Document:

exv10w7

Exhibit 10.7

 

 

PURCHASE AGREEMENT

among

RESIDENTIAL CAPITAL, LLC,

GMAC MODEL HOME FINANCE I, LLC,

and

CMH HOLDINGS LLC

Dated as of June 6, 2008

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS AND TERMS	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Certain Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.2
	 	Other Terms	 	 	4	 
	 
	 	 	 	 	 	 
	Section 1.3
	 	Other Definitional Provisions	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE II PURCHASE AND SALE OF INTERESTS	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Sale of Interests	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.2
	 	Excluded Assets	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.3
	 	Retained Liabilities	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.4
	 	Other Conveyances	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.5
	 	Purchase Price	 	 	6	 
	 
	 	 	 	 	 	 
	Section 2.6
	 	Obligation to Deliver Additional Proceeds to NewCo	 	 	6	 
	 
	 	 	 	 	 	 
	Section 2.7
	 	Closing	 	 	6	 
	 
	 	 	 	 	 	 
	Section 2.8
	 	Deliveries by ResCap and its Affiliates	 	 	6	 
	 
	 	 	 	 	 	 
	Section 2.9
	 	Deliveries by NewCo	 	 	7	 
	 
	 	 	 	 	 	 
	Section 2.10
	 	Determination of Final Aggregate NBV and Final Additional Proceeds	 	 	7	 
	 
	 	 	 	 	 	 
	Section 2.11
	 	Allocation of Purchase Price	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES	 	 	8	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Representations and Warranties of ResCap and Seller	 	 	8	 
	 
	 	 	 	 	 	 
	Section 3.2
	 	Representations and Warranties of NewCo	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE IV COVENANTS	 	 	12	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Commercially Reasonable Efforts	 	 	12	 
	 
	 	 	 	 	 	 
	Section 4.2
	 	The Separation	 	 	13	 
	 
	 	 	 	 	 	 
	Section 4.3
	 	Further Assurances	 	 	14	 
	 
	 	 	 	 	 	 
	Section 4.4
	 	Tax Matters	 	 	15	 

-i-

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ARTICLE V CONDITIONS TO CLOSING	 	 	16	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Conditions to the Obligations of each of the Parties	 	 	16	 
	 
	 	 	 	 	 	 
	Section 5.2
	 	Conditions to the Obligations of ResCap and Seller	 	 	16	 
	 
	 	 	 	 	 	 
	Section 5.3
	 	Conditions to the Obligations of NewCo	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE VI TERMINATION	 	 	17	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Termination	 	 	17	 
	 
	 	 	 	 	 	 
	Section 6.2
	 	Effect of Termination	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE VII MISCELLANEOUS	 	 	18	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Notices	 	 	18	 
	 
	 	 	 	 	 	 
	Section 7.2
	 	Amendment; Waiver	 	 	19	 
	 
	 	 	 	 	 	 
	Section 7.3
	 	No Assignment or Benefit to Third Parties	 	 	19	 
	 
	 	 	 	 	 	 
	Section 7.4
	 	Entire Agreement	 	 	19	 
	 
	 	 	 	 	 	 
	Section 7.5
	 	Fulfillment of Obligations	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.6
	 	Expenses	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.7
	 	Governing Law; Submission to
Jurisdiction; Selection of Forum; Waiver of Trial by Jury	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.8
	 	Counterparts	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.9
	 	Headings	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.10
	 	Severability	 	 	20	 
	 
	 	 	 	 	 	 
	Section 7.11
	 	Survival of Representations, Warranties and Covenants	 	 	21	 
	 
	 	 	 	 	 	 
	Section 7.12
	 	Commitment Regarding Actions of Controlled Affiliates	 	 	21	 
	 
	 	 	 	 	 	 
	Section 7.13
	 	Specific Performance	 	 	21	 

EXHIBITS

	 	 	 
	EXHIBITS	 	 
	 
	 	 
	Exhibit A

	 	List of Transferred Assets
	 
	 	 
	Exhibit B

	 	Estimated NBV Schedule
	 
	 	 
	Exhibit C

	 	List of Specified Excluded Assets
	 
	 	 
	Exhibit D

	 	Servicing Agreement Term Sheet
	 
	 	 
	Exhibit E

	 	Form of Mutual Release

-ii-

 

PURCHASE AGREEMENT

     This PURCHASE AGREEMENT is dated as of June 6, 2008, among Residential Capital, LLC, a
Delaware limited liability company (“ResCap”), GMAC Model Home Finance I, LLC, a Delaware
limited liability company and indirect wholly-owned subsidiary of ResCap (“Seller”), and
CMH Holdings LLC, a Delaware limited liability company (“NewCo”). Each of ResCap, Seller
and NewCo are referred to herein as a “Party” and, collectively, as the “Parties”.

RECITALS:

     WHEREAS, Seller, through GMAC Model Home Finance, LLC, a Delaware limited liability company
and direct wholly-owned subsidiary of Seller (the “Direct Subsidiary”), and LENOne, LLC,
GMCMTH, LLC and KBOne, LLC, each a wholly-owned direct or indirect subsidiary of the Direct
Subsidiary (each an “Indirect Subsidiary” and, collectively, the “Indirect Subsidiaries”
and together with the Direct Subsidiary, the “Subsidiaries”), owns assets (collectively,
the “Subsidiary Group Assets”), including model homes, option lots, REO (as hereinafter
defined), and lending receivables;

     WHEREAS, Seller desires to sell, and NewCo desires to purchase, a portion of the Subsidiary
Group Assets (other than the Excluded Assets), through a sale and purchase of all of the membership
interests of the Direct Subsidiary (the “Interests”), which owns and, as of the Closing,
will own all of the outstanding membership interests of the Indirect Subsidiaries, on the
applicable terms and subject to the conditions set forth herein;

     WHEREAS, the Parties agree that (i) the portion of Subsidiary Group Assets that are intended
to constitute Transferred Assets are those assets identified on Exhibit A hereto, (ii) to
the extent such assets have an aggregate net book value as recorded on the records of ResCap in
excess of $479,172,068 as of the Cut-Off Date, the excess assets shall be deemed to be Excluded
Assets for all purposes under this Agreement and shall be retained by Seller, and (iii) as further
provided in Section 4.2 of this Agreement, the Parties shall take all actions necessary after the
Closing to effect such retention of Excluded Assets by Seller;

     WHEREAS, concurrently with the execution of this Agreement, NewCo and Cerberus Partners, L.P.
have entered into a loan agreement, dated as of the date hereof (the “Loan Agreement” and,
together with the promissory notes and security agreement referenced in the Loan Agreement, the
“Loan Documentation”), pursuant to which, at Closing, NewCo intends to borrow an amount in
cash not less than the Cash Purchase Price, on the applicable terms and subject to the conditions
set forth therein;

     WHEREAS, concurrently with the execution of this Agreement, Seller, the Investor and NewCo
have entered into an amended and restated limited liability company agreement, effective as of the
Closing (the “LLC Agreement”), concerning the management, ownership and operation of NewCo,
the rights and obligations of the Members in respect of the Units and specifying certain actions to
be taken by the managing member of NewCo with respect to the Transferred Assets; and

     WHEREAS, as further detailed in Section 4.2(d) of this Agreement, from and after the Closing,
ResCap shall, or shall cause one of its controlled Affiliates to, provide NewCo and the

 

 

Subsidiaries with the services identified on Exhibit D hereto (the “Servicing
Agreement Term Sheet”).

