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Participation Agreement Dated June 4, 208

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EXECUTION COPY


PARTICIPATION AGREEMENT


dated as of June 4, 2008


between


GMAC LLC, a Delaware limited liability company,


as Seller,


General Motors Corporation, a Delaware corporation,


as a Participant


and


Cerberus ResCap Financing LLC, a Delaware limited liability company,


as a Participant


TABLE OF CONTENTS


Page


5206697 08048307
Section 1. Definitions................................................1


Section 2. Sale of Participation......................................5


Section 3. Unconditional Obligation...................................6


Section 4. Additional Payments........................................6


Section 5. Maximum Participant Commitment.............................6


Section 6. Representations and Warranties.............................7


Section 7. Payments to Participant....................................7


Section 8. Subordination of Participations............................8


Section 9. Administration.............................................9


Section 10. Non-Recourse; Independent Investigation...................10


Section 11. Expenses; Indemnity.......................................11


Section 12. Taxes.....................................................12


Section 13. Reimbursement.............................................12


Section 14. Set-off...................................................12


Section 15. Nature of Interest........................................13


Section 16. Miscellaneous.............................................13


PARTICIPATION AGREEMENT


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


RECITALS


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


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


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


Section 1. Definitions.


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


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


"Agreement" has the meaning given to it in the Preamble.


"Borrower" has the meaning given to it in the Recitals.


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


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


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


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


"General Motors" has the meaning given to it in the Preamble.


"GMAC Mortgage" has the meaning given to it in the Recitals.


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


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


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


"Lender" means a "Lender" as defined in the Loan Agreement.


"Loan Agreement" has the meaning given to it in the Recitals.


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


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


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


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


"Participant" has the meaning given to it in the Preamble.


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


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


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


"Participation" has the meaning given to it in Section 2.


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


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


"Person" means any individual, corporation, estate, partnership, limited


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


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


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


"RFC" has the meaning given to it in the Recitals.


"Seller" has the meaning given to it in the Preamble.


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


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


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


"Senior Interests" shall mean (a) the Seller's Percentage Interest of the Outstanding Aggregate Loan Amount, (b) the Seller's Interest Payment, and (c) any fees or other amounts due and payable now or in the future by the Borrowers to the Seller pursuant to the Facility Documents (other than the portion of the Upfront Fee payable to the Participants pursuant to Section 2(b)), together with all costs and out-of-pocket expenses reasonably incurred by or on behalf of the Seller in connection with the Facility Documents and the transactions contemplated thereby which have not been paid or reimbursed by the Borrowers.


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


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


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


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


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


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


Section 3. Unconditional Obligation.


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


Section 4. Additional Payments.


(a) The Seller shall notify each Participant promptly of its receipt of a notice from the Borrowers requesting a Loan, specifying therein the amount and the date of such Loan and, on and after the Initial Funding Date, the Initial Price or Additional Price, as the case may be, required to be paid by such Participant to purchase its Participation in such Loan. If, after giving effect to a Future Loan, the Outstanding Aggregate Loan Amount will exceed $2,750,000,000, then, not later than 10:00 a.m. (New York City time) on the date
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