AMENDED AND RESTATED FORBEARANCE
AGREEMENT
THIS AMENDED AND
RESTATED FORBEARANCE AGREEMENT, dated as of August 11, 2008
(this “ Agreement ”), is entered into among
DWFC, LLC and Deerfield TRS (Bahamas) Ltd. (together, the “
Borrowers ” and each a “ Borrower
”), Deerfield Capital LLC, as Originator (the “
Originator ”) and as Servicer (the “
Servicer ”), each of the Conduit Purchasers, the
Institutional Purchasers (collectively, and together with the
Swingline Purchaser (as defined below), the “ Lenders
”) and the Purchaser Agents from time to time party to the
Sale and Servicing Agreement referenced below, Wachovia Bank,
National Association, as Swingline Purchaser (the “
Swingline Purchaser ”), and Wachovia Capital Markets,
LLC, as Administrative Agent (the “ Administrative
Agent ”). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Sale and
Servicing Agreement (as defined below).
WHEREAS, the
Borrowers, the Originator, the Servicer, the Lenders, the Purchaser
Agents, the Swingline Purchaser, the Administrative Agent, Lyon
Financial Services, Inc. (d/b/a/ U.S. Bank Portfolio Services), as
Backup Servicer (the “ Backup Servicer ”), U.S.
Bank National Association, as Collateral Custodian (the “
Collateral Custodian ”) and the Hedge Counterparty
have entered into that certain Sale and Servicing Agreement dated
as of March 10, 2006 (as amended prior to the date hereof, the
“ Sale and Servicing Agreement ”).
WHEREAS, as of the
required reporting date for the fiscal quarters ending as of
March 31, 2008 and June 30, 2008 (pursuant to
Section 6.10(d) of the Sale and Servicing Agreement),
Deerfield Capital LLC failed to maintain stockholder’s equity
of $240,000,000 plus 90% of the proceeds raised from equity
issuers, which constitutes a Servicer Default under
Section 6.15(j) of the Sale and Servicing Agreement (and,
accordingly, a Termination Event under Section 10.1(d) of the
Sale and Servicing Agreement (the “ Acknowledged
Termination Event ”).
WHEREAS, the
Borrowers, the Originator and the Servicer (collectively, the
“ Loan Parties ”) have requested, and the
Administrative Agent and the Lenders have, pursuant to a
Forbearance Agreement dated as of May 12, 2008 (the “
Original Agreement ”), agreed to a request by the Loan
Parties to (i) forbear from exercising certain rights and
remedies arising from the Acknowledged Termination Event,
(ii) forbear from exercising any right to terminate the rights
and obligations of the Servicer arising from the Acknowledged
Termination Event and (iii) waive application of the
Concentration Limits set forth in clause (a) of the definition
of “Concentration Limits” in each case, during the
Forbearance Period.
WHEREAS, Variable
Funding Capital Company LLC has assigned its interest in all
Advances made by it under the Sale and Servicing Agreement to
Wachovia Bank, National Association, as a Liquidity Bank, pursuant
to Section 13.16 of the Sale and Servicing
Agreement.
WHEREAS, the Loan
Parties, the Administrative Agent and the Lenders have agreed to
amend the Original Agreement pursuant to the terms set forth
herein.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Estoppel, Acknowledgement and Reaffirmation . The Loan
Parties hereby acknowledge their obligations under the respective
Transaction Documents to which they are party and reaffirm that
each of the liens and security interests created and granted in or
pursuant to the Transaction Documents is valid and subsisting and
that this Agreement shall in no manner impair or otherwise
adversely effect such liens and security interests.
2.
Forbearance . Subject to the terms and conditions set forth
herein, the Administrative Agent and the Lenders agree that they
shall, during the Forbearance Period (as defined below),
(i) forbear from exercising any and all rights or remedies
available to them under the Sale and Servicing Agreement, the other
Transaction Documents and Applicable Law as a result of the
Acknowledged Termination Event, but only to the extent such rights
or remedies arise exclusively as a result of the Acknowledged
Termination Event, (ii) waive the requirement to maintain
stockholder’s equity in the amount set forth in
Section 6.15(j) of the Sale and Servicing Agreement and
(iii) waive application of the Concentration Limits in
computing the Borrowing Base; provided that the
Administrative Agent and the Lenders shall be free to exercise any
or all of their rights and remedies arising on account of the
Acknowledged Termination Event and the limited waiver described in
clauses (ii) and (iii) above shall terminate and all
Concentration Limits shall be applied, at any time upon or after
the end of the Forbearance Period (as defined below).
3.
Forbearance Termination Events . Nothing set forth herein or
contemplated hereby is intended to constitute an agreement by the
Administrative Agent or the Lenders to forbear from exercising any
of the rights available to them under the Sale and Servicing
Agreement, the other Transaction Documents, or Applicable Law (all
of which rights and remedies are hereby expressly reserved by the
Administrative Agent and the Lenders) upon or after the occurrence
of the end of the Forbearance Period. As used herein, a “
Forbearance Termination Event ” shall mean the breach
of any of the obligations set forth in Section 4 hereof
or the occurrence of any Termination Event other than the
Acknowledged Termination Event. The “ Forbearance
Period ” shall be the period from, and including, the
date hereof to (but excluding) the earliest to occur of:
(a) if the ratio
(expressed as a percentage) of (i) the Advances Outstanding at
the close of business on each “Target Date” specified
in the table below to (ii) the sum of (A) the Borrowing Base
(after giving effect to the waiver of the application of the
Concentration Limits) calculated at the close of business on such
Target Date (including (x) 60% of the Outstanding Loan Balance as
of such Target Date due from Synventive Acquisition Inc. and
(y) until the Loan to Medical Media Partners returns to
compliance with its applicable Loan-to-Value Ratio, 0% of the
Outstanding Loan Balance as of such Target Date due from Medical
Media Partners) plus (B) Collections received but not
applied to the reduction of the Advances Outstanding as of the
close of business on such
2
Target Date
(the “ Leverage Ratio ”) is greater than the
corresponding “Target Percentage” specified in the
table below, such Target Date:
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Target Date
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Target Percentage
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August 15, 2008
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52%
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September 15, 2008
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50%
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October 31, 2008
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40%
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November 30, 2008
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25%
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December 31, 2008
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0%
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(b) the date on
which a Forbearance Termination Event occurs.
4.
Further Obligations . During the Forbearance
Period,
(a) the Servicer
shall use commercially reasonable efforts to provide to the
Administrative Agent, upon request, all information regarding each
Eligible Loan in the Collateral (including, without limitation, the
most recent credit analysis of each Obligor with respect to such
Eligible Loan);
(b) unless the
Administrative Agent shall otherwise consent in writing, such
consent not be unreasonably withheld, none of the Loan Parties
shall effect a sale, assignment, transfer or other conveyance of
any part of the Collateral (a “ Transfer ”) that
would, after giving effect to such Transfer, cause the ratio
(expressed as a percentage) of (i) Advances Outstanding to
(ii) the sum of (A) the Borrowing Base (including
(x) 60% of the Outstanding Loan Balance due from Synventive
Acquisition Inc. and (y) until the Loan to Medical Media
Partners returns to compliance with its applicable Loan-to-Value
Ratio, 0% of the Outstanding Loan Balance due from Medical Media
Partners), plus (B) Collections and the proceeds
of
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