     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” means the aggregate amount of proceeds or other payments
received by ResCap or any of its Affiliates in respect of the Transferred Assets with respect to
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, but solely to the extent actually paid to NewCo in accordance with
Section 2.6 of this Agreement.

     “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.

     “Aggregate NBV” means the aggregate net book value of the Transferred Assets as
recorded on the books of ResCap as of the Cut-Off Date, after giving effect to the exclusion of the
Retained Liabilities.

     “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 NewCo to effect the sale
and transfer of the Interests to NewCo 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.

     “Class A Senior Preferred Units ” has the meaning set forth in the LLC Agreement.

     “Class B Junior Preferred Units ” has the meaning set forth in the LLC Agreement.

-2-

 

     “Common Units ” has the meaning set forth in the LLC Agreement.

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

     “Cut-Off Date” means May 31, 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.

     “Excluded Assets” means the assets (other than the Transferred Assets and the
membership interests in the Indirect Subsidiaries) of each of the Subsidiaries, including the
Specified Excluded Assets set forth on Exhibit C hereto, subject to adjustment pursuant to
Sections 2.10(c) and (d).

     “Excluded Employees” means, collectively, all individuals who prior to the Closing are
actively employed (whether full- or part-time) by any of the Subsidiaries or any such individual
who is on short-term disability leave, authorized leave of absence, military service or lay-off
with recall rights and all individuals who prior to the Closing are engaged as independent
contractors by any of the Subsidiaries.

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

     “Indirect Interests” means all of the outstanding membership interests in the Indirect
Subsidiaries.

     “Investor” means Cerberus ResCap Assets Investors LLC.

     “Investor Homes” means those model homes owned by investors and set forth on Section
1.1 of the ResCap Disclosure Letter.

     “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.

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

-3-

 

     “REO” means any real estate owned by one of the Subsidiaries which is not subject to
any lease agreement with a builder or other third party.

     “ResCap Disclosure Letter” means the Disclosure Letter delivered by ResCap to NewCo
prior to the execution and delivery of this Agreement.

     “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, (i) this Agreement, (ii) the LLC
Agreement, (iii) the Loan Documentation, (iv) the Mutual Release and (v) the Ancillary Transfer
Documents.

     “Transferred Assets” means those assets set forth on Exhibit A hereto, subject
to adjustment pursuant to Sections 2.10(c) and 2.10(d) of this Agreement and Section 4.2(a) of the
ResCap Disclosure Letter.

     “Units” means, collectively, the Class A Senior Preferred Units, the Class B Junior
Preferred Units and Common Units.

     Section 1.2 Other Terms. Other terms may be defined elsewhere in the text of this
Agreement and, unless otherwise indicated, shall have such meaning throughout this Agreement.

     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;

-4-

 

          (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 NewCo, and NewCo
shall purchase from Seller, all of the right, title and interest of Seller in and to the Interests
(the “Interests Sale”).

     Section 2.2 Excluded Assets. From and after the Closing, notwithstanding anything to
the contrary in this Agreement, Seller shall retain all right, title and interest (legal or
beneficial) to (including tax ownership in respect of) the Excluded Assets.

     Section 2.3 Retained Liabilities. From and after the Closing, ResCap and Seller shall
retain, perform and discharge when due all Liabilities that exist, or arise out of (i) the
ownership of the Interests, Indirect Interests or any of the Transferred Assets or the operation of
the businesses or assets of any of the Subsidiaries prior to or as of the Closing (other than
obligations incurred in the ordinary course of business consistent with past practice pursuant to
brokerage or commission agreements to pay broker fees or commissions resulting from (x) the sale of
any assets prior to Closing the proceeds from which sales are delivered to NewCo at Closing
pursuant to Section 4.2(f) or (y) the sale of any Transferred Asset after the Closing Date), (ii)
any Excluded Asset, (iii) any Excluded Employee or (iv) any of the matters specified in Section 2.3
of the ResCap Disclosure Letter (collectively, the “Retained Liabilities”).
Notwithstanding anything to the contrary herein, neither NewCo nor any of the Subsidiaries shall
assume or have any responsibility of any nature with respect to any Retained Liabilities.

     Section 2.4 Other Conveyances. Notwithstanding anything to the contrary in this
Agreement:

          (a) If it is determined before, at or after the Closing that any Affiliate of ResCap (other
than a Subsidiary) owns or possesses any of the Indirect Interests or Transferred Assets, then
ResCap shall promptly cause such Affiliate to transfer, assign, convey and deliver to the
applicable Subsidiary such Indirect Interests or Transferred Assets in accordance with the terms of
this Agreement; provided, that NewCo shall not be obligated to pay any amounts to any such
Affiliate of ResCap in consideration for the transfer of such Indirect Interests or Transferred
Assets.

          (b) If it is determined at or after the Closing that as of the Closing any Subsidiary owned or
possessed any of the Excluded Assets, then NewCo shall and shall cause Subsidiary to promptly
transfer, assign, convey and deliver such Excluded Assets to Seller or any other controlled
Affiliate of ResCap designated by ResCap in accordance with the terms of this Agreement;
provided, that ResCap shall not be obligated to pay any amounts to NewCo or such Subsidiary
in consideration for the transfer of such Excluded Assets.

-5-

 

     Section 2.5 Purchase Price. The aggregate consideration to be paid at the Closing to
Seller for the sale of the Interests shall equal (i) $230,000,000 (the “Cash Purchase
Price”) and (ii) the Class B Junior Preferred Units (collectively, the “Purchase
Price”).

     Section 2.6 Obligation to Deliver Additional Proceeds to NewCo. If at any time after
11:59 p.m. (New York City Time, respectively) on the Cut-Off Date, ResCap or any of its Affiliates
receives proceeds or other payments with respect to any Transferred Asset, ResCap shall, and shall
cause its Affiliates to, (i) accept and hold such proceeds and payments in trust for the account
and sole benefit of NewCo (subject to the Closing) and have no equitable or beneficial interest in
any such proceeds or payments (except to the extent this Agreement is terminated prior to Closing
in accordance with its terms) and (ii) deliver such proceeds and payments (free of any withholding,
setoff, recoupment or deduction of any kind except as required by applicable Law) promptly (but in
any event no later than three Business Days after the date on which such Person receives such
proceeds or payments, except in the case of proceeds and payments received prior to the Business
Day immediately preceding the Closing Date, which shall be delivered at the Closing) to NewCo, when
necessary or appropriate, with NewCo’s endorsement (without recourse, representation or warranty).

     Section 2.7 Closing Subject to the terms and conditions of this Agreement, the
consummation of the Interests Sale and the other transactions contemplated hereby (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 June 9, 2008, 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 2.8 Deliveries by ResCap and its Affiliates. At the Closing:

          (a) ResCap shall cause Seller to execute and deliver counterparts to those Ancillary Transfer
Documents required to be executed and delivered by Seller to effect the sale and transfer of the
Interests to NewCo pursuant to this Agreement;

          (b) ResCap shall deliver the certificate required to be delivered pursuant to Section 5.3(e);

          (c) ResCap shall deliver a release in the form annexed hereto as Exhibit E (the
“Mutual Release”), duly executed by ResCap, on behalf of itself and each of its controlled
Affiliates (other than the Subsidiaries), on the one hand, and the Direct Subsidiary, on behalf of
itself and each of the Indirect Subsidiaries, on the other hand;

          (d) ResCap shall caused to be delivered 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 each of the Subsidiaries;

          (e) ResCap shall deliver, or cause to be delivered, to NewCo all proceeds and payments in
respect of Transferred Assets required to be delivered to NewCo pursuant to Section 2.6; and

-6-

 

          (f) ResCap shall deliver such other documents and instruments as may be reasonably required to
consummate the transactions contemplated by this Agreement.

