
Company.




     Caution: Except as to title, this fully releases and limits your rights against the
Company. You should not execute this addendum unless you fully understand it and if you
do not            understand it you should seek further advice possibly including the advice of a
lawyer.




     Dated this       day of                     , 200      .



     BUYERS:



 

                                             



 

                                             



 









 




Return to:



Name:

Address:



This Instrument Prepared by:



as a necessary incident to the fulfillment of conditions

contained in a title insurance commitment issued by it.



Property Appraisers Parcel I.D. (Folio) Number(s):



Grantee(s) S.S.#(s):

File No.:




SPECIAL WARRANTY DEED

(CORPORATE)




This Special Warranty Deed Made the                     by                    , a Delaware
limited liability company, as successor by statutory conversion to
                     a corporation existing under the laws of Delaware, and having
its place of business at                     ,                     ,
                                         hereinafter called the grantor,



to                      whose post office address is:                     
                     hereinafter called the grantee,



WITNESSETH: That grantor, for and in consideration of the sum of $     dollars
and other valuable considerations, receipt whereof is hereby acknowledged, by
these presents does grant, bargain, sell, alien, remise, release, convey and
confirm unto grantee, all that certain land situate in                     .



TOGETHER with all the tenements, hereditaments and appurtenances thereto
belonging or in anywise appertaining.



To Have and to Hold, the same in fee simple forever.



GRANTOR’S WILL WARRANT and forever defend the right and title to the
above-described real property unto the Grantees against the claims of all
person, claiming by, through or under Grantor’s, but not otherwise.



 









 





(Wherever used herein the terms “grantor” and “grantee” included all the parties
to this instrument, and the heirs, legal representatives and assigns of
individuals, and the successors and assigns of corporation.)



IN WITNESS WHEREOF, the grantor has caused these presents to be executed in its
name, and its corporate seal to be hereunto affixed, by its proper officers
thereunto duly authorized, the day and year first above written.



Signed, sealed and delivered in our presence:




                         , a Delaware limited liability
company, as successor by statutory conversion to
                     a                     



	 	 	 	 	 	 	 	 	 
	Witness Signature:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Witness Signature:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 





STATE OF

COUNTY OF




The foregoing instrument was acknowledged before me this       day of                     ,
20      by                      as                      of      , a Delaware
limited liability company, as successor by statutory conversion to      , a
Virginia corporation, on behalf of the corporation. He/she is personally known
to me or who has produced driver license(s) as identification.



	 	 	 	 	 	 	 	 	 
	My Commission Expires:

	 	 	 	 
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	Notary Public	 	 
	 

	 	 	 	 	 	Serial Number