Exhibit 10.59
FORBEARANCE AGREEMENT
This FORBEARANCE
AGREEMENT (the “ Agreement ”), dated as of
February 11, 2005, by and among Maxtor Receivables LLC, a
Delaware limited liability company (the “ Borrower
”), Maxtor Corporation, a Delaware corporation (“
Maxtor ”), as servicer (the “ Servicer
”) under the Loan Agreement (as defined below), and Merrill
Lynch Commercial Finance Corp., as Lender (the “
Lender ”) and Agent (the “ Agent ”)
under the Loan Agreement. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in
the Loan Agreement.
PRELIMINARY STATEMENTS
Reference
is hereby made to that certain Receivables Loan and Security
Agreement (the “ Loan Agreement ”) dated as of
June 24, 2004, by and among the Borrower, the Servicer, the
Lender, the Agent, U.S. Bank National Association and Lyon
Financial Services, Inc.
WHEREAS,
an Early Amortization Event has occurred under Section 7.01(m)
of the Loan Agreement, in that the rolling average of the
Dilution-to-Liquidation Ratios for the preceding three Cut-Off
Dates as reported in the Monthly Remittance Report delivered on
February 7, 2005, exceeded 17.50%, and such Early Amortization
Event (the “ Dilution Trigger Event ”) gives the
Agent the right (i) to declare the Amortization Commencement
Date to have occurred and (ii) to declare a Servicer Default
under clause (iv) of the definition thereof on account of such
Dilution Trigger Event and to terminate the rights and obligations
of the Servicer under the Loan Agreement.
WHEREAS,
the Borrower has requested that the Agent forbear from the exercise
of its rights to declare an Amortization Commencement Date pursuant
to Section 7.01 of the Loan Agreement or to terminate Maxtor
as Servicer, and the Agent is willing, upon the satisfaction of
certain conditions precedent and subject to the terms herein, to
forbear temporarily from the exercise of such rights.
NOW
THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Transaction Documents and this Agreement, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree
as follows:
I. Forbearance .
1.1
Subject to the terms and conditions set forth herein, the Agent
hereby agrees, during the period from the time this Agreement
becomes effective pursuant to Section 2 hereof until
9:00 a.m. New York time on March 7, 2005 (such period, as it
may be prematurely terminated at the option of the Agent pursuant
to the terms of this Agreement, the “ Forbearance
Period ”), to forbear temporarily from exercising its
rights, solely on account of the Dilution Trigger Event, to declare
an Amortization Commencement Date or to terminate Maxtor as
Servicer under the Loan Agreement. This agreement to forbear solely
on account of the Dilution
Trigger Event as provided herein
expires at the conclusion of the Forbearance Period and the Agent
may, at any time thereafter, exercise any of its rights and
remedies with respect to the Dilution Trigger Event to the same
extent as if this Agreement did not exist, including without
limitation, the right to declare the occurrence of the Amortization
Commencement Date, terminate Maxtor as Servicer, and exercise any
remedies set forth in the Transaction Documents which are
exercisable from and after the Amortization Commencement Date.
Notwithstanding the foregoing, the Agent agrees that that it shall
also forbear from exercising its rights, solely on account of the
Dilution Trigger Event, to declare an Amortization Commencement
Date or to terminate Maxtor as Servicer under the Loan Agreement
after the conclusion of the Forbearance Period if a Monthly
Remittance Report delivered on March 7, 2005 demonstrates that
the average of the Dilution-to-Liquidation Ratios for the three
Cut-Off Dates immediately preceding March 7, 2005 does not
exceed 17.50%.
1.2
The specific agreements to forbear described in
Section 1.1 above apply only to the Dilution Trigger
Event and not to any other facts or circumstances giving rise to an
Early Amortization Event or Servicer Default which may have
occurred or may hereafter occur, and nothing in this Agreement
shall be deemed to restrict any right or remedy the Agent may have
on account of any such other Early Amortization Event or Servicer
Default, including the right to declare the occurrence of the
Amortization Commencement Date at any time during the Forbearance
Period or thereafter on account of any such other Early
Amortization Event or to terminate the Servicer during the
Forbearance Period or thereafter on account of any such other
Servicer Default. The Agent is not hereby waiving the existence of
any Early Amortization Event or Servicer Default and is merely
agreeing to forbear as provided herein during the Forbearance
Period and/or thereafter as expressly set forth above in
Section 1.1 . Except for the forbearance expressly set
forth above in Section 1.1 , the Agent expressly
reserves each and every right and remedy it has under the
Transaction Documents and under applicable law, and nothing in this
Agreement shall be deemed to constitute a waiver of any Early
Amortization Event or Servicer Default whether now existing or
hereafter arising, or, constitute a waiver of, or, except for the
forbearance expressly set forth above in Section 1.1 ,
forbearance of, any right or remedy the Agent may have under any of
the Transaction Documents or applicable law.
1.3
Each of the Borrower and the Servicer expressly acknowledge and
agree that the agreement of the Agent under Section 1.1
to forbear as provided herein is expressly conditioned on
compliance by each of the Borrower and the Servicer with the
covenants, agreements, terms and conditions contained herein and
that if the Borrower or the Servicer fa