     Section 2.9 Deliveries by NewCo. At the Closing:

          (a) NewCo shall (i) deliver the Cash Purchase Price to Seller in immediately available funds
by wire transfer to an account or accounts that have been designated by ResCap prior to the Closing
Date and (ii) issue the Class B Junior Preferred Units to Seller;

          (b) NewCo shall execute and deliver counterparts to those Ancillary Transfer Documents
required to be executed and delivered by NewCo to effect the sale and transfer of the Interests
pursuant to this Agreement;

          (c) NewCo shall deliver the certificate required to be delivered pursuant to Section 5.2(c);
and

          (d) NewCo shall deliver such other documents and instruments as may be reasonably required to
consummate the transactions contemplated by this Agreement.

     Section 2.10 Determination of Final Aggregate NBV and Final Additional Proceeds.

          (a) Set forth on Exhibit B is an estimate prepared by ResCap of the Aggregate NBV (the
“Estimated NBV Schedule”).

          (b) By no later than 30 days after the Closing Date, ResCap shall deliver to NewCo a written
statement (the “Post-Closing Statement”) setting forth the calculation of (i) Aggregate NBV
and (ii) Additional Proceeds, together with (x) the material documentation supporting such
calculations and (y) a certificate, executed by a duly authorized officer of ResCap, to the effect
that such calculations were made in good faith and are consistent with the books and records of
ResCap and Seller. ResCap agrees to make available to NewCo, at NewCo’s request, all books and
records reasonably requested by NewCo to verify such calculations. The term “Final Aggregate
NBV” means the Aggregate NBV as set forth in the Post-Closing Statement, subject to adjustment
as provided in subsection (c) below. The term “Final Additional Proceeds” means the
Additional Proceeds as set forth in the Post-Closing Statement.

          (c) To the extent Final Aggregate NBV exceeds $479,172,068 (such excess amount, the
“Excess NBV”), then (i) with respect to those assets used in the calculation of Transferred
Assets that represent the Excess NBV (the “Excess Assets”), the term “Excluded Assets”
shall be deemed to include such Excess Assets, (ii) all of the right, title and interest of the
applicable Subsidiary in and to such Excess Assets shall be transferred to Seller pursuant to
Section 4.2(a) and (iii) the term “Final Aggregate NBV” shall mean the Aggregate NBV as set forth
in the Post-Closing Statement less the aggregate net book value of the Excess Assets as
recorded on the books of ResCap as of the Cut-Off Date. The Parties shall, within 30 days after the
delivery of the Post-Closing Statement, reach mutual agreement as to which Transferred Assets shall
constitute Excess Assets pursuant to this Section 2.10(c) or, to the extent the Parties are unable
to reach mutual agreement by the end of such 30-day period, NewCo shall pay to Seller an amount in
cash equal to the product of (i) the Excess NBV and (ii) 0.4799946.

-7-

 

          (d) To the extent Final Aggregate NBV is less than $479,172,068 (such excess amount, the
“Shortfall NBV”), then (i) the Parties shall, within 30 days after the delivery of the
Post-Closing Statement, reach mutual agreement as to which additional assets of ResCap and its
controlled Affiliates shall be included as “Transferred Assets” to result in the Aggregate NBV
(taking into account such additional assets) equaling $479,172,068, (ii) such additional assets
shall be deemed to be “Transferred Assets” and ResCap shall, or shall cause its controlled
Affiliate to, sell, convey, transfer, assign and deliver to NewCo or the Subsidiary designated by
NewCo, all of the right, title and interest of Seller in and to such additional assets and (iii)
the term “Final Aggregate NBV” shall mean the Aggregate NBV as set forth in the Post-Closing
Statement plus the aggregate net book value of such additional assets as recorded on the
books of ResCap as of the Cut-Off Date.

     Section 2.11 Allocation of Purchase Price. A proposed allocation of the Purchase
Price among the Interests and Indirect Interests (an
“Allocation”) shall be set forth on a
schedule to be prepared by NewCo and delivered to ResCap within 90 days following the Closing Date.
ResCap shall have a period of thirty 30 days after receipt of the proposed Allocation (the
“Review Period”) to review it. If ResCap does not object to the proposed Allocation in
writing during the Review Period, the Allocation prepared by NewCo shall be the final Allocation
for the Purchase Price. If ResCap provides written notice to NewCo within the Review Period that
ResCap disputes the proposed Allocation, NewCo and ResCap shall attempt to reach a mutually
acceptable agreement regarding the appropriate Allocation during the thirty-day 30-day period
beginning on the date that NewCo receives the notice from ResCap (the
“Negotiation
Period”). If NewCo and ResCap are able to reach a mutually acceptable agreement within the
Negotiation Period, such agreement shall be the final Allocation of the Purchase Price. NewCo and
Seller, or their respective Affiliates as applicable, shall file all Tax Returns for which they are
responsible consistent with the final Allocation and shall take no position before any taxing
authority inconsistent with such Allocation except (x) to the extent agreed to in writing by NewCo
and ResCap, (y) by subsequent agreement with the Internal Revenue Service following an audit by the
Internal Revenue Service or (z) by a court decision. Notwithstanding the foregoing, in the event
that ResCap provides written notice to NewCo during the Review Period that it disputes the proposed
Allocation and the Parties are unable to reach a mutually acceptable agreement regarding the
appropriate Allocation within the Negotiation Period, the Parties shall submit the proposed
Allocation to an accounting firm of national standing that is reasonably acceptable to ResCap and
NewCo (the “Independent Auditor”) for review at the shared (50/50) expense of the parties.
The determination of the Independent Auditor shall be the final allocation under this Section 2.11.
ResCap shall act (and shall be deemed to have acted) on behalf of Seller pursuant to this Section
2.11.

ARTICLE III

REPRESENTATIONS AND WARRANTIES 

     Section 3.1 Representations and Warranties of ResCap and Seller. ResCap represents and
warrants, on behalf of itself and Seller, to NewCo as of the date hereof and as of the Closing Date
that, except as set forth in the applicable sections of the ResCap Disclosure Letter:

-8-

 

          (a) Due Organization. Each of ResCap, Seller and the Subsidiaries is duly formed,
validly existing and in good standing under the laws of its jurisdiction of formation. ResCap 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. Seller has all requisite limited liability company power and authority to enter into the
Mutual Release and each Ancillary Transfer Document and to carry out its obligations thereunder and
to consummate the transactions contemplated thereby. Other than with respect to the Excluded
Assets, each of the Subsidiaries 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 ResCap. This
Agreement has been duly executed and delivered by ResCap. This Agreement, assuming the due
authorization, execution and delivery by NewCo, constitutes a legally binding obligation of ResCap,
enforceable against ResCap 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, (i) the execution and delivery of the Mutual Release, and each
of the Ancillary Transfer Documents, 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 action on the part of Seller, (ii) the Mutual Release and each
of the Ancillary Transfer Documents shall have been duly executed and delivered by Seller and (iii)
the Mutual Release and each Ancillary Transfer Document, assuming the due authorization, execution
and delivery by NewCo, shall constitute a legally binding obligation of 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. Except for the consents listed in Section 3.1(c) of the
ResCap Disclosure Letter, no consent, approval, waiver, authorization, notice or filing is required
to be obtained from or made with (i) any Governmental Entity or self-regulatory organization or
(ii) any other Person, in each case, by ResCap or any of its controlled Affiliates in connection
with the execution, delivery and performance of any Transaction Document.

          (d) Non-Contravention. The execution, delivery and performance of this Agreement by
ResCap and by ResCap and each of its controlled Affiliates of the other Transaction Documents to
which it is a party, 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) subject to receipt of the consents listed in Section 3.1(c) of the ResCap Disclosure
Letter, 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 under, or result in a loss of any material benefit to which such party is entitled
under, any material Contract, or result in the creation of any

-9-

 

Encumbrance upon any of the Interests, Indirect Interests or the Transferred Assets, or (iii)
subject to receipt of the consents listed in Section 3.1(c) of the ResCap Disclosure Letter,
violate or result in a breach of or constitute a default under any Law to which ResCap or any of
its controlled Affiliates is subject.

          (e) Transferred Assets; Interests and Indirect Interests; Excluded Assets; Excluded
Employees.

          (i) Seller has full right to sell, assign and transfer all of its right, title and
interest in the Interests to NewCo, subject to receipt of the consents listed in Section
3.1(c) of the ResCap Disclosure Letter. 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 Interest to NewCo, free and clear of any Encumbrances of
any kind, and, except for those Ancillary Transfer Documents executed and delivered to NewCo
by Seller at Closing, no novations or assignments shall be necessary to vest NewCo 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 the
Direct Subsidiary. All of the outstanding membership interests of the Indirect Subsidiaries
are owned by a Subsidiary. Each Subsidiary that owns Indirect Interests is the owner of such
Indirect 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). One of the
Subsidiaries is the owner of each Transferred Asset, free and clear of any Encumbrances of
any nature whatsoever (except for any such Encumbrances being released prior to or effective
upon the Closing). None of the Transferred Assets have been sold, transferred, conveyed or
otherwise disposed of since the Cut-Off Date, except in accordance with Section 4.2(f) of
this Agreement.

          (ii) The sole business conducted by each Subsidiary is and has been the ownership of
the Transferred Assets, the Excluded Assets, the Indirect Interests (to the extent
applicable) and the model homes, lots, and other assets previously sold and and except for
obligations incurred in the ordinary course of business consistent with past practice or
pursuant to the Transaction Documents, no Subsidiary has incurred any Liabilities other than
the Retained Liabilities and those Liabilities satisfied in full prior to the Closing.
Except for the Services contemplated to be performed pursuant to Section 4.2(d) of this
Agreement, the Interests, Indirect Interests and Transferred Assets shall, at Closing,
constitute all assets, properties and rights necessary to operate the Transferred Assets in
all material respects as currently operated.

          (iii) The Estimated NBV Schedule has been prepared in good faith and reflects the
aggregate net book value of the Transferred Assets as recorded on the books of ResCap as of
the Cut-Off Date, after giving effect to the exclusion of the Retained Liabilities.

          (iv) 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 Affiliates in respect of any of the
Interests, Indirect Interests or Transferred Assets shall have been fully paid by

-10-

 

ResCap or the applicable Affiliate, other than obligations incurred in the ordinary
course of business consistent with past practice pursuant to brokerage or commission
agreements to pay broker fees or commissions resulting from the sale of any assets prior to
Closing the proceeds from which sales are delivered to NewCo at Closing pursuant to Section
4.2(f). Without limiting the generality of the previous sentence, (i) no deficiency for any
Taxes has been asserted or assessed with respect to any of the Interests, Indirect Interests
or Transferred Assets that has not been satisfied by payment, settled or withdrawn, (b)
there is no audit, claim or controversy currently asserted or threatened in writing with
respect to the any of the Interests, Indirect Interests or Transferred Assets in respect of
any Taxes and (c) there are no Encumbrances or security interests on any of the Interests,
Indirect Interests or Transferred Assets that arose in connection with any failure to pay
any Taxes.

          (v) Set forth on Exhibit C is a list, as of the Cut-Off Date, of the Excluded
Assets prepared in good faith by ResCap. The assets set forth on this list are referred to
as the “Specified Excluded Assets”.

          (f) [Intentionally Omitted].

          (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 transfer of the Interests (or the transfer of control of any of the Indirect
Interests or Transferred Assets as a result thereof) pursuant to this Agreement based upon
arrangements made by or on behalf of ResCap or any of its Affiliates with respect to which NewCo
has any obligation or liability.

          (h) No Other Representations or Warranties. Except for the representations and
warranties contained in this Section 3.1, neither ResCap nor any of its Affiliates or other Persons
makes any express or implied representation or warranty on behalf of ResCap, Seller, the Interest,
the Indirect Interests or the Transferred Assets.

     Section 3.2 Representations and Warranties of NewCo. NewCo represents and warrants to
ResCap as of the date hereof and as of the Closing Date that:

          (a) Due Organization. NewCo 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 each of the Ancillary Transfer Documents 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 NewCo. This Agreement has
been duly executed and delivered by NewCo. This Agreement, assuming the due authorization,
execution and delivery by ResCap and Seller, constitutes a legally binding obligation of NewCo,
enforceable against NewCo in accordance with its terms, subject to bankruptcy, insolvency,
receivership, moratorium, reorganization or similar laws affecting the

-11-

 

rights of creditors generally. As of the Closing Date, (i) the execution and delivery of each
Ancillary Transfer Document, the performance of its obligations thereunder and the consummation of
the transactions contemplated thereby shall have been duly authorized by all requisite limited
liability company action of NewCo, (ii) each Ancillary Transfer Document shall have been duly
executed and delivered by NewCo and (iii) each Ancillary Transfer Document, assuming the due
authorization, execution and delivery by Seller, shall constitute a legally binding obligation of
NewCo, enforceable against NewCo in accordance with its respective 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 (i) any Governmental Entity or self-regulatory
organization or (ii) any other Person, by NewCo, Cerberus Partners, L.P. or Cerberus Capital
Management, L.P. in connection with the execution, delivery and performance of any Transaction
Document.

          (d) Non-Contravention The execution, delivery and performance by NewCo, Cerberus
Partners, L.P. and Cerberus Capital Management, L.P. of each Transaction Documents to which it is a
party, and the consummation of the transactions contemplated under each such Transaction Document,
do not and will not (i) violate any provision of the organizational documents of any such Person,
(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 such Person under, or result in a
loss of any material benefit to which such Person is entitled under, any material Contract, or
result in the creation of any Encumbrance upon any of assets of such Person, or (iii) violate or
result in a breach of or constitute a default under any Law to which such Person 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 the Interests (or the transfer of control of any of the Indirect
Interests or Transferred Assets as a result thereof) pursuant to this Agreement based upon
arrangements made by or on behalf of NewCo with respect to which ResCap or Seller has any
obligation or liability.

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

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

-12-

 

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 and the Transaction Documents.

     Section 4.2 The Separation.

          (a) The Parties acknowledge and agree that, notwithstanding anything to the contrary in this
Agreement, Seller shall retain all right, title and interest (legal or beneficial) to (including
tax ownership in respect of) the Excluded Assets and Retained Liabilities from and after the
Closing. In furtherance of the previous sentence, (i) ResCap and its controlled Affiliates shall
use their respective commercially reasonable efforts to cause the Specified Excluded Assets to be
transferred from the Subsidiaries to Seller or one or more controlled Affiliates of ResCap (other
than any Subsidiary) as promptly as practicable after the Closing, (ii) 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 to effect such retention of the Excluded Assets by Seller and (iii) to the extent any
Excluded Assets are held by any Subsidiary after the Closing, then NewCo shall cause such
Subsidiary to transfer such Excluded Assets to Seller or, at ResCap’s direction, one or more
controlled Affiliates of ResCap (other than any Subsidiary). ResCap shall bear all reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of outside counsel)
incurred by NewCo or any Subsidiary in connection therewith. From and after the Closing, ResCap
shall indemnify and defend NewCo, its Affiliates (including the Subsidiaries), managing member,
officers, directors, employees, agents, successors and assigns (each a “NewCo 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 the Excluded Assets or the Retained
Liabilities. Notwithstanding anything to the contrary in this Agreement, the Parties agree that,
in addition to the indemnification provided to the NewCo Indemnified Parties hereunder, but without
duplication of recovery, the Company shall have the rights specified in Section 4.2(a) of the
ResCap Disclosure Letter. If at any time after the Closing, NewCo or any Subsidiary receives
proceeds or other payments with respect to any of the Excluded Assets, NewCo shall, or shall cause
the applicable Subsidiary to, (i) accept and hold such proceeds or payments in trust for the
account and sole benefit of Seller 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 except as required by applicable Law) promptly (but in any
event no later than three Business Days after the date on which such Person receives such proceeds
or payment) to Seller, when necessary or appropriate, with NewCo’s or a Subsidiary’s endorsement,
as applicable, (without recourse, representation or warranty).

          (b) Prior to the Closing, ResCap and each of the Subsidiaries shall effect, or cause to be
effected (i) the transfer of the employment services of the Excluded Employees from each applicable
Subsidiary to ResCap or a controlled Affiliate of ResCap (other than the Subsidiaries) and (ii) the
assumption by ResCap of the Retained Liabilities arising out of the

-13-

 

Excluded Employees (the “Employee Separation”). The Employee Separation will be
deemed effective for legal, accounting and other computational purposes as of 11:59 p.m. (New York
City Time) on the Business Day immediately preceding the Closing Date. From and after the effective
time of the Employee Separation, none of the Subsidiaries shall have any responsibility for, and
ResCap shall indemnify and defend each of the NewCo Indemnified Parties from and against, any
Losses related to all current or former employees (including the Excluded Employees), and, to the
extent a Retained Liability, contractors or consultants of a Subsidiary.

          (c) Within 30 days after the Closing, ResCap shall deliver to NewCo true, correct and complete
list, as of the Closing Date, of (i) the Excluded Assets and (ii) Retained Liabilities, together
with an officer’s certificate to the effect that such lists have been prepared in accordance with
this Section 4.2(c).

          (d) From and after the Closing, ResCap shall, or shall cause one of its controlled Affiliates
(other than any Subsidiary) to, provide NewCo and the Subsidiaries with the services identified on
the Servicing Agreement Term Sheet until the expiration of the applicable term set forth thereon,
upon the terms and subject to the conditions therein. NewCo shall, or shall cause one of its
Subsidiaries to, timely pay all costs required to be paid thereunder for such services. The terms
and conditions set forth in the Servicing Agreement Term Sheet shall be deemed to be operative
covenants under this Agreement. As promptly as practicable after the Closing, the Parties shall
negotiate in good faith and enter into a definitive servicing agreement in form and substance to be
mutually agreed upon and consistent with the Servicing Agreement Term Sheet.

          (e) Prior to Closing, ResCap shall, or shall cause one of its controlled Affiliates to,
contribute to the capital of the Direct Subsidiary the outstanding promissory note issued by the
Direct Subsidiary to Residential Funding Company, LLC in the amount of approximately $800,000.

          (f) To the extent that, during the period from the Cut-Off Date to the Closing, there has
been any, direct or indirect, sale, transfer, conveyance of other disposition of any assets of a
Subsidiary that would have constituted Transferred Assets had such assets been owned by such
Subsidiary as of the Closing Date, then, (i) prior to the Closing, ResCap shall promptly notify
NewCo of such action or proposed action and (ii) NewCo shall have the right to receive at Closing
from ResCap the proceeds from the sale of such asset.

          (g) From and after the Closing, NewCo 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 arising out of the ownership of the
Interests, Indirect Interests or any of the Transferred Assets after the Closing, except to the
extent such Losses arise out of the Excluded Assets or constitute Retained Liabilities.

     Section 4.3 Further Assurances. From time to time after the Closing Date, 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

-14-

 

benefits of the transactions contemplated hereby. Without limiting the generality of the
foregoing, to the extent that NewCo discovers following Closing that any asset that was intended to
be transferred pursuant this Agreement was not transferred at Closing, ResCap shall or shall cause
its Affiliates promptly to assign and transfer to NewCo all right, title and interest in such
asset. As soon as practicable after Closing (but in any event by no later than 30 days
thereafter), ResCap shall deliver to NewCo a schedule (i) identifying the Transferred Assets owned
by each Subsidiary as of the Closing Date and (ii) such other information concerning the
Transferred Assets as reasonably requested by NewCo.

     Section 4.4 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, Indirect Interests or Transferred Assets attributable to periods (or
portions thereof) ending on or before the Closing Date. NewCo shall be liable for and shall pay
all Taxes applicable to the Interests, Indirect Interests or Transferred Assets attributable to
periods (or portions thereof) beginning on the day after the Closing Date.

          (b) Seller or NewCo, 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 NewCo 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 NewCo shall, as reasonably requested by the other, (i)
assist the other party in preparing any Tax Returns relating to the Interests, Indirect Interests
or Transferred 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, Indirect Interests or Transferred 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, Indirect Interests or Transferred Assets; (iv) provide
timely notice to the other party in writing of any pending or threatened Tax audits or assessments
relating to the Interests, Indirect Interests or Transferred 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, Indirect Interests or Transferred Assets for any period ending
at or prior to the Closing, and without charge to NewCo, retain all original books, records and
other documents and all electronically archived data not deliverable to NewCo at Closing related to
the Interests, Indirect Interests or Transferred Assets. Any information obtained pursuant to this
Section 4.4 or pursuant to any other Section hereof providing for the sharing of information or

-15-

 

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) Notwithstanding anything in this Section 4.4 or otherwise in this Agreement to the
contrary, Seller shall pay, on a timely basis, all applicable transfer, sales, use, recording,
registration and other similar Taxes (collectively, the “Transfer Taxes”) arising out of
(i) the sale of the Interests to NewCo or (ii) the transfer of the Excluded Assets from any
Subsidiary to ResCap or any of its controlled Affiliates. Seller shall prepare and file, and NewCo
shall cooperate in the preparation and filing of, all Tax Returns regarding any Transfer Taxes that
become payable in connection with the transactions contemplated by this Agreement.

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 NewCo
contained in this Agreement shall be true and correct 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. NewCo shall have performed in all material respects all of its
obligations hereunder required to be performed by NewCo at or prior to the Closing Date.

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

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

-16-

 

          (a) Representations and Warranties. The representations and warranties of ResCap
contained in this Agreement shall be true 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) and 3.1(e)(i) through (iv) shall be true and correct in all respects.

          (b) Covenants. ResCap shall have, and shall have caused each of its 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.

          (c) Consents and Approvals. All material consents, approvals and authorizations
required to be obtained by ResCap or any of its Affiliates to consummate the sale of the Interests
to NewCo (and thereby the transfer of the control of the Indirect Interests and Transferred Assets)
pursuant to this Agreement shall have been obtained or made (without the imposition of any
limitations, restrictions or conditions applicable to NewCo, the Interests, Indirect Interests, the
Transferred Assets, the Investor or any of the Investor’s Affiliates).

          (d) Exchange Offer. ResCap and its Affiliates shall have consummated the offers to
exchange and offers to purchase for cash made by ResCap pursuant to the confidential offering
memorandum and consent solicitation statement dated as of May 5, 2008 (the “OM”), including
the issuance of the “new notes” (as defined in the OM), on the terms and conditions set forth in
the OM.

          (e) Certificate. ResCap shall have delivered to NewCo 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 (d) and (f) have been satisfied.

          (f) Employee Separation. ResCap and its controlled Affiliates shall have consummated
the Employee Separation.

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 NewCo;

          (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 June 9, 2008; 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.

-17-

 

     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 Article VII, which
shall remain in full force and effect) shall forthwith become wholly void and of no further force
and effect.

ARTICLE VII

MISCELLANEOUS

     Section 7.1 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 ResCap:

	 	GMAC Model Home Finance I, LLC

c/o Residential Funding Company, LLC

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

-18-

 

	 	 	 
	If to NewCo:

	 	CMH Holdings LLC

c/o Cerberus Capital Management, L.P.

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 NewCo as set forth
above.

     Section 7.2 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 NewCo, 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 7.3 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, NewCo and the Subsidiaries 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 NewCo
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 7.4 Entire Agreement. This Agreement (including the Exhibits and the ResCap
Disclosure Letter hereto) 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; provided,
however, that the commitment letter entered into on June 2, 2008 (the “Commitment
Letter”) between ResCap and the Investors (as defined in the Commitment Letter) shall remain
in full force and effect until the Closing when it shall automatically terminate and become null
and void; provided, further, the obligation of ResCap to reimburse the Investors
for all reasonable fees and expenses incurred by or on behalf of such Investors or any of their
Affiliates

-19-

 

in connection with the negotiation, preparation, execution and delivery of the Commitment
Letter, this Agreement, the Purchase Agreement and the other Transaction Documents (other than the
fees and expenses of Schulte Roth & Zabel LLP incurred by such Investors in connection therewith,
which shall be borne by such Investors) shall remain in full force and effect.

     Section 7.5 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 7.6 Expenses. Except as otherwise specified in this Agreement, in the
Commitment Letter or in any other Transaction Document, 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 7.7 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 7.1 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 7.8 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 7.9 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 7.10 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

-20-

 

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 7.11 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) through 3.1(e)(i), 3.1(g), and 3.2(a) through 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 indefinitely.

     Section 7.12 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 7.13 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]

-21-

 

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

	 	 	 	 	 
	 	RESIDENTIAL CAPITAL, LLC

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	GMAC MODEL HOME FINANCE I, LLC

 	 
	 	By:  	/s/ Michael J. Franta
 	 
	 	 	Name:  	Michael J. Franta 	 
	 	 	Title:  	President 	 
	 
	 	CMH HOLDINGS LLC

 	 
	 	By:  	Cerberus Capital Management, L.P.,
 	 
	 	 	its Manager 	 
	 
	 	 	 
	 	By:  	/s/ Jeffrey Lomasky
 	 
	 	 	Name:
	Jeffrey Lomasky	 
	 	 	Title:  	Senior Managing Director	 
	 

-22-

 

EXHIBIT D

Servicing Agreement Term Sheet

Capitalized terms used but not defined herein shall have the respective meanings ascribed to them
in the Purchase Agreement, dated as of June 6, 2008, among Residential Capital, LLC
(“ResCap”), GMAC Model Home Finance I, LLC (“Seller”) and CMH Holdings LLC
(“NewCo”) (the “Purchase Agreement”). The terms and conditions set forth in this
Servicing Agreement Term Sheet (this “Term Sheet”) shall be deemed to be operative covenants under
the Purchase Agreement.

	 	 	 
	Parties:

	 	ResCap, on behalf of itself and its controlled Affiliates, and NewCo, on
behalf of itself and the Subsidiaries.
	 
	 	 
	Services:

	 	ResCap agrees to provide, or cause its controlled Affiliates to provide,
to NewCo and the Subsidiaries, the Services (as described below). ResCap
shall, or shall cause its controlled Affiliates to, provide the Services
with the same degree of care, skill, and diligence and in substantially
the same manner as such services are currently obtained by the
Subsidiaries (from the Excluded Employees, ResCap or its controlled
Affiliates or by virtue of third party services made available by ResCap
or its controlled Affiliates) as of the Closing Date. The Parties agree
that ResCap may use third parties to satisfy ResCap’s obligation to
provide any such Services so long as such third parties (or similar
third parties) currently provide such Services (directly or indirectly)
to the Subsidiaries as of the Closing Date. ResCap shall provide NewCo
advance written notice of any significant change in the manner in which
the Services are provided, including any change in the employees or
third parties providing such Services.

The Services shall include all services currently obtained by the
Subsidiaries (from the Excluded Employees, 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 NewCo, to conduct NewCo’s business (including the
ownership, operation, maintenance, sale and disposition of the
Transferred Assets as contemplated by the LLC Agreement), including,
without limitation:
	 
	 	 
	 

	 	    •   
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;

-23-

 

	 	 	 
	 

	 	    •   
Use of the Richmond, Virginia headquarters facility, and any
other location or facility providing services relating to the
Transferred Assets as of the Closing Date;

	 
	 

	 	    •   
Use of the names of the Subsidiaries (including GMAC) and any
derivatives thereof to the extent necessary or advisable to conduct
NewCo’s business; and

	 
	 

	 	    •    
Such other Services as may be necessary or incidental to the
operations of NewCo and the Subsidiaries in the ordinary course of
business relating to the Transferred Assets.

	 
	 	 
	Costs:

	 	In consideration for each Service, NewCo shall reimburse ResCap on a
dollar-for-dollar basis for the actual, reasonably documented
out-of-pocket costs (if any) incurred by ResCap and its controlled
Affiliates to provide such Service (each such out-of-pocket cost, taking
into account the subsequent proviso, the “Applicable Service Cost”),
provided that (i) no premium, corporate overhead allocation or other
internal costs shall be charged or applied, (ii) ResCap shall solely
bear all direct and indirect compensation (including fringe benefits of
any sort) for the employees of ResCap and any of its controlled
Affiliates (including the Excluded Employees) in respect of the
Services, and shall be responsible for workers’ compensation insurance,
unemployment insurance, employment taxes, and all other employer
liabilities relating to such persons and such costs shall not be charged
or applied to NewCo, (iii) to the extent any third parties (including
advisors, contractors or other agents) are engaged by ResCap or any of
its controlled Affiliates to perform any Services that, in the ordinary
course of business, have been performed by employees of ResCap or any of
its controlled Affiliates for the benefit of the Subsidiaries, then,
with respect to such service providers, ResCap shall solely bear all
out-of-pocket costs incurred in respect of the use of such third parties
to satisfy any such Services and such costs shall not be charged or
applied to NewCo, and (iv) ResCap shall, at its sole expense (and
without subsequent charge to NewCo), obtain all consents, approvals,
licenses and authorizations, necessary or advisable for ResCap and its
controlled Affiliates to provide such Service. Notwithstanding the
foregoing, in no event shall the Applicable Service Cost for any Service
for any month be greater than the average monthly actual cost incurred
by the Subsidiaries for such Service during the five-month period ended
May 31, 2008.
	 
	 	 
	 

	 	During the applicable term of each Service, ResCap shall invoice NewCo
for the Applicable Service Cost promptly after the end of each calendar
month during such term. ResCap 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 NewCo (or the
Subsidiaries) to ResCap by wire transfer of immediately available funds

-24-

 

	 	 	 
	 

	 	not later than sixty (60) calendar days after receipt by NewCo of
ResCap’s invoice, in accordance with the wiring instructions provided by
ResCap to NewCo.
	 
	 	 
	Term:

	 	Each Service shall be provided until the earlier to occur of (i) the
date on which NewCo notifies ResCap in writing to terminate such
Service, provided that NewCo provides ResCap with at least 30 days’
prior written notice of such termination, and (ii) the dissolution of
NewCo.
	 
	 	 
	Indemnification:

	 	ResCap shall indemnify, defend and hold harmless NewCo and its
Affiliates 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 the Servicing
Agreement, or (ii) any claim that any of the Services violates or
infringes on any intellectual property rights of any third party.
	 
	 	 
	 

	 	NewCo shall indemnify, defend and hold harmless ResCap and its
controlled Affiliates 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 the
Servicing 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 the
Servicing Agreement, or (ii) any claim that any of the Services violates
or infringes on any intellectual property rights of any third party.
	 
	 	 
	 

	 	Neither ResCap nor NewCo shall be required to indemnify the other or the
other’s Affiliates for exemplary, punitive, treble, special, indirect,
consequential, remote or speculative damages, lost profits or internal
costs, provided, 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 the
indemnity above, then the indemnifying party shall be liable for and
obligated to reimburse the indemnified party for such damages.
	 
	 	 
	Relationship of the
Parties:

	 	ResCap and its controlled Affiliates, in the performance of the
Services, shall be acting as independent contractors to NewCo and the
Subsidiaries, and not as partners, joint venturers or agents of NewCo.
Neither ResCap nor NewCo intend to create by the Servicing Agreement an
employer-employee relationship. Each of ResCap and its controlled
Affiliates, on the one hand, and NewCo and the Subsidiaries, on the
other hand, shall retain control over their respective personnel, and
their respective employees shall not be considered employees of the
other. Neither ResCap nor any of its controlled Affiliates, on the one
hand, nor NewCo or any of the Subsidiaries, on the other hand, shall
have any right, power or authority to create any obligation, express or
implied, on

-25-

 

	 	 	 
	 

	 	behalf of the other pursuant to this Term Sheet.
	 
	 	 
	Records and
Inspection:

	 	During the term of the Servicing Agreement, ResCap shall maintain
complete and accurate records of the Services provided, costs invoiced
to NewCo, payments made thereunder and all costs incurred that are
intended to constitute “Class B Junior Preferred Member Reimbursable
Costs” under the LLC Agreement. All such records shall be available for
inspection by NewCo or its representative. Upon any termination or
expiration of any Service or of the Servicing Agreement, ResCap shall
cooperate, and cause its controlled Affiliates to cooperate, with all
reasonable requests by NewCo in connection with the transition of the
Services, including the transfer and retention of records and data
pertaining to the Services or the Subsidiaries to NewCo or its designees
(in a mutually agreed industry standard electronic format).
	 
	 	 
	Cooperation:

	 	ResCap shall, and shall cause its controlled Affiliates, employees,
agents, representatives and subcontractors to, cooperate fully with
NewCo, the Subsidiaries and their respective employees, agents and
representatives to facilitate, in all respects, the provision of
Services to NewCo and the Subsidiaries. NewCo shall, and shall cause
the Subsidiaries and their 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 NewCo and the
Subsidiaries.
	 
	 	 
	Steering Committee:

	 	On the Closing Date, ResCap and NewCo 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 NewCo. The initial member of the Steering Committee nominated by
ResCap shall be a person to be identified by ResCap prior to the Closing
(the “ResCap Nominee”), and the initial member of the Steering Committee
nominated by NewCo shall be a person to be identified by NewCo prior to
the Closing (the “NewCo Nominee”, and collectively with the ResCap
Nominee, the “Steering Committee Members”). To the fullest extent
practicable, ResCap shall keep the Steering Committee reasonably
informed on all proposed changes to the provision of Services and
consult with the Steering Committee prior to taking any action that
would reasonably be expected to adversely affect, in any material
respect, the provision of Services hereunder.
	 
	 	 
	Disputes:

	 	In the event that NewCo has a good faith dispute with regard to any
costs invoiced by ResCap, NewCo 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 is due, and NewCo may withhold
payment of any disputed amounts pending resolution of the dispute.
NewCo’s failure to pay amounts disputed in accordance with the

-26-

 

	 	 	 
	 

	 	preceding
sentence shall not be grounds for a claim of breach or suspension of the
provision of Services by ResCap or its controlled Affiliates.
	 
	 	 
	 

	 	Any controversy or dispute arising out of the Servicing Agreement (each,
a “Dispute”) shall be submitted to the Steering Committee.
	 
	 	 
	 

	 	If the Steering Committee fails to reach unanimous agreement on the
resolution of such Dispute within 20 Business Days, then either ResCap
or NewCo may seek remedies under New York law, and in connection
therewith, such Dispute shall be brought in the United States District
Court for the Southern District of New York or any New York State court
sitting in New York City (the “Chosen Courts”), and solely in connection
with such claims arising under the Servicing 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 7.1 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 the Servicing Agreement.
	 
	 	 
	Confidential 

Information:

	 	The Servicing Agreement shall include a customary covenant regarding the
confidential use and non-disclosure of non-public information concerning
NewCo or any of its Affiliates or the Transferred Assets.

-27-exv4w1

Exhibit 4.1

EXECUTION VERSION

SECOND SUPPLEMENTAL SUBORDINATED INDENTURE

dated as of May 16, 2008

among

RESIDENTIAL CAPITAL, LLC,

THE GUARANTORS PARTY HERETO

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Trustee

 

 

RESIDENTIAL CAPITAL, LLC

SECOND SUPPLEMENTAL INDENTURE

          THIS SECOND SUPPLEMENTAL SUBORDINATED INDENTURE, dated as of May 16, 2008 (this “Supplemental
Subordinated Indenture”), is by and among RESIDENTIAL CAPITAL, LLC, a Delaware limited liability
company (the “Company”), the guarantors a party hereto (the “Guarantors”) and DEUTSCHE BANK TRUST
COMPANY AMERICAS, a banking corporation duly incorporated and existing under the laws of the State
of New York, as trustee (the “Trustee”).

RECITALS

          WHEREAS, the Company, the Guarantors and the Trustee entered into the Subordinated Indenture,
dated as of April 17, 2006, as supplemented by that certain First Supplemental Subordinated
Indenture, dated as of April 17, 2006, providing for the issuance of Floating Rate Subordinated
Notes due 2009 (as supplemented, the “Subordinated Indenture”);

          WHEREAS, Section 10.02 of the Subordinated Indenture provides that the Subordinated Indenture
may be amended with the consent of the Holders of not less than a majority in the aggregate
principal amount of the Securities then outstanding, voting together as a single class (subject to
certain exceptions);

          WHEREAS, the Company has commenced offers to exchange relating to any and all outstanding
Securities and a consent solicitation with respect to the amendments to the Subordinated Indenture
set forth herein (collectively, the “exchange offers and consent solicitation”), each pursuant to a
Confidential Offering Memorandum and Consent Solicitation Statement, dated as of May 5, 2008;

          WHEREAS, the Company and the Guarantors desire and have requested the Trustee to join with
them in entering into this Supplemental Subordinated Indenture for the purpose of amending the
Subordinated Indenture in certain respects as permitted by Section 10.02 of the Subordinated
Indenture;

          WHEREAS, the execution and delivery of this Supplemental Subordinated Indenture has been
authorized by the Board of Directors of the Company and of each Guarantor; and

          WHEREAS, (1) the Company has received the consent of Holders of a majority in the aggregate
principal amount of the outstanding Securities, voting together as a single class, and has
satisfied all other conditions precedent, if any, provided under the Subordinated Indenture to
enable the Company, the Guarantors and the Trustee to enter into this Supplemental Subordinated
Indenture, all as certified by an Officers’ Certificate and a Resolution of the Board of Directors
of the Company, delivered to the Trustee simultaneously with the execution and delivery of this
Supplemental Subordinated Indenture as contemplated by Sections 7.02, 10.02 and 16.04 of the
Subordinated Indenture, and (2) the Company has delivered to the Trustee simultaneously with the
execution and delivery of this Supplemental Subordinated Indenture an Opinion of Counsel relating
to this Supplemental Subordinated Indenture as contemplated by Sections 7.02, 10.03 and 16.04 of
the Subordinated Indenture.

1

 

          NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the
benefit of the others and for the equal and ratable benefit of the Holders of all Securities, as
follows:

ARTICLE I

DEFINITIONS

          Section 1.1 Deletion of Definitions. Section 1.01 of the Subordinated Indenture is
hereby amended to delete in their entirety all terms and their respective definitions for which all
references are eliminated in the Subordinated Indenture as a result of the amendments set forth in
Article II of this Supplemental Subordinated Indenture.

ARTICLE II

AMENDMENTS

          Section 2.1 Amendments to the Subordinated Indenture.

          (a) The Subordinated Indenture is hereby amended by deleting Section 4.07 of the Subordinated
Indenture and all references thereto in the Subordinated Indenture in their entirety;

          (b) The Subordinated Indenture is hereby amended by deleting Article Fifteen of the
Subordinated Indenture and all references thereto in the Subordinated Indenture in their entirety,
and by renumbering the subsequent Articles accordingly; and

          (d) The Subordinated Indenture is hereby amended by deleting clauses (c), (d), (e), (f) and
(g) of Section 6.01 of the Subordinated Indenture and all references thereto in the Subordinated
Indenture in their entirety.

ARTICLE III

MISCELLANEOUS

          Section 3.1 Subordinated Indenture. Except as amended hereby, the Subordinated
Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Subordinated Indenture shall form
a part of the Subordinated Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered under the Subordinated Indenture shall be bound by the
Subordinated Indenture as amended hereby. In the case of conflict between the Subordinated
Indenture and this Supplemental Subordinated Indenture, the provisions of this Supplemental
Subordinated Indenture shall control.

          Section 3.2 Severability. In case any provision in this Supplemental Subordinated
Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

          Section 3.3 Capitalized Terms. Capitalized terms used herein by not defined shall
have the meanings assigned to them in the Subordinated Indenture.

          Section 3.4 Effect of Headings. The Article and Section headings used herein are for
convenience only and shall not affect the construction of this Supplemental Subordinated Indenture.

2

 

          Section 3.5 Trustee Makes No Representations. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Subordinated Indenture.

          Section 3.6 Certain Duties and Responsibilities of the Trustee. In entering into this
Supplemental Subordinated Indenture, the Trustee shall be entitled to the benefit of every
provision of the Subordinated Indenture relating to the rights, limitations of rights, obligations,
duties and immunities of the Trustee, whether or not elsewhere herein so provided.

          Section 3.7 Governing Law. THIS SUPPLEMENTAL SUBORDINATED INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE. ANY CLAIMS OR
PROCEEDINGS IN RESPECT OF THIS SUPPLEMENTAL SUBORDINATED INDENTURE SHALL BE HEARD IN A FEDERAL OR
STATE COURT LOCATED IN THE STATE OF NEW YORK.

          Section 3.8 Counterparts. The parties may sign any number of copies of this
Supplemental Subordinated Indenture. Each signed copy shall be an original, but all of them
together represent one and the same agreement.

          Section 3.9 Successors. All agreements of the Company, the Guarantors and the Trustee
in this Supplemental Subordinated Indenture and the Securities shall bind their respective
successors.

          Section 3.10 Effectiveness. The provisions of Articles I and II of this Supplemental
Subordinated Indenture shall be effective as of the date first above written and shall become
operative on the date on which the Company accepts not less than a majority in the aggregate
principal amount of the Securities then outstanding pursuant to the exchange offers and consent
solicitation and provides written notice to the Trustee of such acceptance.

          Section 3.11 Endorsement and Change of Form of Securities. Any Securities
authenticated and delivered after the close of business on the date that this Supplemental
Subordinated Indenture becomes effective may be affixed to, stamped, or imprinted or otherwise
legended by the Trustee, with a notation as follows:

     “Effective as of May 16, 2008, the restrictive covenants of the Subordinated Indenture,
the Guarantees and certain of the Events of Default have been eliminated, as provided in the
Second Supplemental Subordinated Indenture, dated as of May 16, 2008. Reference is hereby
made to said Second Supplemental Subordinated Indenture, copies of which are on file with
the Trustee, for a description of the amendments made therein.”

[Remainder of Page Intentionally Blank]

3

 

          IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Subordinated
Indenture to be duly executed as of the day and year written above.

	 	 	 	 	 
	 	RESIDENTIAL CAPITAL, LLC

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 
	 	GMAC MORTGAGE, LLC,

as Guarantor

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 
	 	GMAC RESIDENTIAL HOLDING 

COMPANY, LLC, as Guarantor

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 
	 	GMAC-RFC HOLDING COMPANY, LLC,

as Guarantor

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 
	 	HOMECOMINGS FINANCIAL, LLC,

as Guarantor

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 

[Signature
Page to Second Supplemental Subordinated Indenture]

 

 

	 	 	 	 	 
	 	RESIDENTIAL FUNDING COMPANY, LLC,

as Guarantor

 	 
	 	By:  	/s/ James N. Young
 	 
	 	 	Name:  	James N. Young 	 
	 	 	Title:  	CFO 	 
	 

[Signature
Page to Second Supplemental Subordinated Indenture]

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY

AMERICAS, as Trustee

 	 
	 	By:  	/s/ Kenneth R. Ring
 	 
	 	 	Name:  	Kenneth R. Ring 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	     /s/ Rodney Gaughan
 	 
	 	 	Name:  	Rodney Gaughan 	 
	 	 	Title:  	Vice President 	 
	 

[Signature
Page to Second Supplemental Subordinated Indenture]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]